CONSOLIDATED BALANCE SHEETS


(Dollars in thousands, except share amounts and par value per share)	September 30, 2020		December 31, 2019
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value (amortized cost: 2020, $8,267,172; 2019, $7,334,425 allowances for credit losses: 2020, $17,636; 2019, $0)	$	8,576,687	$	7,492,079
Fixed maturities - available for sale, at fair value		3,748		5,826
Equity securities, at fair value		1,010,264		764,049
Short-term investments (cost: 2020, $908,334; 2019, $279,824)		907,889		279,879
Other invested assets (cost: 2020, $1,069,726; 2019, $1,020,766)		1,069,726		1,020,766
Other invested assets, at fair value		1,801,743		1,982,582
Cash		451,512		411,122
Total investments and cash		13,821,569		11,956,303
Note Receivable - affiliated		300,000		300,000
Accrued investment income		76,463		54,383
Premiums receivable		1,517,550		1,337,344
Reinsurance receivables - unaffiliated		1,451,992		1,318,820
Reinsurance receivables - affiliated		2,704,519		3,125,269
Income taxes net recoverable		-		65,793
Funds held by reinsureds		264,597		228,297
Deferred acquisition costs		380,863		388,238
Prepaid reinsurance premiums		395,776		413,612
Other assets		572,171		518,127
TOTAL ASSETS	$	21,485,500		19,706,186

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	11,042,011	$	10,209,519
Unearned premium reserve		2,399,154		2,198,932
Funds held under reinsurance treaties		46,803		41,233
Other net payable to reinsurers		343,165		267,367
Losses in course of payment		186,466		70,541
Income taxes net payable		131,824		-
Senior notes due 6/1/2044		397,164		397,074
Long term notes due 5/1/2067		223,649		236,758
Borrowings from FHLB		90,000		-
Accrued interest on debt and borrowings		7,215		2,878
Unsettled securities payable		98,898		25,230
Other liabilities		363,485		399,229
Total liabilities		15,329,834		13,848,761

Commitments and Contingencies (Note 6)		(nil)		(nil)

STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized; 1,000 shares issued and outstanding (2020 and 2019)		-		-
Additional paid-in capital		1,100,983		1,100,678
Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $51,941 at 2020 and $16,977 at 2019		195,495		64,324
Retained earnings		4,859,188		4,692,423
Total stockholder's equity		6,155,666		5,857,425
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	21,485,500	$	19,706,186

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

September 30, December 31,
(Dollars in thousands, except par value per share) 2017 2016
(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value $ 6,039,361 $ 5,970,496
     (amortized cost: 2017, $5,974,256; 2016, $5,910,494)
Equity securities - available for sale, at fair value 998,071 887,800
Short-term investments 229,999 306,286
Other invested assets (cost: 2017, $736,566; 2016, $613,680) 739,486 613,740
Other invested assets, at fair value 1,922,402 1,766,626
Cash 302,331 297,794
         Total investments and cash 10,231,650 9,842,742
Note receivable - affiliated 250,000 250,000
Accrued investment income 45,575 45,323
Premiums receivable 1,564,491 1,128,639
Reinsurance receivables - unaffiliated 1,116,370 887,657
Reinsurance receivables - affiliated 4,137,998 3,686,130
Funds held by reinsureds 204,989 190,421
Deferred acquisition costs 65,519 68,621
Prepaid reinsurance premiums 1,115,344 781,384
Other assets 411,425 202,519
TOTAL ASSETS $ 19,143,361 $ 17,083,436

LIABILITIES:
Reserve for losses and loss adjustment expenses $ 9,969,148 $ 8,331,288
Unearned premium reserve 1,628,717 1,312,386
Funds held under reinsurance treaties 125,463 110,836
Losses in the course of payment 193,948 82,915
Commission reserves 24,932 52,037
Other net payable to reinsurers 1,158,259 815,298
4.868% Senior notes due 6/1/2044 396,804 396,714
6.6% Long term notes due 5/1/2067 236,536 236,462
Accrued interest on debt and borrowings 7,564 3,537
Income taxes (29,533 ) 148,940
Unsettled securities payable 39,660 27,121
Other liabilities 224,219 267,349
         Total liabilities 13,975,717 11,784,883

Commitments and Contingencies (Note 7)

STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized;
     1,000 shares issued and outstanding (2017 and 2016) - -
Additional paid-in capital 387,772 387,567
Accumulated other comprehensive income (loss), net of deferred income tax expense
     (benefit) of $9,405 at 2017 and ($19,549) at 2016 17,459 (36,315 )
Retained earnings 4,762,413 4,947,301
         Total stockholder's equity 5,167,644 5,298,553
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 19,143,361 $ 17,083,436

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

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
	(unaudited)				(unaudited)
REVENUES:
Premiums earned	$	1,615,457	$	1,428,400	$	4,648,422	$	4,074,477
Net investment income		135,428		95,592		244,782		270,835
Net realized capital gains (losses):
Credit allowances on fixed maturity securities		2,289		-		(17,636)		-
Other-than-temporary impairments on fixed maturity securities		-		(6,968)		-		(14,187)
Other net realized capital gains (losses)		112,904		119,510		(89,664)		404,348
Total net realized capital gains (losses)		115,193		112,542		(107,300)		390,161
Other income (expense)		(1,790)		(2,673)		(11,410)		(8,459)
Total revenues		1,864,288		1,633,861		4,774,494		4,727,014

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		1,277,851		1,098,093		3,283,196		2,737,411
Commission, brokerage, taxes and fees		322,404		357,681		1,001,207		962,674
Other underwriting expenses		109,366		95,693		304,705		257,426
Corporate expenses		4,206		3,183		11,441		7,353
Interest, fee and bond issue cost amortization expense		6,535		7,802		20,917		27,314
Total claims and expenses		1,720,362		1,562,452		4,621,466		3,992,178

INCOME (LOSS) BEFORE TAXES		143,926		71,409		153,028		734,836
Income tax expense (benefit)		24,120		10,272		(12,830)		141,169

NET INCOME (LOSS)	$	119,806	$	61,137	$	165,858	$	593,667

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		38,572		24,454		104,598		180,998
Less: reclassification adjustment for realized losses (gains) included in net income (loss)		(2,605)		2,085		28,824		6,927
Total URA(D) on securities arising during the period		35,967		26,539		133,422		187,925

Foreign currency translation adjustments		14,414		2,881		(6,783)		4,970

Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		1,806		1,364		4,532		3,666
Total benefit plan net gain (loss) for the period		1,806		1,364		4,532		3,666
Total other comprehensive income (loss), net of tax		52,187		30,784		131,171		196,561

COMPREHENSIVE INCOME (LOSS)	$	171,992	$	91,921	$	297,028	$	790,228

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

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
(unaudited) (unaudited)
REVENUES:
Premiums earned $ 518,507 $ 556,653 $ 1,457,759 $ 1,527,433
Net investment income 73,417 64,570 206,166 196,887
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities (1,473 ) (836 ) (4,179 ) (25,242 )
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income (loss) - - - -
Realized gain(loss) on sale of subsidiary - (28,032 ) - (28,032 )
Other net realized capital gains (losses) 229,962 (21,195 ) 258,145 (34,001 )
Total net realized capital gains (losses) 228,489 (50,063 ) 253,966 (87,275 )
Other income (expense) 1,486 (13,208 ) 21,996 (10,806 )
Total revenues 821,899 557,952 1,939,887 1,626,239

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses 1,331,558 301,603 1,918,508 936,201
Commission, brokerage, taxes and fees 34,545 82,778 147,565 219,552
Other underwriting expenses 57,713 64,149 181,805 181,706
Corporate expenses 1,132 1,835 6,241 6,181
Interest, fee and bond issue cost amortization expense 7,161 8,859 23,974 26,576
Total claims and expenses 1,432,109 459,224 2,278,093 1,370,216

INCOME (LOSS) BEFORE TAXES (610,210 ) 98,728 (338,206 ) 256,023
Income tax expense (benefit) (220,486 ) 22,425 (153,318 ) 69,358

NET INCOME (LOSS) $ (389,724 ) $ 76,303 $ (184,888 ) $ 186,665

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period 530 3,808 13,794 62,672
Less: reclassification adjustment for realized losses (gains) included in net income (loss) (1,674 ) (2,767 ) (8,618 ) 23,085
Total URA(D) on securities arising during the period (1,144 ) 1,041 5,176 85,757

Foreign currency translation adjustments 34,281 (2,642 ) 43,220 27,779

Benefit plan actuarial net gain (loss) for the period - - - -
Reclassification adjustment for amortization of net (gain) loss included in net income (loss) 1,369 1,268 5,377 3,949
Total benefit plan net gain (loss) for the period 1,369 1,268 5,377 3,949
Total other comprehensive income (loss), net of tax 34,507 (333 ) 53,774 117,485

COMPREHENSIVE INCOME (LOSS) $ (355,217 ) $ 75,970 $ (131,114 ) $ 304,150

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

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF

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

(Dollars in thousands, except share amounts)	2020		2019
	(unaudited)
COMMON STOCK (shares outstanding):
Balance, January 1		1,000		1,000
Balance, March 31		1,000		1,000
Balance, June 30		1,000		1,000
Balance, September 30		1,000		1,000

ADDITIONAL PAID-IN CAPITAL:
Balance, January 1	$	1,100,678	$	1,100,315
Share-based compensation plans		103		87
Balance, March 31		1,100,781		1,100,402
Share-based compensation plans		101		87
Balance, June 30		1,100,882		1,100,489
Share-based compensation plans		101		84
Balance, September 30		1,100,983		1,100,573

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES:
Balance, January 1		64,324		(126,254)
Net increase (decrease) during the period		(178,351)		98,148
Balance, March 31		(114,027)		(28,106)
Net increase (decrease) during the period		257,335		67,629
Balance, June 30		143,308		39,523
Net increase (decrease) during the period		52,187		30,784
Balance, September 30		195,495		70,307

RETAINED EARNINGS:
Balance, January 1		4,692,423		4,062,696
Change to beginning balance due to adoption of ASU 2016-13		907		-
Net income (loss)		316,645		251,610
Balance, March 31		5,009,975		4,314,306
Net income (loss)		(270,593)		280,921
Balance, June 30		4,739,382		4,595,227
Net income (loss)		119,806		61,137
Balance, September 30		4,859,188		4,656,364

TOTAL STOCKHOLDER'S EQUITY, September 30	$	6,155,666	$	5,827,244

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

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands, except share amounts) 2017 2016 2017 2016
(unaudited) (unaudited)
COMMON STOCK (shares outstanding):
Balance, beginning of period 1,000 1,000 1,000 1,000
Balance, end of period 1,000 1,000 1,000 1,000

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period $ 387,705 $ 382,537 $ 387,567 $ 374,789
Share-based compensation plans 67 2,437 205 10,185
Balance, end of period 387,772 384,974 387,772 384,974

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, beginning of period (17,048 ) 55,682 (36,315 ) (62,136 )
Net increase (decrease) during the period 34,507 (333 ) 53,774 117,485
Balance, end of period 17,459 55,349 17,459 55,349

RETAINED EARNINGS:
Balance, beginning of period 5,152,137 4,756,019 4,947,301 4,645,657
Net income (loss) (389,724 ) 76,303 (184,888 ) 186,665
Balance, end of period 4,762,413 4,832,322 4,762,413 4,832,322

TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 5,167,644 $ 5,272,645 $ 5,167,644 $ 5,272,645

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

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
(Dollars in thousands)	2020		2019
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	165,858	$	593,667
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		(182,948)		(115,834)
Decrease (increase) in funds held by reinsureds, net		(30,632)		(18,129)
Decrease (increase) in reinsurance receivables		288,732		107,427
Decrease (increase) in income taxes		162,490		226,147
Decrease (increase) in prepaid reinsurance premiums		17,584		(114,587)
Increase (decrease) in reserve for losses and loss adjustment expenses		843,790		240,321
Increase (decrease) in unearned premiums		201,163		321,643
Increase (decrease) in other net payable to reinsurers		76,161		24,093
Increase (decrease) in losses in course of payment		116,447		(44,192)
Change in equity adjustments in limited partnerships		7,020		(42,959)
Distribution of limited partnership income		41,167		39,247
Change in other assets and liabilities, net		(94,329)		(33,863)
Non-cash compensation expense		23,901		20,425
Amortization of bond premium (accrual of bond discount)		7,109		3,416
Net realized capital (gains) losses		107,300		(390,161)
Net cash provided by (used in) operating activities		1,750,813		816,661

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		681,605		672,207
Proceeds from fixed maturities sold - available for sale, at market value		420,491		2,217,734
Proceeds from fixed maturities sold - available for sale, at fair value		2,054		2,706
Proceeds from equity securities sold - at fair value		328,519		184,898
Distributions from other invested assets		157,703		133,130
Cost of fixed maturities acquired - available for sale, at market value		(2,084,790)		(3,071,436)
Cost of equity securities acquired - at fair value		(459,572)		(269,672)
Cost of other invested assets acquired		(253,357)		(212,910)
Net change in short-term investments		(627,143)		(100,012)
Net change in unsettled securities transactions		73,467		(30,252)
Net cash provided by (used in) investing activities		(1,761,023)		(473,607)

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation, net of expense		(23,596)		(20,166)
FHLB advances (repayments)		90,000		-
Cost of debt repurchase		(10,647)		-
Proceeds from issuance (cost of repayment) of note payable-affiliated		-		(300,000)
Net cash provided by (used in) financing activities		55,757		(320,166)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(5,156)		(6,578)

Net increase (decrease) in cash		40,390		16,310
Cash, beginning of period		411,122		404,522
Cash, end of period	$	451,512	$	420,832

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	(175,535)	$	(85,216)
Interest paid		16,416		22,421

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

Nine Months Ended
September 30,
(Dollars in thousands) 2017 2016
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (184,888 ) $ 186,665
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable (432,477 ) (155,717 )
Decrease (increase) in funds held by reinsureds, net 415 (948 )
Decrease (increase) in reinsurance receivables (649,539 ) (120,745 )
Decrease (increase) in income taxes (206,857 ) 35,647
Decrease (increase) in prepaid reinsurance premiums (330,345 ) (94,400 )
Increase (decrease) in reserve for losses and loss adjustment expenses 1,579,394 322,226
Increase (decrease) in unearned premiums 310,237 94,847
Increase (decrease) in other net payable to reinsurers 336,582 (216,024 )
Increase (decrease) in losses in course of payment 110,669 1,860
Change in equity adjustments in limited partnerships (20,415 ) (17,067 )
Distribution of limited partnership income 23,174 31,739
Change in other assets and liabilities, net (88,583 ) (125,150 )
Non-cash compensation expense 7,675 7,453
Amortization of bond premium (accrual of bond discount) 13,675 13,754
Amortization of underwriting discount on senior notes 3 3
Net realized capital (gains) losses (253,966 ) 87,275
Net cash provided by (used in) operating activities 214,754 51,418

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value 771,950 572,224
Proceeds from fixed maturities sold - available for sale, at market value 1,063,126 433,655
Proceeds from fixed maturities sold - available for sale, at fair value - 1,587
Proceeds from equity securities sold - available for sale, at fair value 302,407 531,894
Proceeds from sale of subsidiary (net of cash disposed) - 47,721
Distributions from other invested assets 1,459,677 1,119,428
Cost of fixed maturities acquired - available for sale, at market value (1,809,485 ) (1,516,092 )
Cost of fixed maturities acquired - available for sale, at fair value - (3,940 )
Cost of equity securities acquired - available for sale, at fair value (326,444 ) (253,041 )
Cost of other invested assets acquired (1,584,617 ) (1,299,682 )
Net change in short-term investments 79,509 376,832
Net change in unsettled securities transactions (189,980 ) 40,771
Net cash provided by (used in) investing activities (233,857 ) 51,357

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation (7,471 ) 2,732
Net cash provided by (used in) financing activities (7,471 ) 2,732

EFFECT OF EXCHANGE RATE CHANGES ON CASH 31,111 24,242

Net increase (decrease) in cash 4,537 129,749
Cash, beginning of period 297,794 155,429
Cash, end of period $ 302,331 $ 285,178

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered) $ 53,273 $ 30,877
Interest paid 19,783 17,608

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

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three and Nine Months Ended September 30, ~~2017~~2020, and ~~2016~~

2019

1.GENERAL

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

During the ~~third~~fourth quarter of ~~2016, the Company established domestic subsidiaries,~~2018, Everest ~~Premier Insurance Company ("Everest Premier") and Everest Denali Insurance Company ("Everest Denali"), which will be used in the continued expansion of the Insurance operations.~~

~~Effective August 24, 2016, the Company sold its wholly-owned subsidiary, Heartland Crop Insurance Company ("Heartland"~~Global Services (“Global Services”), a ~~managing agent for crop insurance,~~previously affiliated company, was contributed to ~~CGB Diversified Services, Inc. ("CGB"). The operating results of Heartland for the period owned are included within the Company's financial statements.~~

Holdings from its parent company, Holdings Ireland.

2.BASIS OF PRESENTATION

The unaudited interim consolidated financial statements of the Company for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ~~("GAAP"~~(“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, ~~2016~~2019 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014~~2017 included in the ~~Company's~~Company’s most recent Form 10-K filing.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates. This is particularly true given the fluid and continuing nature of the COVID-19 pandemic. This is an ongoing event and so is the Company’s evaluation and analysis. While the Company’s analysis considers all aspects of its operations, it does not take into account legal, regulatory or legislative intervention that could retroactively mandate or expand coverage provisions. Given the uncertainties in the current public health and economic environment, there could be an adverse impact on results for the Property & Casualty industry and the Company for the remainder of the year. The impact is dependent on the shape and length of the economic recovery.

With recent changes in executive management and organizational structure, the Company manages its reinsurance and insurance operations as autonomous units and key strategic decisions are based on the aggregate operating results and projections for these segments of business. Accordingly, effective January 1, 2020, the Company revised its reporting segments to Reinsurance Operations and Insurance Operations. This replaces the previous reported segments of U.S. Reinsurance, International (reinsurance) and Insurance. The prior year presented segment information has been reformatted to reflect this change.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior ~~years'~~years’ amounts to conform to the ~~2017~~2020 presentation.

Application of Recently Issued Accounting Standard Changes.

Modernization of Regulation S-K Disclosures. In August 2020, the Securities and Exchange Commission (“SEC”) issued Final Rule Release #33-10825 which addresses the modernization of the disclosure

requirements for business, legal proceeding and risk factor disclosures in Regulation S-K filings. Rule #33-10825 will become effective for all financial reports filed after November 9, 2020 (30 days after its publication in the Federal Register) and will be adopted by the Company in the fourth quarter of 2020 for implementation within its 2020 10-K filings.

Accounting for Income Taxes. In December 2019, The Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, which provides simplification of existing guidance for income taxes, including the removal of certain exceptions related to recognition of deferred tax liabilities on foreign subsidiaries. The guidance is effective for annual reporting periods beginning after December 15, 2020 and interim periods within that annual reporting period. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its financial statements.

Simplification of Disclosure Requirements. In August 2018, the SEC issued Final Rule Release #33-10532 (“the Rule”) which addresses the simplification of the SEC’s disclosure requirements for quarterly and annual financial reports. The main change addressed by the Rule that is applicable to the Company is a new requirement to disclose changes in equity by line item with subtotals for each interim reporting period on the Statements of Changes in Shareholders’ Equity. The Rule became effective for all financial reports filed after November 5, 2018 (30 days after its publication in the Federal Register), except for the additional requirement for the Statements of Changes in Shareholders’ Equity which was to be implemented for first quarter 2019 reporting. The Company has adopted the portions of the Rule that became effective November 5, 2018. The portion of the Rule related to the new requirement for the Statements of Changes in Shareholders’ Equity was adopted by the Company in the first quarter of 2019.

Accounting for Cloud Computing Arrangement. In August 2018, FASB issued ASU 2018-15, which outlines accounting for implementation costs of a cloud computing arrangement that is a service contract. This guidance requires that implementation costs of a cloud computing arrangement that is a service contract must be capitalized and expensed in accordance with the existing provisions provided in Subtopic 350-40 regarding development of internal use software. In addition, any capitalized implementation costs should be amortized over the term of the hosting arrangement. The guidance is effective for annual reporting periods beginning after December 15, 2019 and interim periods within that annual reporting period. The Company adopted the guidance as of January 1, 2020. The adoption of ASU 2018-15 did not have a material impact on the Company’s financial statements.

Accounting for Impact on Income Taxes due to Tax Reform. In December 2017, the SEC issued Staff Accounting Bulletin (“SAB”) 118, which provides guidance on the application of FASB Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, due to the enactment of TCJA. SAB 118 became effective upon release. The Company has adopted the provisions of SAB 118 with respect to measuring the tax effects for the modifications to the determination of tax basis loss reserves. In 2018, the Company recorded adjustments to the amount of tax expense it recorded in 2017 with respect to the TCJA as estimated amounts were finalized, which did not have a material impact on the Company’s financial statements.

Amortization of Bond Premium. In March 2017, FASB issued ASU 2017-08 which outlines guidance on the amortization period for premium on callable debt securities. The new guidance requires that the premium on callable debt securities be amortized through the earliest call date rather than through the maturity date of the callable security. The guidance is effective for annual and interim reporting periods beginning after December 15, ~~2019.~~2018. The Company ~~does not expect~~adopted the guidance effective January 1, 2019. The adoption of ASU 2017-08 todid not have a material impact on ~~its~~the Company’s financial statements.

~~Presentation and Disclosure of Net Periodic Benefit Costs.~~ In March 2017, FASB issued ASU 2017-07 which outlines guidance on the presentation of net periodic costs of benefit plans. The new guidance requires that the service cost component of net periodic benefit costs be reported within the same line item of the statements of operations as other compensation costs are reported. Other components of net periodic benefit costs should be reported separately. Footnote disclosure is required to state within which line items of the statements of operations the components are reported. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its financial statements.

~~Disclosure of Restricted Cash.~~ In November 2016, FASB issued ASU 2016-18 which outlines guidance on the presentation in the statements of cash flows of changes in restricted cash. The new guidance requires that the statements of cash flows should reflect all changes in cash, cash equivalents and restricted cash in total and not segregated individually. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2016-18 to have a material impact on its financial statements.

~~Intra-Entity Asset Transfers.~~ In October 2016, FASB issued ASU 2016-16 which outlines guidance on the tax accounting for intra-entity asset sales and transfers, other than inventory. The new guidance requires that reporting entities recognize tax expense from the intra-entity transfer of an asset in the seller's tax jurisdiction at the time of transfer and recognize any deferred tax asset in the buyer's tax jurisdiction at the time of transfer. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2016-16 to have a material impact on its financial statements.

Valuation of Financial Instruments. In June 2016, FASB issued ASU 2016-13 (and has subsequently issued related guidance and amendments in ASU 2019-11 and ASU 2019-10 in November 2019) which ~~outlines~~outline guidance on the valuation of and accounting for assets measured at amortized cost and available for sale debt securities. The new guidance requires the carrying value of assets measured at amortized cost, ~~will now~~including reinsurance and premiums receivable, to be presented as the net amount expected to be collected on the financial asset (amortized cost less an allowance for credit losses valuation account). ~~Available for sale~~The allowance reflects expected credit losses of the financial asset which considers available information using a combination both historical information, current market conditions and reasonable and supportable forecasts. For available-for-sale debt securities, ~~will~~the guidance modified the previous other than temporary impairment model, now ~~record credit losses through~~

requiring an allowance for estimated credit related losses rather than a permanent impairment, which will be limited to the amount by which fair value is below amortized cost. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019. The Company adopted the guidance effective January 1, 2020, on a modified retrospective basis. The adoption resulted in a cumulative adjustment of $907 thousand in retained earnings, net of tax, which is ~~currently evaluating~~disclosed separately within the ~~impact~~Consolidated Statements of ~~the adoption of ASU 2016-13 on its financial statements.~~

Shareholders’ Equity.

Leases. In February 2016, FASB issued ASU 2016-02 (and subsequently issued ASU 2018-11 in July, 2018) which ~~outlines~~outline new guidance on the accounting for leases. The new guidance requires the recognition of lease assets and lease liabilities on the balance sheets for most leases that were previously deemed operating leases and required only lease expense presentation in the statements of operations. The guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The Company ~~is currently evaluating~~adopted ASU 2016-02 effective January 1, 2019 and elected to utilize a cumulative-effect adjustment to the ~~impact~~opening balance of retained earnings for the year of adoption. Accordingly, the Company’s reporting for the comparative periods prior to adoption continue to be presented in the financial statements in accordance with previous lease accounting guidance. The Company also elected to apply the package of practical expedients applicable to the Company in the updated guidance for transition for leases in effect at adoption. The Company did not elect the hindsight practical expedient to determine the lease term of existing leases (e.g. The Company did not re-assess lease renewals, termination options nor purchase options in determining lease terms). The adoption of the updated guidance resulted in the Company recognizing a right-of-use asset of $60,325 thousand as part of other assets and a lease liability of $66,551 thousand as part of other liabilities in the consolidated balance sheet, as well as de-recognizing the liability for deferred rent that was required under the previous guidance. The cumulative effect adjustment to the opening balance of retained earnings was zero. The adoption of ~~ASU 2016-02 on its financial statements.~~

~~Recognition and Measurement of Financial Instruments.~~ ~~In January 2016,~~ the FASB issued ASU 2016-01 which outlines revised guidance on the accounting for equity investments. The new guidance states that all equity investments in unconsolidated entities will be measures at fair value, with the change in value being recorded through the income statement rather than being recorded within other comprehensive income. The updated guidance ~~is effective for annual and interim reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2016-01 on its financial statements.~~

~~Disclosures about Short-Duration Contracts.~~ In May 2015, the FASB issued ASU 2015-09, authoritative guidance regarding required disclosures associated with short duration insurance contracts. The new disclosure requirements focus on information about initial claim estimates and subsequent claim estimate adjustment, methodologies in estimating claims and the timing, frequency and severity of claims related to short duration insurance contracts. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim reporting periods beginning after December 15, 2016. The Company implemented this guidance effective in the fourth quarter of 2016.

~~Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share.~~ In May 2015, the FASB issued ASU 2015-07, which removes the requirement to categorize, within the fair value hierarchy, investments for which fair values are estimated using the net asset value practical expedient provided by Accounting Standards Codification 820, Fair Value Measurement. The updated guidance is effective for annual reporting periods beginning after December 15, 2015. The adoption did not have a material ~~impact~~effect on the ~~Company's financial statements.~~

~~Debt Issuance Costs.~~ ~~In April 2015, The FASB issued ASU 2015–03, authoritative guidance on the presentation~~Company’s results of debt issuance costs. This guidance requires that debt issuance costs be presented within the balance sheet as a reduction of the carrying value of the debt liability, rather than as a separate asset. This guidance is effective for annual reporting periods beginning after December 15, 2015 and related

operations or liquidity.

~~interim reporting periods. The Company implemented this guidance effective in the second quarter of 2016. The adoption did not have a material impact on the Company's financial statements.~~

~~Consolidation.~~ In February 2015, the FASB issued ASU 2015-02, authoritative guidance regarding consolidation of reporting entities. The new guidance focuses on the required evaluation of whether certain legal entities should be consolidated. This guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Based upon this guidance, the Company has determined that the separate segregated accounts associated with Mt. Logan Re should not be consolidated. The Company implemented the guidance effective January 1, 2016.

~~Revenue Recognition.~~ In May 2014, the FASB issued ASU 2014-09 which outlines revised guidance on the recognition of revenue arising from contracts with customers. The new guidance states that reporting entities should apply certain steps to determine when revenue should be recognized, based upon fulfillment of performance obligations to complete contracts. The updated guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2014-09 to have a material impact on its financial statements.

Any issued guidance and pronouncements, other than those directly ~~references~~referenced above, are deemed by the Company to be either not applicable or immaterial to its financial statements.

3. ~~REVISIONS TO FINANCIAL STATEMENTS~~

~~In preparing its second quarter of 2017 financial statements,~~INVESTMENTS

Effective January 1, 2020, the Company altered its processing of ceding certain commissions and deferred acquisition costs under an affiliated quota share agreement. In previous reporting periods, these expenses were ceded based upon a quarter lag. In the second quarter of 2017, the quarter lag was eliminated and these expenses are now recorded on a current quarter basis. Although management determined that the impact of the ceding lag was not material to prior period financial statements, the impact of eliminating the ceding lag would have significantly impacted results within the second quarter of 2017. As a result, prior period balances have been revised in the applicable financial statements and corresponding footnotes to eliminate the impact ofadopted ASU 2016-13 which modified the previous ~~recording lag.~~

Management assessed the materiality of this change within prior period financial statements based upon SEC Staff Accounting Bulletin Number 99, Materiality, which is since codified in Accounting Standards Codification ("ASC") 250, Accounting Changes and Error Corrections. In accordance with ASC 250, the prior period comparative financial statements that are presented herein have been revised.

~~The following tables present line items~~other than temporary impairment model for prior period financial statements that have been affected by the revision. For these line items, the tables detail the amounts as previously reported, the impact upon those line items due to the revision, and the amounts as currently revised within the financial statements.

CONSOLIDATED BALANCE SHEETS March 31, 2017
As Previously Impact of
Reported Revisions As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs $ 62,308 $ (4,994 ) $ 57,314
TOTAL ASSETS $ 17,587,840 $ (4,994 ) $ 17,582,846

LIABILITIES:
Other net payable to reinsurers $ 832,307 $ (41,746 ) $ 790,561
Income taxes 223,629 5,625 229,254
Total liabilities 12,139,623 (36,121 ) 12,103,502

STOCKHOLDERS EQUITY:
Retained earnings 5,085,352 31,127 5,116,479
Total stockholder's equity 5,448,217 31,127 5,479,344
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 17,587,840 $ (4,994 ) $ 17,582,846

CONSOLIDATED BALANCE SHEETS December 31, 2016 December 31, 2015
As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs $ 73,924 $ (5,303 ) $ 68,621 $ 92,651 $ (6,249 ) $ 86,402
TOTAL ASSETS $ 17,088,739 $ (5,303 ) $ 17,083,436 $ 16,695,203 $ (6,249 ) $ 16,688,954

LIABILITIES:
Other net payable to reinsurers $ 860,391 $ (45,093 ) $ 815,298 $ 1,225,260 $ (37,480 ) $ 1,187,780
Income taxes 142,143 6,797 148,940 68,024 4,132 72,156
Total liabilities 11,823,179 (38,296 ) 11,784,883 11,763,992 (33,348 ) 11,730,644

STOCKHOLDERS EQUITY:
Retained earnings 4,914,308 32,993 4,947,301 4,618,558 27,099 4,645,657
Total stockholder's equity 5,265,560 32,993 5,298,553 4,931,211 27,099 4,958,310
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 17,088,739 $ (5,303 ) $ 17,083,436 $ 16,695,203 $ (6,249 ) $ 16,688,954

CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2016 Year Ended December 31, 2015
AND COMPREHENSIVE INCOME (LOSS): As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees $ 289,982 $ (8,558 ) $ 281,424 $ 315,069 $ (2,744 ) $ 312,325
Total claims and expenses 1,928,940 (8,558 ) 1,920,382 1,892,062 (2,744 ) 1,889,318

INCOME (LOSS) BEFORE TAXES 390,433 8,558 398,991 604,542 2,744 607,286
Income tax expense (benefit) 94,683 2,664 97,347 191,889 3,007 194,896

NET INCOME (LOSS) $ 295,750 $ 5,894 $ 301,644 $ 412,653 $ (263 ) $ 412,390

COMPREHENSIVE INCOME (LOSS) $ 321,571 $ 5,894 $ 327,465 $ 345,998 $ (263 ) $ 345,735

CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2014 Three Months Ended March 31, 2017
AND COMPREHENSIVE INCOME (LOSS): As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees $ 339,402 $ (427 ) $ 338,975 $ 49,470 $ 3,037 $ 52,507
Total claims and expenses 1,930,749 (427 ) 1,930,322 411,543 3,037 414,580

INCOME (LOSS) BEFORE TAXES 657,688 427 658,115 247,984 (3,037 ) 244,947
Income tax expense (benefit) 203,562 1,125 204,687 76,940 (1,171 ) 75,769

NET INCOME (LOSS) $ 454,126 $ (698 ) $ 453,428 $ 171,044 $ (1,866 ) $ 169,178

COMPREHENSIVE INCOME (LOSS) $ 370,997 $ (698 ) $ 370,299 $ 182,587 $ (1,866 ) $ 180,721

CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
AND COMPREHENSIVE INCOME (LOSS): As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees $ 85,563 $ (2,785 ) $ 82,778 $ 226,511 $ (6,959 ) $ 219,552
Total claims and expenses 462,009 (2,785 ) 459,224 1,377,175 (6,959 ) 1,370,216

INCOME (LOSS) BEFORE TAXES 95,943 2,785 98,728 249,064 6,959 256,023
Income tax expense (benefit) 21,145 1,280 22,425 66,990 2,368 69,358

NET INCOME (LOSS) $ 74,798 $ 1,505 $ 76,303 $ 182,074 $ 4,591 $ 186,665

COMPREHENSIVE INCOME (LOSS) $ 74,465 $ 1,505 $ 75,970 $ 299,559 $ 4,591 $ 304,150

CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended June 30, 2016 Six Months Ended June 30, 2016
AND COMPREHENSIVE INCOME (LOSS): As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees $ 72,126 $ (1,717 ) $ 70,409 $ 140,948 $ (4,174 ) $ 136,774
Total claims and expenses 479,860 (1,717 ) 478,143 915,166 (4,174 ) 910,992

INCOME (LOSS) BEFORE TAXES 101,332 1,717 103,049 153,121 4,174 157,295
Income tax expense (benefit) 32,982 695 33,677 45,845 1,088 46,933

NET INCOME (LOSS) $ 68,350 $ 1,022 $ 69,372 $ 107,276 $ 3,086 $ 110,362

COMPREHENSIVE INCOME (LOSS) $ 124,381 $ 1,022 $ 125,403 $ 225,094 $ 3,086 $ 228,180

CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, 2016
AND COMPREHENSIVE INCOME (LOSS): As Previously Impact of
Reported Revisions As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees $ 68,822 $ (2,457 ) $ 66,365
Total claims and expenses 435,306 (2,457 ) 432,849

INCOME (LOSS) BEFORE TAXES 51,789 2,457 54,246
Income tax expense (benefit) 12,863 393 13,256

NET INCOME (LOSS) $ 38,926 $ 2,064 $ 40,990

COMPREHENSIVE INCOME (LOSS) $ 100,713 $ 2,064 $ 102,777

CONSOLIDATED STATEMENTS OF Year Ended December 31, 2016 Year Ended December 31, 2015
CHANGES IN STOCKHOLDER'S EQUITY As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period $ 4,618,558 $ 27,099 $ 4,645,657 $ 4,205,905 $ 27,362 $ 4,233,267
Net income (loss) 295,750 5,894 301,644 412,653 (263 ) 412,390
Balance, end of period 4,914,308 32,993 4,947,301 4,618,558 27,099 4,645,657
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 5,265,560 $ 32,993 $ 5,298,553 $ 4,931,211 $ 27,099 $ 4,958,310

CONSOLIDATED STATEMENTS OF Year Ended December 31, 2014 Three Months Ended March 31, 2017
CHANGES IN STOCKHOLDER'S EQUITY As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period $ 3,751,779 $ 28,060 $ 3,779,839 $ 4,914,308 $ 32,993 $ 4,947,301
Net income (loss) 454,126 (698 ) 453,428 171,044 (1,866 ) 169,178
Balance, end of period 4,205,905 27,362 4,233,267 5,085,352 31,127 5,116,479
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 4,572,717 $ 27,362 $ 4,600,079 $ 5,448,217 $ 31,127 $ 5,479,344

CONSOLIDATED STATEMENTS OF Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
CHANGES IN STOCKHOLDER'S EQUITY As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period $ 4,725,834 $ 30,185 $ 4,756,019 $ 4,618,558 $ 27,099 $ 4,645,657
Net income (loss) 74,798 1,505 76,303 182,074 4,591 186,665
Balance, end of period 4,800,632 31,690 4,832,322 4,800,632 31,690 4,832,322
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 5,240,955 $ 31,690 $ 5,272,645 $ 5,240,955 $ 31,690 $ 5,272,645

CONSOLIDATED STATEMENTS OF Three Months Ended June 30, 2016 Six Months Ended June 30, 2016
CHANGES IN STOCKHOLDER'S EQUITY As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period $ 4,657,484 $ 29,163 $ 4,686,647 $ 4,618,558 $ 27,099 $ 4,645,657
Net income (loss) 68,350 1,022 69,372 107,276 3,086 110,362
Balance, end of period 4,725,834 30,185 4,756,019 4,725,834 30,185 4,756,019
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 5,164,053 $ 30,185 $ 5,194,238 $ 5,164,053 $ 30,185 $ 5,194,238

CONSOLIDATED STATEMENTS OF Three Months Ended March 31, 2016
CHANGES IN STOCKHOLDER'S EQUITY As Previously Impact of
Reported Revisions As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period $ 4,618,558 $ 27,099 $ 4,645,657
Net income (loss) 38,926 2,064 40,990
Balance, end of period 4,657,484 29,163 4,686,647
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD $ 5,036,717 $ 29,163 $ 5,065,880

CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2016 Year Ended December 31, 2015
As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 295,750 $ 5,894 $ 301,644 $ 412,653 $ (263 ) $ 412,390
Decrease (increase) in income taxes 60,325 2,666 62,991 57,487 3,007 60,494
Increase (decrease) in other net payable to reinsurers (364,242 ) (7,614 ) (371,856 ) 204,526 (8,590 ) 195,936
Change in other assets and liabilities, net 16,090 (946 ) 15,144 7,499 5,846 13,345

CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2014 Three Months Ended March 31, 2017
As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 454,126 $ (698 ) $ 453,428 $ 171,044 $ (1,866 ) $ 169,178
Decrease (increase) in income taxes 68,206 1,125 69,331 75,304 (1,172 ) 74,132
Increase (decrease) in other net payable to reinsurers 5,130 (3,216 ) 1,914 (30,525 ) 3,347 (27,178 )
Change in other assets and liabilities, net 81,388 2,789 84,177 18,204 (309 ) 17,895

CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 2016 Six Months Ended June 30, 2016
As Previously Impact of As Previously Impact of
Reported Revisions As Revised Reported Revisions As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 182,074 $ 4,591 $ 186,665 $ 107,276 $ 3,086 $ 110,362
Decrease (increase) in income taxes 33,279 2,368 35,647 8,190 1,089 9,279
Increase (decrease) in other net payable to reinsurers (209,260 ) (6,764 ) (216,024 ) (370,242 ) (3,111 ) (373,353 )
Change in other assets and liabilities, net (124,955 ) (195 ) (125,150 ) 14,216 (1,064 ) 13,152

CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2016
As Previously Impact of
Reported Revisions As Revised
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 38,926 $ 2,064 $ 40,990
Decrease (increase) in income taxes 6,546 393 6,939
Increase (decrease) in other net payable to reinsurers (106,588 ) (1,122 ) (107,710 )
Change in other assets and liabilities, net 24,496 (1,335 ) 23,161

~~4. INVESTMENTS~~

~~The amortized cost, market value and gross unrealized appreciation and depreciation of~~ available for sale fixed maturity ~~equity security investments, carried at~~securities. The guidance requires the Company to record allowances for credit losses for securities that are deemed to have valuation deterioration due to credit related factors. The initial table below presents the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and market value of fixed maturity securities as of September 30, 2020 in accordance with ASU 2016-13 guidance. The second table presents the amortized cost, gross unrealized appreciation/(depreciation), market value and other-than-temporary impairments ~~("OTTI"~~(“OTTI”) in ~~accumulated other comprehensive income ("AOCI") are~~AOCI as ~~follows for the periods indicated:~~of December 31, 2019, in accordance with previously applicable guidance

	At September 30, 2020
	Amortized		Allowances for		Unrealized		Unrealized		Market
(Dollars in thousands)	Cost		Credit Losses		Appreciation		Depreciation		Value
Fixed maturity securities
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	744,050	$	-	$	28,063	$	-	$	772,113
Obligations of U.S. states and political subdivisions		513,785		-		30,938		(2,440)		542,283
Corporate securities		3,060,951		(17,237)		144,769		(52,567)		3,135,916
Asset-backed securities		1,239,605		-		20,867		(11,316)		1,249,156
Mortgage-backed securities
Commercial		387,944		-		36,166		(1,071)		423,039
Agency residential		685,446		-		34,218		(382)		719,282
Non-agency residential		337		-		-		(3)		334
Foreign government securities		648,542		-		45,532		(3,426)		690,648
Foreign corporate securities		986,512		(399)		63,622		(5,819)		1,043,916
Total fixed maturity securities	$	8,267,172	$	(17,636)	$	404,175	$	(77,024)	$	8,576,687

At September 30, 2017
Amortized Unrealized Unrealized Market OTTI in AOCI
(Dollars in thousands) Cost Appreciation Depreciation Value (a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 657,018 $ 2,088 $ (3,220 ) $ 655,886 $ -
Obligations of U.S. states and political subdivisions 652,525 24,061 (4,744 ) 671,842 -
Corporate securities 2,213,498 38,058 (11,965 ) 2,239,591 695
Asset-backed securities 153,400 451 (62 ) 153,789 -
Mortgage-backed securities
Commercial 59,311 334 (622 ) 59,023 -
Agency residential 683,178 1,904 (7,252 ) 677,830 -
Non-agency residential 55 7 - 62 -
Foreign government securities 520,431 19,038 (7,996 ) 531,473 -
Foreign corporate securities 1,034,840 25,601 (10,576 ) 1,049,865 374
Total fixed maturity securities $ 5,974,256 $ 111,542 $ (46,437 ) $ 6,039,361 $ 1,069

	At December 31, 2019
	Amortized		Unrealized		Unrealized		Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation		Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	768,374	$	10,128	$	(987)	$	777,515	$	-
Obligations of U.S. states and political subdivisions		506,347		29,651		(87)		535,911		-
Corporate securities		2,777,097		70,898		(26,438)		2,821,557		245
Asset-backed securities		761,607		5,659		(1,309)		765,957		-
Mortgage-backed securities
Commercial		311,961		17,242		(154)		329,049		-
Agency residential		625,612		19,395		(320)		644,687		-
Non-agency residential		1,638		-		-		1,638		-
Foreign government securities		646,149		18,908		(7,050)		658,007		27
Foreign corporate securities		935,640		31,257		(9,139)		957,758		333
Total fixed maturity securities	$	7,334,425	$	203,138	$	(45,484)	$	7,492,079	$	605

^11(a)

At December 31, 2016
Amortized Unrealized Unrealized Market OTTI in AOCI
(Dollars in thousands) Cost Appreciation Depreciation Value (a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 693,005 $ 2,509 $ (4,434 ) $ 691,080 $ -
Obligations of U.S. states and political subdivisions 723,938 18,016 (11,970 ) 729,984 -
Corporate securities 2,119,324 50,665 (15,786 ) 2,154,203 4,868
Asset-backed securities 136,826 330 (129 ) 137,027 -
Mortgage-backed securities
Commercial 75,435 510 (452 ) 75,493 -
Agency residential 721,772 2,365 (8,993 ) 715,144 -
Non-agency residential 76 12 - 88 -
Foreign government securities 495,572 22,088 (10,383 ) 507,277 -
Foreign corporate securities 944,546 30,015 (14,361 ) 960,200 175
Total fixed maturity securities $ 5,910,494 $ 126,510 $ (66,508 ) $ 5,970,496 $ 5,043

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

The amortized cost and market value of fixed maturity securities are shown in the following tables by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

	At September 30, 2020				At December 31, 2019
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale
Due in one year or less	$	774,274	$	771,432	$	569,506	$	563,730
Due after one year through five years		2,745,236		2,840,648		2,919,966		2,963,903
Due after five years through ten years		1,723,844		1,862,590		1,541,695		1,602,642
Due after ten years		710,486		710,206		602,440		620,473
Asset-backed securities		1,239,605		1,249,156		761,607		765,957
Mortgage-backed securities
Commercial		387,944		423,039		311,961		329,049
Agency residential		685,446		719,282		625,612		644,687
Non-agency residential		337		334		1,638		1,638
Total fixed maturity securities	$	8,267,172	$	8,576,687	$	7,334,425	$	7,492,079

At September 30, 2017 At December 31, 2016
Amortized Market Amortized Market
(Dollars in thousands) Cost Value Cost Value
Fixed maturity securities – available for sale
    Due in one year or less $ 403,948 $ 405,602 $ 394,401 $ 392,824
    Due after one year through five years 2,918,422 2,931,495 2,925,786 2,955,325
    Due after five years through ten years 1,024,154 1,045,455 879,762 894,166
    Due after ten years 731,788 766,105 776,436 800,429
Asset-backed securities 153,400 153,789 136,826 137,027
Mortgage-backed securities
Commercial 59,311 59,023 75,435 75,493
Agency residential 683,178 677,830 721,772 715,144
Non-agency residential 55 62 76 88
Total fixed maturity securities $ 5,974,256 $ 6,039,361 $ 5,910,494 $ 5,970,496

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Increase (decrease) during the period between the market value and cost of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	45,476	$	33,473	$	168,996	$	238,301
Fixed maturity securities, other-than-temporary impairment		-		119		-		(581)
Change in unrealized appreciation (depreciation), pre-tax		45,476		33,592		168,996		237,720
Deferred tax benefit (expense)		(9,509)		(7,028)		(35,574)		(49,917)
Deferred tax benefit (expense), other-than-temporary impairment		-		(25)		-		122
Change in unrealized appreciation (depreciation), net of deferred taxes, included in stockholder's equity	$	35,967	$	26,539	$	133,422	$	187,925

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities $ (3,197 ) $ 4,047 $ 9,077 $ 127,736
Fixed maturity securities, other-than-temporary impairment (158 ) (2,444 ) (3,974 ) 4,199
Other invested assets 1,595 - 2,860 -
Change in unrealized appreciation (depreciation), pre-tax (1,760 ) 1,603 7,963 131,935
Deferred tax benefit (expense) 561 (1,418 ) (4,178 ) (44,709 )
Deferred tax benefit (expense), other-than-temporary impairment 55 856 1,391 (1,469 )
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in stockholder's equity $ (1,144 ) $ 1,041 $ 5,176 $ 85,757

The Company ~~frequently~~ reviews all of its fixed maturity, available for sale securities ~~for declines in market value and focuses its attention on securities~~ whose fair value has fallen below ~~80% of~~ their amortized cost at the time of review. The Company then assesses whether the decline in value is ~~temporary~~due to non-credit related or ~~other-than-temporary.~~credit related factors. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. Generally, a change in a ~~security's~~security’s value caused by a change in the market, interest rate or foreign exchange environment does not constitute ~~an other-than-temporary~~a credit impairment, but rather a ~~temporary~~non-credit related decline in market value. ~~Temporary~~Non-credit related declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss). If the Company intends to sell the security or is more likely than not to sell the security, the Company records the entire fair value adjustment in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss). If the Company determines that the decline is ~~other-than-temporary~~credit related and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the ~~carrying value of~~Company establishes a credit allowance equal to the ~~investment is written down to fair value. The fair value adjustment that is~~estimated credit ~~or foreign exchange related~~loss and is recorded in net realized capital gains (losses) in the ~~Company's~~Company’s consolidated statements of operations and comprehensive income (loss). The amount of the allowance for a given security will generally be the difference between a discounted cash flow model and the Company’s carrying value. The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the ~~Company's~~ Company’s

consolidated balance sheets. The ~~Company's~~Company will adjust the credit allowance account for future changes in credit loss estimates for a security and record this adjustment through net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).

The Company does not create an allowance for uncollectible interest. If interest is not received when due, the interest receivable is immediately reversed and no additional interest is accrued. If future interest is received that has not been accrued, it is recorded as income at that time.

Prior to the adoption of ASU 2016-13 effective January 1, 2020, estimated credit losses were recorded as adjustments to the carrying value of the security and any subsequent improvement in market value were recorded through other comprehensive income.

The Company’s assessments are based on the ~~issuers~~issuers’ current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

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

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

	Duration of Unrealized Loss at September 30, 2020 By Security Type
	Less than 12 months					Greater than 12 months				Total
			��	Gross				Gross				Gross
	Market			Unrealized		Market		Unrealized		Market		Unrealized
(Dollars in thousands)	Value			Depreciation		Value		Depreciation		Value		Depreciation
Fixed maturity securities - available for sale
Obligations of U.S. states and political subdivisions		49,369			(2,275)		4,943		(165)		54,312		(2,440)
Corporate securities		422,208			(15,327)		145,733		(37,240)		567,941		(52,567)
Asset-backed securities		316,075			(8,299)		152,001		(3,017)		468,076		(11,316)
Mortgage-backed securities
Commercial		61,148			(1,067)		3,980		(4)		65,128		(1,071)
Agency residential		114,935			(378)		697		(4)		115,632		(382)
Non-agency residential		161			(2)		173		(1)		334		(3)
Foreign government securities		6,698			(94)		26,876		(3,332)		33,574		(3,426)
Foreign corporate securities		102,945			(2,080)		28,774		(3,739)		131,719		(5,819)
Total fixed maturity securities	$	1,073,539		$	(29,522)	$	363,177	$	(47,502)	$	1,436,716	$	(77,024)

	Duration of Unrealized Loss at September 30, 2020 By Maturity
	Less than 12 months				Greater than 12 months				Total
			Gross				Gross				Gross
	Market		Unrealized		Market		Unrealized		Market		Unrealized
(Dollars in thousands)	Value		Depreciation		Value		Depreciation		Value		Depreciation
Fixed maturity securities
Due in one year or less	$	26,900	$	(651)	$	47,826	$	(8,288)	$	74,726	$	(8,939)
Due in one year through five years		234,922		(9,460)		83,469		(5,596)		318,391		(15,056)
Due in five years through ten years		174,002		(3,638)		18,334		(1,158)		192,336		(4,796)
Due after ten years		145,396		(6,027)		56,697		(29,434)		202,093		(35,461)
Asset-backed securities		316,075		(8,299)		152,001		(3,017)		468,076		(11,316)
Mortgage-backed securities		176,244		(1,447)		4,850		(9)		181,094		(1,456)
Total fixed maturity securities	$	1,073,539	$	(29,522)	$	363,177	$	(47,502)	$	1,436,716	$	(77,024)

Duration of Unrealized Loss at September 30, 2017 By Security Type
Less than 12 months Greater than 12 months Total
Gross Gross Gross
Unrealized Unrealized Unrealized
(Dollars in thousands) Market Value Depreciation Market Value Depreciation Market Value Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 239,038 $ (2,191 ) $ 37,447 $ (1,029 ) $ 276,485 $ (3,220 )
Obligations of U.S. states and political subdivisions 89,509 (2,104 ) 67,956 (2,640 ) 157,465 (4,744 )
Corporate securities 415,341 (6,124 ) 155,808 (5,841 ) 571,149 (11,965 )
Asset-backed securities 30,657 (55 ) 1,912 (7 ) 32,569 (62 )
Mortgage-backed securities
Commercial 31,221 (487 ) 3,803 (135 ) 35,024 (622 )
Agency residential 417,521 (4,374 ) 115,934 (2,878 ) 533,455 (7,252 )
Non-agency residential - - - - - -
Foreign government securities 199,311 (4,486 ) 56,732 (3,510 ) 256,043 (7,996 )
Foreign corporate securities 254,015 (4,069 ) 89,121 (6,507 ) 343,136 (10,576 )
Total fixed maturity securities $ 1,676,613 $ (23,890 ) $ 528,713 $ (22,547 ) $ 2,205,326 $ (46,437 )

Duration of Unrealized Loss at September 30, 2017 By Maturity
Less than 12 months Greater than 12 months Total
Gross Gross Gross
Unrealized Unrealized Unrealized
(Dollars in thousands) Market Value Depreciation Market Value Depreciation Market Value Depreciation
Fixed maturity securities
Due in one year or less $ 127,207 $ (514 ) $ 16,129 $ (1,148 ) $ 143,336 $ (1,662 )
Due in one year through five years 741,570 (10,638 ) 246,865 (12,047 ) 988,435 (22,685 )
Due in five years through ten years 220,432 (5,290 ) 76,295 (3,682 ) 296,727 (8,972 )
Due after ten years 108,005 (2,532 ) 67,775 (2,650 ) 175,780 (5,182 )
Asset-backed securities 30,657 (55 ) 1,912 (7 ) 32,569 (62 )
Mortgage-backed securities 448,742 (4,861 ) 119,737 (3,013 ) 568,479 (7,874 )
Total fixed maturity securities $ 1,676,613 $ (23,890 ) $ 528,713 $ (22,547 ) $ 2,205,326 $ (46,437 )

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at September 30, ~~2017~~2020 were ~~$2,205,326~~$1,436,716 thousand and ~~$46,437~~$77,024 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at September 30, ~~2017, (the U.S. Government)~~2020, did not exceed ~~4.6%~~0.1 % of the overall market value of the ~~Company's~~Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The ~~$23,890~~$29,522 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities ~~agency residential mortgage-backed securities~~ and ~~foreign government~~asset backed securities. Of these unrealized losses, ~~$20,072~~$17,083 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency. The ~~$22,547~~$47,502 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, ~~as well as~~ foreign government securities and asset backed securities. Of these unrealized losses ~~$20,240~~$11,390 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency. There was no gross unrealized depreciation for mortgage-backed securities related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

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

	Duration of Unrealized Loss at December 31, 2019 By Security Type
	Less than 12 months				Greater than 12 months				Total
			Gross				Gross				Gross
	Market		Unrealized		Market		Unrealized		Market		Unrealized
(Dollars in thousands)	Value		Depreciation		Value		Depreciation		Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	8,997	$	(141)	$	203,780	$	(846)	$	212,777	$	(987)
Obligations of U.S. states and political subdivisions		4,600		(38)		4,518		(49)		9,118		(87)
Corporate securities		334,973		(5,186)		230,679		(21,252)		565,652		(26,438)
Asset-backed securities		159,695		(887)		76,351		(422)		236,046		(1,309)
Mortgage-backed securities
Commercial		13,083		(87)		16,374		(67)		29,457		(154)
Agency residential		19,019		(82)		17,147		(238)		36,166		(320)
Non-agency residential		-		-		690		-		690		-
Foreign government securities		113,256		(858)		109,953		(6,192)		223,209		(7,050)
Foreign corporate securities		105,551		(1,260)		121,710		(7,879)		227,261		(9,139)
Total fixed maturity securities	$	759,174	$	(8,539)	$	781,202	$	(36,945)	$	1,540,376	$	(45,484)

	Duration of Unrealized Loss at December 31, 2019 By Maturity
	Less than 12 months				Greater than 12 months				Total
			Gross				Gross				Gross
	Market		Unrealized		Market		Unrealized		Market		Unrealized
(Dollars in thousands)	Value		Depreciation		Value		Depreciation		Value		Depreciation
Fixed maturity securities
Due in one year or less	$	34,542	$	(1,067)	$	188,755	$	(6,411)	$	223,297	$	(7,478)
Due in one year through five years		226,521		(2,554)		357,728		(11,562)		584,249		(14,116)
Due in five years through ten years		251,967		(3,292)		43,129		(6,785)		295,096		(10,077)
Due after ten years		54,347		(570)		81,028		(11,460)		135,375		(12,030)
Asset-backed securities		159,695		(887)		76,351		(422)		236,046		(1,309)
Mortgage-backed securities		32,102		(169)		34,211		(305)		66,313		(474)
Total fixed maturity securities	$	759,174	$	(8,539)	$	781,202	$	(36,945)	$	1,540,376	$	(45,484)

Duration of Unrealized Loss at December 31, 2016 By Security Type
Less than 12 months Greater than 12 months Total
Gross Gross Gross
Unrealized Unrealized Unrealized
(Dollars in thousands) Market Value Depreciation Market Value Depreciation Market Value Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 469,571 $ (4,434 ) $ - $ - $ 469,571 $ (4,434 )
Obligations of U.S. states and political subdivisions 221,088 (11,486 ) 564 (484 ) 221,652 (11,970 )
Corporate securities 431,757 (10,121 ) 118,172 (5,665 ) 549,929 (15,786 )
Asset-backed securities 35,065 (122 ) 5,745 (7 ) 40,810 (129 )
Mortgage-backed securities
Commercial 27,230 (391 ) 3,060 (61 ) 30,290 (452 )
Agency residential 487,000 (6,320 ) 90,740 (2,673 ) 577,740 (8,993 )
Non-agency residential - - - - - -
Foreign government securities 218,171 (2,713 ) 61,542 (7,670 ) 279,713 (10,383 )
Foreign corporate securities 264,939 (4,950 ) 75,489 (9,411 ) 340,428 (14,361 )
Total fixed maturity securities $ 2,154,821 $ (40,537 ) $ 355,312 $ (25,971 ) $ 2,510,133 $ (66,508 )

Duration of Unrealized Loss at December 31, 2016 By Maturity
Less than 12 months Greater than 12 months Total
Gross Gross Gross
Unrealized Unrealized Unrealized
(Dollars in thousands) Market Value Depreciation Market Value Depreciation Market Value Depreciation
Fixed maturity securities
Due in one year or less $ 111,926 $ (322 ) $ 21,691 $ (3,625 ) $ 133,617 $ (3,947 )
Due in one year through five years 1,015,066 (10,567 ) 190,960 (16,511 ) 1,206,026 (27,078 )
Due in five years through ten years 243,082 (10,369 ) 41,371 (2,961 ) 284,453 (13,330 )
Due after ten years 235,452 (12,446 ) 1,745 (133 ) 237,197 (12,579 )
Asset-backed securities 35,065 (122 ) 5,745 (7 ) 40,810 (129 )
Mortgage-backed securities 514,230 (6,711 ) 93,800 (2,734 ) 608,030 (9,445 )
Total fixed maturity securities $ 2,154,821 $ (40,537 ) $ 355,312 $ (25,971 ) $ 2,510,133 $ (66,508 )

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, ~~2016~~2019 were ~~$2,510,133~~$1,540,376 thousand and ~~$66,508~~$45,484 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, ~~2016,~~2019, did not exceed ~~1.0%~~0.2 % of the overall market value of the ~~Company's~~Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The ~~$40,537~~$8,539 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of ~~obligations of U.S. states and political subdivisions,~~ domestic and foreign corporate ~~securities, agency residential mortgage-backed securities and foreign government~~ securities. Of these unrealized losses, ~~$36,646~~$5,645 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency. The ~~$25,971~~$36,945 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities and foreign government ~~securities and agency residential mortgage-backed~~ securities. Of these unrealized losses ~~$22,882~~$16,976 thousand ~~is attributable~~were related to ~~net unrealized foreign exchange losses, as the U.S. dollar has strengthened against other currencies.~~securities that were rated investment grade by at least one nationally recognized statistical rating agency. There was no gross unrealized depreciation for mortgage-backed securities related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Fixed maturities	$	78,272	$	68,178	$	227,257	$	200,606
Equity securities		2,504		1,971		6,120		5,721
Short-term investments and cash		410		2,210		2,558		8,115
Other invested assets
Limited partnerships		35,908		15,102		2,439		38,273
Dividends from preferred shares of affiliate		7,758		7,758		23,274		23,274
Other		14,743		7,285		(1,291)		13,564
Gross investment income before adjustments		139,595		102,504		260,358		289,553
Funds held interest income (expense)		957		1,108		5,115		5,434
Interest income from Parent		1,295		-		3,858		-
Gross investment income		141,848		103,612		269,331		294,987
Investment expenses		(6,420)		(8,020)		(24,549)		(24,152)
Net investment income	$	135,428	$	95,592	$	244,782	$	270,835

(Some amounts may not reconcile due to rounding.)

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Fixed maturities $ 48,335 $ 44,810 $ 144,916 $ 134,931
Equity securities 6,267 7,870 19,385 25,752
Short-term investments and cash 648 296 1,628 851
Other invested assets
Limited partnerships 11,878 6,020 20,632 17,698
Dividends from preferred shares of affiliate 7,758 7,758 23,274 23,274
Other 1,484 522 4,232 339
Gross investment income before adjustments 76,370 67,276 214,067 202,845
Funds held interest income (expense) 1,098 1,090 4,015 4,718
Interest income from Parent 1,075 1,075 3,225 3,225
Gross investment income 78,543 69,441 221,307 210,788
Investment expenses (5,126 ) (4,871 ) (15,141 ) (13,901 )
Net investment income $ 73,417 $ 64,570 $ 206,166 $ 196,887

(Some amounts may not reconcile due to rounding.)

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

The Company had contractual commitments to invest up to an additional ~~$348,144~~$1,008,757 thousand in limited partnerships and private placement loans at September 30, ~~2017.~~2020. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through ~~2023.~~

2026.

The ~~Company's other invested assets at September 30, 2017 and December 31, 2016 included $54,718 thousand and $57,126 thousand, respectively, related to~~Company participates in a private placement liquidity sweep ~~facility.~~facility (“the facility”). The primary purpose of the facility is to enhance the ~~Company's~~Company’s return on its short-term investments and cash positions. The facility invests in high quality, short-duration securities and permits daily liquidity. The Company consolidates its participation in the facility. As of September 30, 2020, the market value of investments in the facility consolidated within the Company’s balance sheets was $765,573 thousand.

Other invested assets, at fair value, as of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, were comprised of preferred shares held in Preferred Holdings, an affiliated company.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Fixed maturity securities, market value:
Allowances for credit losses	$	2,289	$	-	$	(17,636)	$	-
Other-than-temporary impairments		-		(6,968)		-		(14,187)
Gains (losses) from sales		(31)		2,200		(19,005)		3,313
Fixed maturity securities, fair value:
Gains (losses) from sales		(1,968)		-		(1,968)		356
Gains (losses) from fair value adjustments		3,339		-		1,944		13
Equity securities, fair value:
Gains (losses) from sales		(281)		(1,192)		(11,609)		2,538
Gains (losses) from fair value adjustments		94,260		(10,326)		120,796		93,349
Other invested assets		1,085		2,097		50		2,341
Other invested assets, fair value:
Gains (losses) from fair value adjustments		15,741		126,655		(180,838)		302,306
Short-term investment gains (losses)		759		76		966		132
Total net realized capital gains (losses)	$	115,193	$	112,542	$	(107,300)	$	390,161

	Roll Forward of Allowance for Credit Losses
	Three Months Ended September 30, 2020								Nine Months Ended September 30, 2020
			Foreign		Foreign						Foreign		Foreign
	Corporate		Government		Corporate				Corporate		Government		Corporate
	Securities		Securities		Securities		Total		Securities		Securities		Securities		Total
Beginning Balance	$	(19,398)	$	-	$	(527)	$	(19,925)	$	-	$	-	$	-	$	-
Credit losses on securities where credit
losses were not previously recorded		(6)		-		-		(6)		(21,829)		(70)		(561)		(22,460)
Increases in allowance on previously
impaired securities		(5,354)		-		-		(5,354)		(5,909)		-		(211)		(6,120)
Decreases in allowance on previously
impaired securities		65		-		128		193		1,303		-		244		1,547
Reduction in allowance due to disposals		7,456		-		-		7,456		9,198		70		129		9,397

Balance as of September 30, 2020	$	(17,237)	$	-	$	(399)	$	(17,636)	$	(17,237)	$	-	$	(399)	$	(17,636)

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Fixed maturity securities, market value:
Other-than-temporary impairments $ (1,473 ) $ (836 ) $ (4,179 ) $ (25,242 )
Gains (losses) from sales 3,842 4,338 16,814 (10,273 )
Fixed maturity securities, fair value:
Gain (losses) from sales - (1 ) - (1,855 )
Gains (losses) from fair value adjustments - 42 - 1,381
Equity securities, fair value:
Gains (losses) from sales (1,479 ) 5,452 3,465 (10,134 )
Gains (losses) from fair value adjustments 29,645 16,063 82,006 34,725
Other invested assets 85 - 84 -
Other invested assets, fair value:
Gains (losses) from fair value adjustments 197,869 (47,090 ) 155,775 (47,846 )
Gain (loss) on sale of subsidiary - (28,032 ) - (28,032 )
Short-term investment gains (losses) - 1 1 1
Total net realized capital gains (losses) $ 228,489 $ (50,063 ) $ 253,966 $ (87,275 )

The Company recorded as net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) ~~both~~ fair value re-measurements, allowances for credit losses per ASU 2016-13 and write-downs in the value of securities deemed to be impaired on an other-than-temporary basis in prior years as displayed in the table above. The Company had no other-than-temporary impaired securities where the impairment had both a credit and non-credit component.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Proceeds from sales of fixed maturity securities	$	84,822	$	213,132	$	422,545	$	2,220,440
Gross gains from sales		4,977		6,638		15,578		17,875
Gross losses from sales		(6,976)		(4,438)		(36,551)		(14,206)

Proceeds from sales of equity securities	$	115,516	$	35,925	$	328,519	$	184,898
Gross gains from sales		9,503		1,035		30,256		9,283
Gross losses from sales		(9,784)		(2,227)		(41,865)		(6,745)

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Proceeds from sales of fixed maturity securities $ 410,636 $ 136,767 $ 1,063,126 $ 435,242
Gross gains from sales 7,931 6,257 23,674 13,875
Gross losses from sales (4,089 ) (1,920 ) (6,860 ) (26,003 )

Proceeds from sales of equity securities $ 52,754 $ 109,914 $ 302,407 $ 531,894
Gross gains from sales 2,199 6,874 13,774 13,509
Gross losses from sales (3,678 ) (1,422 ) (10,309 ) (23,643 )

4. RESERVES FOR LOSSES AND LAE

Activity in the reserve for losses and LAE is summarized for the periods indicated:

	Nine Months Ended September 30,
(Dollars in thousands)		2020		2019
Gross reserves beginning of period	$	10,209,519	$	10,167,018
Less reinsurance recoverables		(4,215,348)		(4,697,543)
Net reserves beginning of period		5,994,171		5,469,475
Incurred related to:
Current year		3,288,049		2,709,367
Prior years		(4,853)		28,044
Total incurred losses and LAE		3,283,196		2,737,411
Paid related to:
Current year		856,707		505,856
Prior years		1,275,408		1,600,956
Total paid losses and LAE		2,132,115		2,106,812

Foreign exchange/translation adjustment and cumulative adjustment due to adoption of ASU 2016-13		(5,954)		(2,720)

Net reserves end of period		7,139,298		6,097,354
Plus reinsurance recoverables		3,902,713		4,314,820
Gross reserves end of period	$	11,042,011	$	10,412,174

(Some amounts may not reconcile due to rounding.)

Nine Months Ended Twelve Months Ended
September 30, At December 31,
(Dollars in thousands) 2017 2016
Gross reserves at beginning of period $ 8,331,288 $ 7,940,720
Less reinsurance recoverables (4,199,791 ) (3,875,073 )
Net reserves at beginning of period 4,131,497 4,065,647

Incurred related to:
Current year 1,918,055 1,441,962
Prior years 453 (91,682 )
Total incurred losses and LAE 1,918,508 1,350,280

Paid related to:
Current year 441,480 400,489
Prior years 547,176 892,207
Total paid losses and LAE 988,656 1,292,696

Foreign exchange/translation adjustment 19,084 8,266

Net reserves at end of period 5,080,433 4,131,497
Plus reinsurance recoverables 4,888,715 4,199,791
Gross reserves at end of period $ 9,969,148 $ 8,331,288

Current year incurred losses were ~~$1,918,055~~$3,288,049 thousand for the nine months ended September 30, 2017 compared to $1,441,962 thousand for the full year 2016. The increase in current year incurred losses was primarily due to $1,039,295 thousand of catastrophe losses incurred in the nine months ended September 30, 2017, mainly related to Hurricane Irma, Hurricane Maria, Hurricane Harvey2020 and ~~the Mexico City earthquake. The $688,924 thousand increase in reinsurance recoverables from December 31, 2016 is primarily due to recoverables from these catastrophe losses.~~

~~Incurred prior years' reserves increased by $453 thousand and decreased by $91,682~~$2,709,367 thousand for the nine months ended September 30, ~~2017 and the year ended December 31, 2016,~~2019, respectively. The ~~decrease for the~~increase in current year ~~ended December 31, 2016~~incurred losses in 2020 compared to 2019 was ~~attributable~~primarily due to ~~favorable development in the reinsurance segments~~$104,831 thousand of ~~$187,909 thousand related primarily~~incurred losses due to ~~property and short-tail business in the U.S., property business in Canada, Latin America, Middle East and Africa,~~COVID-19 as well as ~~favorable development on prior year catastrophe~~

~~losses, partially offset by $45,668 thousand of adverse development on A&E reserves. Part~~the impact of the ~~favorable development~~increase in the reinsurance segment related to the 2015 loss from the explosion at the Chinese port of Tianjin. In 2015, this loss was originally estimated to be $21,566 thousands. At December 31, 2016, this loss was projected to be $6,261 thousands resulting in $15,305 thousands of favorable development in 2016. The net favorable development in the reinsurance segments was partially offset by $96,227 thousand of unfavorable development in the insurance segment primarily related to run-off construction liability and umbrella program business.

6.premiums earned.

5. FAIR VALUE

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

the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:

Level 1:

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

Level 2:

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

Level 3:

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

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

In limited instances where prices are not provided by pricing services or in rare instances when a manager may not agree with the pricing service, price quotes on a non-binding basis are obtained from investment brokers. The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers. In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. In addition, the Company continually performs analytical reviews of price changes and tests the prices on a random basis to an independent pricing source. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. ~~Due to the unavailability of prices for forty-eight private placement securities, the investment manager's valuation committee valued the forty-eight securities at $105,199 thousand at~~At September 30, ~~2017. Due~~2020, $1,063,886 thousand of fixed maturities, market value and $3,748 thousand of fixed maturities, fair value were fair valued using unobservable inputs. The majority of the fixed maturities, market value, $805,061 thousand and all of the $3,748 thousand of fixed maturities, fair value, were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties. The Company has procedures in place to evaluate these independent third party valuations. The remaining Level 3 fixed maturities of $258,825 thousand were fair valued by the ~~unavailability of prices for forty-two private placement securities,~~Company at either par or amortized cost, which the ~~investment manager's valuation committee valued the forty-two securities at $86,536 thousand at~~Company believes approximates fair value. At December 31, ~~2016.~~

2019, $702,331 thousand of fixed maturities, market value and $5,826 thousand of fixed maturities, fair value were fair valued using unobservable inputs. The majority of the fixed maturities, market value, $610,873 thousand and all of the $5,826 thousand of fixed maturities, fair value, were valued by investment managers’ valuation committees and a majority of these fair values were substantiated by valuations from independent third parties. The remaining Level 3 fixed maturities of $91,458 thousand were fair valued by the Company at either par or amortized cost, which the Company believes approximates fair value.

The Company internally manages a public equity portfolio which had a fair value at September 30, ~~2017~~2020 and December 31, ~~2016~~2019 of ~~$218,533~~$591,681 thousand and ~~$133,755~~$170,888 thousand, respectively, and all prices were obtained from ~~publically~~publicly published sources.

Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as ~~level~~Level 1 since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as ~~level~~Level 2 due to the added input of a foreign exchange conversion rate to determine fair or market value. The Company uses foreign currency exchange rates published by nationally recognized sources.

All categories of fixed maturity securities listed in the tables below are generally categorized as ~~level~~Level 2, since a particular security may not have traded but the pricing services are able to use valuation models with

observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. For foreign government securities and foreign corporate securities, the fair values provided by the third party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

The fixed maturities with fair values categorized as ~~level~~Level 3 result when prices are not available from the nationally recognized pricing services. The asset managers will then obtain non-binding price quotes for the securities from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third party asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources. In limited circumstances when broker prices are not available for private placements, the Company will value the securities using comparable market information.

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

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

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

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

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

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

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

19·

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

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

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

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

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

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

Other invested assets, at fair value, ~~was~~were categorized as Level 3 at September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, since it represented a privately placed convertible preferred stock issued by an affiliate. The stock was received in exchange for shares of the ~~Company's~~Company’s parent. The ~~fair value of the~~25 year redeemable, convertible preferred stock ~~at September 30, 2017 and December 31, 2016 was determined~~with a 1.75 % coupon is valued using a pricing model. The pricing model includes observable inputs such as the U.S. Treasury yield curve rate T note constant maturity 10 year and the swap rate on the Company’s June 1, 2044 , 4.868% senior notes, with adjustments to reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset.

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

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	September 30, 2020		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	772,113	$	-	$	772,113	$	-
Obligations of U.S. States and political subdivisions		542,283		-		542,283		-
Corporate securities		3,135,916		-		2,482,521		653,395
Asset-backed securities		1,249,156		-		844,367		404,789
Mortgage-backed securities
Commercial		423,039		-		423,039		-
Agency residential		719,282		-		719,282		-
Non-agency residential		334		-		334		-
Foreign government securities		690,648		-		690,648		-
Foreign corporate securities		1,043,916		-		1,038,214		5,702
Total fixed maturities, market value		8,576,687		-		7,512,801		1,063,886

Fixed maturities, fair value		3,748		-		-		3,748
Equity securities, fair value		1,010,264		946,928		63,336		-
Other invested assets, fair value		1,801,743		-		-		1,801,743

Fair Value Measurement Using:
Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
(Dollars in thousands) September 30, 2017 (Level 1) (Level 2) (Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 655,886 $ - $ 655,886 $ -
Obligations of U.S. States and political subdivisions 671,842 - 671,842 -
Corporate securities 2,239,591 - 2,137,522 102,069
Asset-backed securities 153,789 - 153,789 -
Mortgage-backed securities
Commercial 59,023 - 59,023 -
Agency residential 677,830 - 677,830 -
Non-agency residential 62 - 62 -
Foreign government securities 531,473 - 531,473 -
Foreign corporate securities 1,049,865 - 1,046,734 3,131
Total fixed maturities, market value 6,039,361 - 5,934,161 105,200

Equity securities, fair value 998,071 951,679 46,392 -
Other invested assets, fair value 1,922,402 - - 1,922,402

There were no transfers between Level 1 and Level 2 for the three and nine months ended September 30, ~~2017.~~2020.

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

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	777,515	$	-	$	777,515	$	-
Obligations of U.S. States and political subdivisions		535,911		-		535,911		-
Corporate securities		2,821,557		-		2,274,618		546,939
Asset-backed securities		765,957		-		612,316		153,641
Mortgage-backed securities
Commercial		329,049		-		329,049		-
Agency residential		644,687		-		644,687		-
Non-agency residential		1,638		-		1,638		-
Foreign government securities		658,007		-		658,007		-
Foreign corporate securities		957,758		-		956,007		1,751
Total fixed maturities, market value		7,492,079		-		6,789,748		702,331

Fixed maturities, fair value		5,826		-		-		5,826
Equity securities, fair value		764,049		719,548		44,501		-
Other invested assets, fair value		1,982,582		-		-		1,982,582

Fair Value Measurement Using:
Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
(Dollars in thousands) December 31, 2016 (Level 1) (Level 2) (Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 691,080 $ - $ 691,080 $ -
Obligations of U.S. States and political subdivisions 729,984 - 729,984 -
Corporate securities 2,154,203 - 2,089,006 65,197
Asset-backed securities 137,027 - 137,027 -
Mortgage-backed securities
Commercial 75,493 - 75,493 -
Agency residential 715,144 - 715,144 -
Non-agency residential 88 - 88 -
Foreign government securities 507,277 - 507,277 -
Foreign corporate securities 960,200 - 957,662 2,538
Total fixed maturities, market value 5,970,496 - 5,902,761 67,735

Equity securities, fair value 887,800 827,237 60,563 -
Other invested assets, fair value 1,766,626 - - 1,766,626

In addition, ~~$70,657~~$218,821 thousand and ~~$18,801~~$209,578 thousand of investments within other invested assets on the consolidated balance sheets as of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively, are not included within the fair value hierarchy tables as the assets are ~~valued using the~~measured at NAV as a practical expedient ~~guidance within ASU 2015-07.~~to determine fair value.

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

	Total Fixed Maturities, Market Value
	Three Months Ended September 30, 2020								Nine Months Ended September 30, 2020
	Corporate		Asset		Foreign				Corporate		Asset		Foreign
(Dollars in thousands)	Securities		Backed Securities		Corporate		Total		Securities		Backed Securities		Corporate		Total
Beginning balance	$	651,186	$	295,730	$	6,274	$	953,190	$	546,939	$	153,641	$	1,751	$	702,331
Total gains or (losses) (realized/unrealized)
Included in earnings		361		457		26		844		(101)		582		(71)		410
Included in other comprehensive income (loss)		(992)		5,028		126		4,162		(4,898)		7,238		86		2,426
Purchases, issuances and settlements		(1,349)		103,574		139		102,364		112,061		243,328		3,822		359,211
Transfers in and/or (out) of Level 3		4,189		-		(863)		3,326		(606)		-		114		(492)
Ending balance	$	653,395	$	404,789	$	5,702	$	1,063,886	$	653,395	$	404,789	$	5,702	$	1,063,886
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	-	$	-	$	-	$	-	$	(539)	$	-	$	-	$	(539)

(Some amounts may not reconcile due to rounding.)

	Total Fixed Maturities, Market Value
	Three Months Ended September 30, 2019								Nine Months Ended September 30, 2019
	Corporate		Asset		Foreign				Corporate		Asset		Foreign
(Dollars in thousands)	Securities		Backed Securities		Corporate		Total		Securities		Backed Securities		Corporate		Total
Beginning balance	$	472,229	$	-	$	2,093	$	474,322	$	376,250	$	-	$	7,744	$	383,994
Total gains or (losses) (realized/unrealized)
Included in earnings		1,018		-		-		1,018		3,348		-		(119)		3,229
Included in other comprehensive income (loss)		(1,314)		644		-		(670)		1,130		644		-		1,774
Purchases, issuances and settlements		42,289		40,000		-		82,289		131,975		40,000		(5,532)		166,443
Transfers in and/or (out) of Level 3		3,176		-		-		3,176		4,695		-		-		4,695
Ending balance	$	517,398	$	40,644	$	2,093	$	560,135	$	517,398	$	40,644	$	2,093	$	560,135
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

(Some amounts may not reconcile due to rounding.)

	Total Fixed Maturities, Fair Value
	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Foreign				Foreign
(Dollars in thousands)	Corporate		Total		Corporate		Total
Beginning balance fixed maturities at fair value	$	4,431	$	4,431	$	5,826	$	5,826
Total gains or (losses) (realized/unrealized)
Included in earnings		1,371		1,371		(24)		(24)
Included in other comprehensive income (loss)		-		-		-		-
Purchases, issuances and settlements		(2,054)		(2,054)		(2,054)		(2,054)
Transfers in and/or (out) of Level 3		-		-		-		-
Ending balance	$	3,748	$	3,748	$	3,748	$	3,748
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	-	$	-	$	-	$	-

(Some amounts may not reconcile due to rounding.)

Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
Corporate Foreign Corporate Foreign
(Dollars in thousands) Securities Corporate Total Securities Corporate Total
Beginning balance $ 86,140 $ 3,151 $ 89,291 $ 65,197 $ 2,538 $ 67,735
Total gains or (losses) (realized/unrealized)
Included in earnings 283 210 493 1,208 314 1,522
Included in other comprehensive income (loss) 18 (230 ) (212 ) 161 (230 ) (69 )
Purchases, issuances and settlements 15,628 - 15,628 35,503 509 36,012
Transfers in and/or (out) of Level 3 - - - - - -
Ending balance $ 102,069 $ 3,131 $ 105,200 $ 102,069 $ 3,131 $ 105,200

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

(Some amounts may not reconcile due to rounding.)

	Total Fixed Maturities, Fair Value
	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
	Foreign				Foreign
(Dollars in thousands)	Corporate		Total		Corporate		Total
Beginning balance fixed maturities at fair value	$	-	$	-	$	2,337	$	2,337
Total gains or (losses) (realized/unrealized)
Included in earnings		-		-		369		369
Included in other comprehensive income (loss)		-		-		-		-
Purchases, issuances and settlements		-		-		(2,706)		(2,706)
Transfers in and/or (out) of Level 3		-		-		-		-
Ending balance	$	-	$	-	$	-	$	-
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	-	$	-	$	-	$	-

(Some amounts may not reconcile due to rounding.)

Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
Corporate Foreign Corporate Foreign
(Dollars in thousands) Securities CMBS Corporate Total Securities CMBS Corporate Total
Beginning balance $ 32,410 $ - $ 2,021 $ 34,431 $ 3,933 $ - $ 1,593 $ 5,526
Total gains or (losses) (realized/unrealized)
Included in earnings (12 ) - 27 15 (22 ) - (970 ) (992 )
Included in other comprehensive income (loss) (48 ) (34 ) (1,285 ) (1,367 ) (81 ) (34 ) 140 25
Purchases, issuances and settlements 25,877 (40 ) 2,231 28,068 54,397 (40 ) 2,231 56,588
Transfers in and/or (out) of Level 3 (1,932 ) 3,553 - 1,621 (1,932 ) 3,553 - 1,621
Ending balance $ 56,295 $ 3,479 $ 2,994 $ 62,768 $ 56,295 $ 3,479 $ 2,994 $ 62,768

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

(Some amounts may not reconcile due to rounding.)

The net transfers to/(from) ~~level~~Level 3, fair value measurements using significant unobservable inputs for fixed maturities, market value were $0$3,326 thousand and ~~$1,621~~($492 ) thousand for the three and nine months ended September 30, 2020, respectively, and were $3,176 thousand and $4,695 thousand for the three and nine months ended September 30, 2019, respectively. The transfers of ~~investments for~~$3,326 thousand during the three months ended September 30, 2020 were previously priced by a recognized pricing service and were subsequently priced using investment managers as of September 30, 2020. The transfers of ($492 ) thousand during the nine months ended September 30, ~~2017~~2020 were related to securities that were previously priced using investment managers and ~~2016, respectively.~~were subsequently priced by a recognized pricing service as of September 30, 2020. The ~~$1,621~~transfers of $3,176 thousand and $4,695 thousand during 2019 were related to securities that were previously priced by a recognized pricing service and were subsequently priced using investment managers as of ~~investments~~September 30, 2019.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Equity securities
Balance, beginning of period	$	9,877	$	-	$	-	$	-
Total (gains) or losses (realized/unrealized)
Included in earnings		-		-		-		-
Included in other comprehensive income (loss)		-		-		-		-
Purchases, issuances and settlements		-		-		9,877		-
Transfers in and/or (out) of Level 3		(9,877)		-		(9,877)		-
Balance, end of period	$	-	$	-	$	-	$	-

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

(Some amounts may not reconcile due to rounding.)

The net transfers to/(from) Level 3, fair value measurements using significant unobservable inputs for equity securities, fair value were ($9,877 ) thousand for both the three and nine months ended September 30, ~~2016~~2020. The transfers of ($9,877 ) thousand during both the three and nine months ended September 30, 2020, were related to preferred stock in a private entity purchased during the ~~net impact~~second quarter of ~~securities no longer~~2020 which was priced ~~by a recognized pricing service.~~

at cost as of June 30, 2020 and was subsequently priced based upon the book value of the underlying private entity as of September 30, 2020.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Other invested assets, fair value:
Beginning balance	$	1,786,003	$	1,892,988	$	1,982,582	$	1,717,336
Total gains or (losses) (realized/unrealized)
Included in earnings		15,740		126,655		(180,839)		302,306
Included in other comprehensive income (loss)		-		-		-		-
Purchases, issuances and settlements		-		-		-		-
Transfers in and/or (out) of Level 3		-		-		-		-
Ending balance	$	1,801,743	$	2,019,642	$	1,801,743	$	2,019,642
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	-	$	-	$	-	$	-

(Some amounts may not reconcile due to rounding.)

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Other invested assets, fair value:
Beginning balance $ 1,724,532 $ 1,772,458 $ 1,766,626 $ 1,773,214
Total gains or (losses) (realized/unrealized)
Included in earnings 197,870 (47,090 ) 155,776 (47,846 )
Included in other comprehensive income (loss) - - - -
Purchases, issuances and settlements - - - -
Transfers in and/or (out) of Level 3 - - - -
Ending balance $ 1,922,402 $ 1,725,367 $ 1,922,402 $ 1,725,367

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

(Some amounts may not reconcile due to rounding.)

6. COMMITMENTS AND CONTINGENCIES

by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

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

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

The Prudential or the unaffiliated life insurance company were unable to make payments related to the respective annuity ~~contact.~~

contract.

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

	At September 30, 2020		At December 31, 2019
(Dollars in thousands)	At September 30, 2020		At December 31, 2019
The Prudential	$	141,488	$	141,703
Unaffiliated life insurance company		34,441		35,082

At September 30, At December 31,
(Dollars in thousands) 2017 2016
The Prudential $ 144,331 $ 146,507
Unaffiliated life insurance company 33,769 33,860

7. COMPREHENSIVE INCOME (LOSS)

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

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
(Dollars in thousands)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related temporary	$	48,819		(10,247)	$	38,572	$	132,405		(27,807)	$	104,598
URA(D) on securities - non-credit related OTTI		-		-		-		-		-		-
Reclassification of net realized losses (gains) included in net income (loss)		(3,343)		738		(2,605)		36,591		(7,767)		28,824
Foreign currency translation adjustments		18,239		(3,825)		14,414		(8,618)		1,835		(6,783)
Reclassification of amortization of net gain (loss) included in net income (loss)		2,285		(480)		1,806		5,736		(1,205)		4,532
Total other comprehensive income (loss)	$	66,000	$	(13,814)	$	52,187	$	166,114	$	(34,944)	$	131,171

(Some amounts may not reconcile due to rounding)

Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
(Dollars in thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary $ 852 $ (219 ) $ 633 $ 24,656 $ (8,279 ) $ 16,377
URA(D) on securities - OTTI (158 ) 55 (103 ) (3,974 ) 1,391 (2,583 )
Reclassification of net realized losses (gains) included in net income (loss) (2,454 ) 780 (1,674 ) (12,719 ) 4,101 (8,618 )
Foreign currency translation adjustments 52,740 (18,459 ) 34,281 66,492 (23,272 ) 43,220
Benefit plan actuarial net gain (loss) - - - - - -
Reclassification of amortization of net gain (loss) included in net income (loss) 2,107 (738 ) 1,369 8,273 (2,896 ) 5,377
Total other comprehensive income (loss) $ 53,088 $ (18,581 ) $ 34,507 $ 82,729 $ (28,955 ) $ 53,774

(Some amounts may not reconcile due to rounding)

Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
(Dollars in thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary $ 8,305 $ (2,909 ) $ 5,396 $ 92,221 $ (32,279 ) $ 59,942
URA(D) on securities - OTTI (2,444 ) 856 (1,588 ) 4,199 (1,469 ) 2,730
Reclassification of net realized losses (gains) included in net income (loss) (4,258 ) 1,491 (2,767 ) 35,515 (12,430 ) 23,085
Foreign currency translation adjustments (4,066 ) 1,424 (2,642 ) 42,741 (14,962 ) 27,779
Benefit plan actuarial net gain (loss) - - - - - -
Reclassification of amortization of net gain (loss) included in net income (loss) 1,951 (683 ) 1,268 6,076 (2,127 ) 3,949
Total other comprehensive income (loss) $ (512 ) $ 179 $ (333 ) $ 180,752 $ (63,267 ) $ 117,485

(Some amounts may not reconcile due to rounding)

	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
(Dollars in thousands)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary	$	30,803	$	(6,443)	$	24,360	$	229,768	$	(48,311)	$	181,457
URA(D) on securities - OTTI		119		(25)		94		(581)		122		(459)
Reclassification of net realized losses (gains) included in net income (loss)		2,671		(586)		2,085		8,533		(1,606)		6,927
Foreign currency translation adjustments		3,641		(760)		2,881		6,286		(1,316)		4,970
Reclassification of amortization of net gain (loss) included in net income (loss)		1,726		(362)		1,364		4,640		(974)		3,666
Total other comprehensive income (loss)	$	38,960	$	(8,176)	$	30,784	$	248,646	$	(52,085)	$	196,561

(Some amounts may not reconcile due to rounding)

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

	Three Months Ended				Nine Months Ended				Affected line item within the
	September 30,				September 30,				statements of operations and
AOCI component	2020		2019		2020		2019		comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities	$	(3,343)	$	2,671	$	36,591	$	8,533	Other net realized capital gains (losses)
		738		(586)		(7,767)		(1,606)	Income tax expense (benefit)
	$	(2,605)	$	2,085	$	28,824	$	6,927	Net income (loss)
Benefit plan net gain (loss)	$	2,285	$	1,726	$	5,736	$	4,640	Other underwriting expenses
		(480)		(362)		(1,205)		(974)	Income tax expense (benefit)
	$	1,806	$	1,364	$	4,532	$	3,666	Net income (loss)

(Some amounts may not reconcile due to rounding)

Three Months Ended Nine Months Ended
September 30, September 30, Affected line item within the statements of
AOCI component 2017 2016 2017 2016 operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities $ (2,454 ) $ (4,258 ) $ (12,719 ) $ 35,515 Other net realized capital gains (losses)
780 1,491 4,101 (12,430 ) Income tax expense (benefit)
$ (1,674 ) $ (2,767 ) $ (8,618 ) $ 23,085 Net income (loss)

Benefit plan net gain (loss) $ 2,107 $ 1,951 $ 8,273 $ 6,076 Other underwriting expenses
(738 ) (683 ) (2,896 ) (2,127 ) Income tax expense (benefit)
$ 1,369 $ 1,268 $ 5,377 $ 3,949 Net income (loss)

(Some amounts may not reconcile due to rounding)

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Beginning balance of URA (D) on securities	$	222,068	$	105,436	$	124,612	$	(55,950)
Current period change in URA (D) of investments - non-credit related		35,967		26,446		133,422		188,385
Current period change in URA (D) of investments - non-credit OTTI		-		94		-		(459)
Ending balance of URA (D) on securities		258,034		131,976		258,034		131,976

Beginning balance of foreign currency translation adjustments		(6,931)		(797)		14,267		(2,886)
Current period change in foreign currency translation adjustments		14,414		2,880		(6,783)		4,969
Ending balance of foreign currency translation adjustments		7,483		2,083		7,483		2,083

Beginning balance of benefit plan net gain (loss)		(71,829)		(65,116)		(74,556)		(67,418)
Current period change in benefit plan net gain (loss)		1,806		1,364		4,532		3,666
Ending balance of benefit plan net gain (loss)		(70,023)		(63,752)		(70,023)		(63,752)

Ending balance of accumulated other comprehensive income (loss)	$	195,495	$	70,307	$	195,495	$	70,307

Nine Months Ended Twelve Months Ended
September 30, December 31,
(Dollars in thousands) 2017 2016

Beginning balance of URA (D) on securities $ 39,041 $ 13,654
Current period change in URA (D) of investments - temporary 7,759 22,063
Current period change in URA (D) of investments - non-credit OTTI (2,583 ) 3,324
Ending balance of URA (D) on securities 44,218 39,041

Beginning balance of foreign currency translation adjustments (9,852 ) (12,701 )
Current period change in foreign currency translation adjustments 43,220 2,849
Ending balance of foreign currency translation adjustments 33,368 (9,852 )

Beginning balance of benefit plan net gain (loss) (65,504 ) (63,089 )
Current period change in benefit plan net gain (loss) 5,377 (2,415 )
Ending balance of benefit plan net gain (loss) (60,127 ) (65,504 )

Ending balance of accumulated other comprehensive income (loss) $ 17,459 $ (36,315 )

8. COLLATERALIZED REINSURANCE AND TRUST AGREEMENTS

A subsidiary of the Company, Everest Re, has established a trust agreement, which effectively uses Everest ~~Re's~~Re’s investments as collateral, as security for assumed losses payable to a non-affiliated ceding ~~company.~~companies. At September 30, ~~2017,~~2020, the total amount on deposit in the trust account was ~~$659,548~~$849,953 thousand.

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

These reinsurance agreements expired in April 2018.

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

These reinsurance agreements expired in November, 2019.

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

On April 13, 2017, the Company entered into six collateralized reinsurance agreements with Kilimanjaro to provide the Company with annual aggregate catastrophe reinsurance coverage. The initial three agreements are four year reinsurance contracts which cover named storm and earthquake events. These agreements provide up to $225,000 thousand, $400,000 thousand and $325,000 thousand, respectively, of annual aggregate reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico and Canada. The subsequent three agreements are five year reinsurance contracts which cover named storm and earthquake events. These agreements provide up to $50,000 thousand, $75,000 thousand and $175,000 thousand, respectively, of annual aggregate reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico and Canada.

On April 30, 2018, the Company entered into four collateralized reinsurance agreements with Kilimanjaro to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The first two agreements are four year reinsurance contracts which provide up to $62,500 thousand and $200,000 thousand, respectively, of annual aggregate reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico, the U.S. Virgin Islands and Canada. The remaining two agreements are five year reinsurance contracts which provide up to $62,500 thousand and $200,000 thousand, respectively, of annual aggregate reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico, the U.S. Virgin Islands and Canada.

On December 12, 2019, the Company entered into four collateralized reinsurance agreements with Kilimanjaro to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The first two agreements are four year reinsurance contracts which provide up to $150,000 thousand and $275,000 thousand, respectively, of annual aggregate reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico, the U.S. Virgin Islands and Canada. The remaining two agreements are five year reinsurance contracts which provide up to $150,000 thousand and $275,000 thousand, respectively, of annual aggregate

reinsurance coverage from named storms and earthquakes in the United State, Puerto Rico, the U.S. Virgin Islands and Canada.

Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry level insured losses from covered events, as well as, the geographic location of the events. The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses. ~~As of September 30, 2017,~~Currently, none of the published insured loss estimates for ~~the 2017~~ catastrophe events during the applicable covered periods of the various agreements have exceeded the single event retentions or aggregate retentions under the terms of the agreements that would result in a recovery. In addition, the aggregation of the to date published insured loss estimates for the 2017 covered events have not exceeded the aggregated retentions for recovery. However, if the published estimates for insured losses for the covered 2017 events increase or if there are additional covered events during the remainder of 2017, the aggregate losses may exceed the aggregate event retentions under the agreements, resulting in a recovery.

Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors. On April 24, 2014, Kilimanjaro issued $450,000 thousand of notes ("(“Series 2014-1 ~~Notes"~~Notes”). The $450,000 thousand of Series 2014-1 Notes were fully redeemed on April 30, 2018 and are no longer outstanding. On November 18, 2014, Kilimanjaro issued $500,000 thousand of notes ("(“Series 2014-2 ~~Notes"~~Notes”). The $500,000 thousand of Series 2014-2 Notes were fully redeemed in November 2019 and are no longer outstanding. On December 1, 2015, Kilimanjaro issued $625,000 thousand of notes ("(“Series 2015-1 Notes). On April 13, 2017, Kilimanjaro issued $950,000 thousand of notes ("(“Series 2017-1 Notes) and $300,000 thousand of notes ("(“Series 2017-2 Notes). On April 30, 2018, Kilimanjaro issued $262,500 thousand of notes (“Series 2018-1 Notes”) and $262,500 thousand of notes (“Series 2018-2 Notes”). On December 12, 2019 Kilimanjaro issued $425,000 thousand of notes (“Series 2019-1 Notes”) and $425,000 thousand of notes (“Series 2019-2 Notes’”). The proceeds from the issuance of the Notes listed above are held in reinsurance trust throughout the duration of the applicable reinsurance agreements and invested solely in US government money market funds with a rating of at least ~~"AAAm"~~“AAAm” by Standard & ~~Poor's.~~

~~10.~~Poor’s.

9. SENIOR NOTES

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

September 30, 2020

December 31, 2019

Consolidated

Principal

Balance Sheet

Market

Balance Sheet

Market

(Dollars in thousands)

Date Issued

Date Due

Amounts

Amount

Value

Amount

Value

Senior notes

06/05/2014

06/01/2044

400,000

397,164

460,252

397,074

452,848

September 30, 2017 December 31, 2016
Consolidated Balance Consolidated Balance
(Dollars in thousands) Date Issued Date Due Principal Amounts Sheet Amount Market Value Sheet Amount Market Value
4.868% Senior notes 06/05/2014 06/01/2044 400,000 $ 396,804 $ 420,008 $ 396,714 $ 383,612

On June 5, 2014 , Holdings issued $400,000 thousand of 30 year senior notes at ~~4.868%~~4.868 %, which will mature on June 1, ~~2044.~~2044. Interest will be paid semi-annually on June 1 and December 1 of each year.

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

	Three Months Ended				NIne Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Interest expense incurred	$	4,868	$	4,868	$	14,604	$	14,604

In addition to the above senior notes outstanding, Holdings issued $1,000,000 thousand of 30 year senior notes on October 7, 2020 at an interest rate of 3.5 %. These senior notes will mature on October 15, 2050 and will pay interest semi-annually on April 15th and October 15th of each year.

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Interest expense incurred $ 4,868 $ 4,868 $ 14,604 $ 14,604

~~11.~~

10. LONG TERM SUBORDINATED NOTES

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

September 30, 2020

December 31, 2019

Original

Consolidated

Principal

Maturity Date

Balance

Market

Balance

Market

(Dollars in thousands)

Date Issued

Amount

Scheduled

Final

Sheet Amount

Value

Sheet Amount

Value

Long term subordinated notes

04/26/2007

400,000

05/15/2037

05/01/2067

223,649

191,301

236,758

233,191

Maturity Date September 30, 2017 December 31, 2016
Original Consolidated Balance Consolidated Balance
(Dollars in thousands) Date Issued Principal Amount Scheduled Final Sheet Amount Market Value Sheet Amount Market Value
6.6% Long term subordinated notes 04/26/2007 $ 400,000 05/15/2037 05/01/2067 $ 236,536 $ 221,380 $ 236,462 $ 204,636

During the fixed rate interest period from May 3, 2007 through May 14, 2017 , interest was at the annual rate of ~~6.6%~~6.6 %, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007. During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to ~~Holdings'~~Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including ~~August~~May 15, 2017. The reset quarterly interest rate for ~~November 15, 2017~~August 17, 2020 to November 15, ~~2017~~2020 is ~~3.70%~~2.67%.

Holdings may redeem the long term subordinated notes on or after May 15, 2017 , in whole or in part at ~~100%~~100 % of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes. Effective upon the maturity of the ~~Company's 5.40%~~Company’s 5.40 % senior notes on October 15, 2014 , the ~~Company's 4.868%~~Company’s 4.868 % senior notes, due on June 1, 2044, have become the ~~Company's~~Company’s long term indebtedness that ranks senior to the long term subordinated notes.

The Company repurchased and retired $0 thousand and $13,183 thousand of its outstanding long term subordinated notes during the three and nine months ended September 30, 2020, respectively. The Company realized a gain of $0 thousand and $2,536 thousand from the repurchase of the long term subordinated notes during the three and nine months ended September 30, 2020, respectively.

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

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

	Three Months Ended				NIne Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Interest expense incurred	$	1,587	$	2,881	$	6,126	$	8,892

11. FEDERAL HOME LOAN BANK MEMBERSHIP

Effective August 15, 2019, Everest Reinsurance Company (“Everest Re”) became a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10 % of its statutory admitted assets. As of September 30, 2020, Everest Re had admitted assets of approximately $14,667,099 thousand which provides borrowing capacity of up to approximately $1,466,709 thousand.

On August 31, 2020, Everest Re borrowed $90,000 thousand under its FHLBNY available capacity. The $90,000 thousand collateralized borrowing has interest payable at a rate of 0.35% and will mature on

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Interest expense incurred $ 2,240 $ 3,937 $ 9,210 $ 11,811

November 30, 2020. The FHLBNY membership agreement requires that 4.5% of borrowed funds be used to acquire additional membership stock.

12. LEASES

Effective January 1, 2019, the Company adopted ASU 2016-02 and ASU 2018-11 which outline new guidance on the accounting for leases. The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Most leases include an option to extend or renew the lease term. The exercise of the renewal is at the Company’s discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercise those options. The Company, in determining the present value of lease payments utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with terms of the underlying lease.

Supplemental information related to operating leases is as follows for the periods indicated:

~~12.~~

	Three Months Ended				Nine Months Ended
(Dollars in thousands)	September 30,				September 30,
	2020		2019		2020		2019
Lease expense incurred:
Operating lease cost	$	7,591	$	4,791	$	22,263	$	14,146

(Dollars in thousands)	At September 30, 2020		At December 31, 2019
Operating lease right of use assets	$	139,972	$	152,978
Operating lease liabilities		153,322		160,387

	Three Months Ended				Nine Months Ended
(Dollars in thousands)	September 30,				September 30,
	2020		2019		2020		2019
Operating cash flows from operating leases	$	(4,538)	$	(4,297)	$	(13,396)	$	(12,914)

	At September 30, 2020			At December 31, 2019
Weighted average remaining operating lease term	12.6 years		12.8 years
Weighted average discount rate on operating leases	4.03	%	3.91		%

Maturities of the existing lease liabilities are expected to occur as follows:

(Dollars in thousands)
Remainder of 2020	$	4,582
2021		16,181
2022		18,615
2023		18,202
2024		18,208
2025		15,217
Thereafter		116,149
Undiscounted lease payments		207,154
Less: present value adjustment		53,832
Total operating lease liability	$	153,322

On July 2, 2019, the Company entered into a lease agreement to relocate its corporate offices from Liberty Corner, New Jersey to a corporate complex in Warren, New Jersey. The new lease, which covers approximately 315,000 square feet of office space, was effective October 1, 2019 and runs through 2036 . The initial base rent payment of the lease will be approximately $650 thousand per month or $7,800 thousand per year. The

Company expects to relocate the existing operations and employees of the Liberty Corner, New Jersey facility to the new corporate complex during 2021.

13. SEGMENT REPORTING

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

United States.

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

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

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

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

	Three Months Ended				Nine Months Ended
Reinsurance	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	1,473,266	$	1,297,228	$	3,906,355	$	3,464,773
Net written premiums		1,296,107		1,141,437		3,403,090		2,955,349

Premiums earned	$	1,153,740	$	996,545	$	3,223,608	$	2,852,045
Incurred losses and LAE		936,904		800,711		2,250,270		1,935,706
Commission and brokerage		265,095		297,499		818,282		793,027
Other underwriting expenses		35,697		30,406		92,143		79,822
Underwriting gain (loss)	$	(83,956)	$	(132,071)	$	62,913	$	43,490

	Three Months Ended				Nine Months Ended
Insurance	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	591,695	$	592,775	$	1,971,818	$	1,798,149
Net written premiums		429,594		428,518		1,462,869		1,326,714

Premiums earned	$	461,717	$	431,855	$	1,424,814	$	1,222,432
Incurred losses and LAE		340,947		297,382		1,032,926		801,705
Commission and brokerage		57,309		60,182		182,925		169,647
Other underwriting expenses		73,669		65,287		212,562		177,604
Underwriting gain (loss)	$	(10,208)	$	9,004	$	(3,599)	$	73,476

Three Months Ended Nine Months Ended
U.S. Reinsurance
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Gross written premiums $ 908,346 $ 654,770 $ 1,962,297 $ 1,597,006
Net written premiums 295,645 327,242 649,883 711,700

Premiums earned $ 242,350 $ 249,203 $ 652,953 $ 709,064
Incurred losses and LAE 678,926 137,245 919,107 363,567
Commission and brokerage 31,698 48,107 115,243 147,968
Other underwriting expenses 12,094 14,265 40,623 39,856
Underwriting gain (loss) $ (480,368 ) $ 49,586 $ (422,020 ) $ 157,673

Three Months Ended Nine Months Ended
International
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Gross written premiums $ 363,186 $ 353,195 $ 975,296 $ 939,851
Net written premiums 130,180 141,295 345,387 353,449

Premiums earned $ 123,915 $ 128,358 $ 355,366 $ 372,816
Incurred losses and LAE 410,543 41,830 557,416 206,672
Commission and brokerage 25,101 30,193 72,426 82,443
Other underwriting expenses 8,241 9,219 26,293 25,011
Underwriting gain (loss) $ (319,970 ) $ 47,116 $ (300,769 ) $ 58,690

Three Months Ended Nine Months Ended
Insurance
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Gross written premiums $ 429,593 $ 497,958 $ 1,351,491 $ 1,276,761
Net written premiums 144,935 154,079 442,237 462,791

Premiums earned $ 152,242 $ 179,092 $ 449,440 $ 445,553
Incurred losses and LAE 242,089 122,528 441,985 365,962
Commission and brokerage (22,254 ) 4,478 (40,104 ) (10,859 )
Other underwriting expenses 37,378 40,665 114,889 116,839
Underwriting gain (loss) $ (104,971 ) $ 11,421 $ (67,330 ) $ (26,389 )

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Underwriting gain (loss)	$	(94,164)	$	(123,067)	$	59,314	$	116,966
Net investment income		135,428		95,592		244,782		270,835
Net realized capital gains (losses)		115,193		112,542		(107,300)		390,161
Corporate expense		(4,206)		(3,183)		(11,441)		(7,353)
Interest, fee and bond issue cost amortization expense		(6,535)		(7,802)		(20,917)		(27,314)
Other income (expense)		(1,790)		(2,673)		(11,410)		(8,459)
Income (loss) before taxes	$	143,926	$	71,409	$	153,028	$	734,836

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Underwriting gain (loss) $ (905,309 ) $ 108,123 $ (790,119 ) $ 189,974
Net investment income 73,417 64,570 206,166 196,887
Net realized capital gains (losses) 228,489 (50,063 ) 253,966 (87,275 )
Corporate expense (1,132 ) (1,835 ) (6,241 ) (6,181 )
Interest, fee and bond issue cost amortization expense (7,161 ) (8,859 ) (23,974 ) (26,576 )
Other income (expense) 1,486 (13,208 ) 21,996 (10,806 )
Income (loss) before taxes $ (610,210 ) $ 98,728 $ (338,206 ) $ 256,023

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Canada gross written premiums	$	65,785	$	52,136	$	200,443	$	138,392

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Canada gross written premiums $ 30,625 $ 35,856 $ 94,777 $ 94,072

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

~~13.~~

14. RELATED-PARTY TRANSACTIONS

Parent

Group entered into a $300,000 thousand long term note agreement with Everest Re as of December 17, 2019. The note will pay interest annually at a rate of 1.69 % and is scheduled to mature in December, 2028. This transaction is presented as a Note Receivable – Affiliated in the Consolidated Balance Sheet of Holdings. The Company recognized interest income related to this long term note of $1,296 thousand and $0 thousand for the three months ended September 30, 2020 and 2019, respectively and $3,859 thousand and $0 thousand for the nine months ended September 30, 2020 and 2019, respectively.

Group entered into a $250,000 thousand long term promissory note agreement with Holdings as of December 31, 2014. The note ~~will mature on~~was repaid in December 31, 2023 and has an interest rate of 1.72% that is payable annually. This transaction is presented as a Note Receivable – Affiliated in the Consolidated Balance Sheets of Holdings. Interest income in the amount of $3,225 thousand and $3,225 thousand was recorded by Holdings for the nine months ended September 2018.

30 ~~2017, and September 30, 2016, respectively.~~

~~Group's~~

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

		Common ~~Shares~~
		~~Authorized for~~ Shares
~~Amendment Date~~		~~Repurchase~~ Authorized for
Amendment Date		Repurchase
(Dollars in thousands)
09/21/2004		5,000,000
~~09/~~ 07/21/~~2004~~2008		5,000,000
~~07/21/2008~~ 02/24/2010		5,000,000
02/~~24/2010~~22/2012		5,000,000
~~02/22/2012~~ 05/15/2013		5,000,000
~~05/15/2013~~ 11/19/2014		5,000,000
~~11/19/2014~~ 05/22/2020		~~5,000,000~~ 2,000,000
		~~30,000,000~~ 32,000,000

Holdings had purchased and held 9,719,971 Common Shares of Group, which were purchased in the open market between February 2007 and March 2011.

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

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Dividends received on preferred stock of affiliate	$	7,758	$	7,758	$	23,274	$	23,274

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Dividends received on preferred stock of affiliate $ 7,758 $ 7,758 $ 23,274 $ 23,274

Affiliated Companies

~~Everest~~

Effective December 31, 2018, Holdings entered into a $300,000 thousand long-term promissory note agreement with Bermuda Re. The note was repaid in May, 2019. Interest expense of $0 thousand and $3,658 thousand was recorded by Holdings for the three and nine months ended September 30, 2019, respectively.

Effective October 1, 2018, Holdings Ireland made a capital contribution of Global Services, ~~Inc. ("~~an affiliated entity, to Holdings. Global ~~Services"),~~Services had an ~~affiliate~~equity value of ~~Holdings, provides centralized management~~$227,253 thousand at the time of contribution and ~~home office services, through a management agreement, to Holdings and other affiliated companies within Holdings'~~that value is classified as additional paid in capital in the Company’s consolidated ~~structure. Services provided by Everest Global include executive managerial services, legal services, actuarial services, accounting services, information technology services and others.~~balance sheets.

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

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Expenses incurred $ 25,465 $ 21,242 $ 71,694 $ 62,701

29Affiliates

~~Affiliates~~

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

(Dollars in thousands)
						Single
		Percent		Assuming		Occurrence		Aggregate
Coverage Period	Ceding Company	Ceded		Company	Type of Business	Limit		Limit
01/01/2010-12/31/2010	Everest Re	44.0	%	Bermuda Re	property / casualty business	150,000		325,000
01/01/2011-12/31/2011	Everest Re	50.0	%	Bermuda Re	property / casualty business	150,000		300,000
01/01/2012-12/31/2014	Everest Re	50.0	%	Bermuda Re	property / casualty business	100,000		200,000
01/01/2015-12/31/2016	Everest Re	50.0	%	Bermuda Re	property / casualty business	162,500		325,000
01/01/2017-12/31/2017	Everest Re	60.0	%	Bermuda Re	property / casualty business	219,000		438,000
01/01/2010-12/31/2010	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350,000	⁽¹⁾	-
01/01/2011-12/31/2011	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350,000	⁽¹⁾	-
01/01/2012-12/31/2012	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	206,250	⁽¹⁾	412,500	⁽¹⁾
01/01/2013-12/31/2013	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	150,000	⁽¹⁾	412,500	⁽¹⁾
01/01/2014-12/31/2017	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	262,500	⁽¹⁾	412,500	⁽¹⁾
01/01/2012-12/31/2017	Everest Canada	80.0	%	Everest Re- Canadian Branch	property business	-		-

(1) Amounts shown are Canadian dollars.

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

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

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

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

01/01/2015-12/31/2016 Everest Re 50.0% Bermuda Re property / casualty business 162,500 325,000

01/01/2017 Everest Re 60.0% Bermuda Re property / casualty business 219,000 438,000

01/01/2010-12/31/2010 Everest Re- Canadian Branch 60.0% Bermuda Re property business 350,000
⁽¹⁾
-
01/01/2011-12/31/2011 Everest Re- Canadian Branch 60.0% Bermuda Re property business 350,000
⁽¹⁾
-
01/01/2012-12/31/2012 Everest Re- Canadian Branch 75.0% Bermuda Re property / casualty business 206,250
⁽¹⁾
412,500
⁽¹⁾
01/01/2013-12/31/2013 Everest Re- Canadian Branch 75.0% Bermuda Re property / casualty business 150,000
⁽¹⁾
412,500
⁽¹⁾
01/01/2014 Everest Re- Canadian Branch 75.0% Bermuda Re property / casualty business 262,500
⁽¹⁾
412,500
⁽¹⁾

01/01/2012 Everest Canada 80.0% Everest Re- Canadian Branch property business - -

⁽¹⁾Amounts shown are Canadian dollars.

Effective January 1, 2018, Everest Re entered into a twelve month whole account aggregate stop loss reinsurance contract (“stop loss agreement”) with Bermuda Re. The stop loss agreement provides coverage for ultimate net losses on applicable net earned premiums above a retention level, subject to certain other coverage limits and conditions. The stop loss agreement was most recently renewed effective January 1, 2020.

In addition, Everest Re entered into a property catastrophe excess of loss reinsurance contract with Bermuda Re, effective January 1, 2019. The contract provides $100,000 thousand of reinsurance coverage for property catastrophe losses above certain attachment points. This agreement expired on December 31, 2019 and was not renewed.

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

(Dollars in thousands)
Effective	Transferring	Assuming		% of Business or		Covered Period
Date	Company	Company		Amount of Transfer		of Transfer
10/01/2001	Everest Re (Belgium Branch)	Bermuda Re		100	%	All years
10/01/2008	Everest Re	Bermuda Re	$	747,022		01/01/2002-12/31/2007
12/31/2017	Everest Re	Bermuda Re	$	970,000		All years

Effective Transferring Assuming % of Business or Covered Period
Date Company Company Amount of Transfer of Transfer

09/19/2000 Mt. McKinley Bermuda Re 100 % All years
10/01/2001 Everest Re (Belgium Branch) Bermuda Re 100 % All years
10/01/2008 Everest Re Bermuda Re $ 747,022 01/01/2002-12/31/2007

On ~~July 13, 2015,~~December 31, 2017, the Company ~~sold Mt. McKinley~~entered into a LPT agreement with Bermuda Re. The LPT agreement covers subject loss reserves of $2,336,242 thousand for accident years 2017 and prior. As a result of the LPT agreement, the Company transferred $1,000,000 thousand of cash and fixed maturity securities and transferred $970,000 thousand of loss reserves to ~~Clearwater Insurance Company, a Delaware domiciled insurance company.~~Bermuda Re. As part of ~~that date, Mt. McKinley is no longer deemed~~the LPT agreement, Bermuda Re will provide an ~~affiliated company or related party.~~additional $500,000 thousand of adverse development coverage on the subject loss reserves.

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

	Three Months Ended				Nine Months Ended
Bermuda Re	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Ceded written premiums	$	32,224	$	14,660	$	94,393	$	85,667
Ceded earned premiums		32,273		16,510		94,587		85,632
Ceded losses and LAE		12,573		(16,836)		2,622		(8,521)

	Three Months Ended				Nine Months Ended
Everest International	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Ceded written premiums	$	-	$	-	$	-	$	-
Ceded earned premiums		-		-		-		-
Ceded losses and LAE		-		10		16		(26)

Three Months Ended Nine Months Ended
Bermuda Re
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Ceded written premiums $ 911,866 $ 685,798 $ 2,228,538 $ 1,746,976
Ceded earned premiums 796,194 585,993 2,005,965 1,718,295
Ceded losses and LAE (a) 650,460 344,789 1,379,164 1,039,932

	Three Months Ended				Nine Months Ended
Everest Canada	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Assumed written premiums	$	-	$	-	$	1	$	-
Assumed earned premiums		-		-		(7)		-
Assumed losses and LAE		(1,709)		(1,633)		(1,059)		(938)

Three Months Ended Nine Months Ended
Everest International
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Ceded written premiums $ 21 $ (5 ) $ (4 ) $ 26
Ceded earned premiums 38 (3 ) 13 36
Ceded losses and LAE (13 ) 479 (631 ) 1,377

	Three Months Ended				Nine Months Ended
Lloyd's Syndicate 2786	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Assumed written premiums	$	(1,743)	$	24	$	(4,144)	$	(8,702)
Assumed earned premiums		(1,743)		850		(3,926)		(16,380)
Assumed losses and LAE		293		1,141		(331)		(2,386)

Three Months Ended Nine Months Ended
Everest Canada
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Assumed written premiums $ 13,028 $ 12,667 $ 39,008 $ 39,094
Assumed earned premiums 13,464 11,611 38,201 34,740
Assumed losses and LAE 7,448 13,287 21,418 34,714

Three Months Ended Nine Months Ended
Lloyd's Syndicate 2786
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Assumed written premiums $ 15,984 $ 351 $ 34,069 $ 890
Assumed earned premiums 15,042 173 31,766 289
Assumed losses and LAE 7,893 - 16,157 -

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

~~Effective February 27,~~

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

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

	Three Months Ended				Nine Months Ended
Mt. Logan Re Segregated Accounts	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Ceded written premiums	$	74,215	$	79,152	$	211,429	$	193,664
Ceded earned premiums		62,543		69,942		202,810		176,576
Ceded losses and LAE		68,879		81,136		143,179		145,918
Assumed written premiums		-		-		-		-
Assumed earned premiums		-		-		-		-
Assumed losses and LAE		-		-		-		-

Three Months Ended Nine Months Ended
Mt. Logan Re Segregated Accounts
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Ceded written premiums $ 54,057 $ 57,911 $ 131,939 $ 128,292
Ceded earned premiums 46,696 44,548 131,361 118,776
Ceded losses and LAE 180,540 7,420 223,973 32,750

Assumed written premiums $ 2,587 $ 5,032 $ 9,082 $ 11,666
Assumed earned premiums 2,587 5,032 9,082 11,666
Assumed losses and LAE - - - -

~~14.~~15. RETIREMENT BENEFITS

The Company maintains both qualified and non-qualified defined benefit pension plans ~~and a retiree health plan~~ for its U.S. employees employed prior to April 1, 2010. Generally, the Company computes the benefits based on average earnings over a period prescribed by the plans and credited length of service. The Company’s non-qualified defined benefit pension plan provided compensating pension benefits for participants whose benefits have been

curtailed under the qualified plan due to Internal Revenue Code limitations. Effective January 1, 2018, participants of the Company’s non-qualified defined benefit pension plan may no longer accrue additional service benefits.

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

Pension Benefits	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Service cost	$	2,040	$	2,064	$	8,092	$	6,616
Interest cost		2,562		2,928		7,608		8,788
Expected return on plan assets		(5,197)		(4,492)		(15,591)		(14,523)
Amortization of net (income) loss		2,462		1,909		6,137		5,111
Settlement charge		871		102		871		309
Net periodic benefit cost	$	2,738	$	2,511	$	7,117	$	6,301

Other Benefits	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Service cost	$	311	$	245	$	763	$	818
Interest cost		215		245		644		835
Amortization of prior service cost		(177)		(144)		(401)		(433)
Amortization of net (income) loss		-		(39)		-		(39)
Net periodic benefit cost	$	349	$	307	$	1,006	$	1,181

(Some amounts may not reconcile due to rounding.)

Pension Benefits
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Service cost $ 2,737 $ 2,731 $ 9,335 $ 8,524
Interest cost 2,509 2,371 7,060 7,093
Expected return on plan assets (3,263 ) (2,789 ) (9,572 ) (7,757 )
Amortization of net (income) loss 2,091 1,984 8,172 6,012
Net periodic benefit cost $ 4,074 $ 4,297 $ 14,995 $ 13,872

Other Benefits
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2017 2016 2017 2016
Service cost $ 392 $ 354 $ 1,273 $ 1,230
Interest cost 295 252 793 844
Amortization of prior service cost (33 ) (33 ) (98 ) (33 )
Amortization of net (income) loss 48 - 199 96
Net periodic benefit cost $ 703 $ 573 $ 2,167 $ 2,137

(Some amounts may not reconcile due to rounding.)

The service cost component of net periodic benefit costs is included within other underwriting expenses on the consolidated statement of operations and comprehensive income (loss). In accordance with ASU 2017-07, other staff compensation costs are also primarily recorded within this line item.

The Company ~~contributed $10,000 thousand~~did not make any contributions to the qualified pension benefit plan for the three and nine months ended September 30, ~~2017. The Company contributed $30,000 thousand to the qualified pension benefit plan for the three~~2020 and ~~nine months ended September 30, 2016.~~

~~15.~~2019, respectively.

16. INCOME TAXES

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

The Company generally applies the estimated annual effective tax rate approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting. Under the estimated annual effective tax rate approach, the estimated annual effective tax rate is applied to the interim year-to-date pre-tax income/loss to determine the income tax expense or benefit for the year-to-date period. If the annual effective tax rate approach produces a year-to-date tax benefit which exceeds the amount which is estimated to be recoverable for the full year, then the tax benefit for the interim reporting period will be limited as

~~prescribed under ASC 740-270 to the estimated recoverable based on the year-to-date result.~~ The tax expense or benefit for the quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the ~~Company's~~Company’s annual pre-tax income/loss and effective tax rate.

~~16. DISPOSITION~~

On August 24, 2016 the Company sold Heartland, its crop Managing General Agent to CGB for $49,000 thousand. The sale agreement includes a provision for a long term strategic reinsurance relationship with CGB. The Company has recognized an after-tax loss on the sale of Heartland of $12,942 thousand. Under the terms of the reinsurance arrangement, there has not been a material fluctuation in the level of crop business, although it has been reflected as reinsurance rather than insurance.

17. SUBSEQUENT EVENTS

The Company has evaluated known recognized and non-recognized subsequent events. In October ~~2017, Hurricane Nate~~and November 2020, Hurricanes Delta, Zeta and Eta impacted the ~~Southern~~Caribbean and southeastern United ~~States and Central America and Hurricane Ophelia impacted Ireland, the United Kingdom and Northern Europe. Also, in October 2017, a number of wildfires affected California.~~States. Due to the recentness of these events, the Company is unable to estimate the amount of losses ~~related to Hurricane Nate, Hurricane Ophelia or the California wildfires~~ at this time. However, the Company anticipates that the losses from these events will adversely impact ~~the~~its fourth quarter ~~2017~~2020 financial ~~results.~~statements.

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

Industry Conditions.

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

~~We compete~~

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

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

~~Rates tend~~

The industry continues to ~~fluctuate by specific region~~deal with the impacts of a global pandemic, COVID-19. Globally, many countries mandated that their citizens remain at home and ~~products, particularly areas recently~~many non-essential businesses have continued to be physically closed. We closed our physical offices; however, we activated our operational resiliency plan across our global footprint and all of our critical operations are functioning effectively from remote locations. We continue to service and meet the needs of our clients while ensuring the safety and health of our employees and customers.

The pandemic has caused significant volatility in the global financial markets. Interest rates plummeted, credit spreads widened and the equity markets lost value. We saw our fixed maturity and equity portfolios decline in value resulting in realized and unrealized investment losses in our March 31, 2020 financial statements. However, the financial markets rebounded during the second and third quarters and we recognized after-tax unrealized gains of $283.1 million in these periods. Nevertheless, the lack of business activity may lead to an increase in bankruptcies and corresponding credit losses.

There will also be a negative impact on future industry underwriting results. With the closing of non-essential businesses, there has been a significant decline in business activity. To the extent that premiums are based on business activity, there will be a decline in premium volume. Incurred losses from the pandemic will be impacted by ~~large catastrophic events. There was an unprecedented series~~the duration of ~~catastrophes in~~ the ~~third~~event and will vary by line of business and geographical location. For the quarter ended September 30, 2020, our underwriting results include $31.1 million of ~~2017 with Hurricanes Harvey, Irma~~estimated losses related to the pandemic and ~~Maria,~~$104.8 million for the nine months ended September 30, 2020. We anticipate this Pandemic could have a meaningful impact on our revenue, as well as net and operating income in future quarters as a ~~significant earthquake~~result of reinsurance and insurance claims due to the pandemic and resulting macro-economic market conditions.

Many regulators have issued moratoriums on the cancellation of policies for the non-payment of premiums and also on non-renewals. We are complying with the various regulatory requests for accommodations to policyholders during this difficult period. The moratoriums combined with the forced closure of businesses may lead to an increase in ~~Mexico City. Additional catastrophe events occurred in October 2017 with Hurricanes Nate and Ophelia and~~uncollectible premium expense.

Prior to the wild fires in California. The total industry losses for all of these events could exceed $100 billion. This is the second consecutive year with higher than average catastrophe losses. During 2016, catastrophe losses included the Fort McMurray Canadian wildfire, Hurricane Matthew which affected a large area of the Caribbean and southeastern United States, storms and an earthquake in Ecuador. There are industry reports that the catastrophe losses for 2016 reached their highest level in four years and the United States experienced the most loss events since 1980 and the highest total losses since 2012. While the future impact on market conditions from these catastrophes cannot be determined at this time,pandemic, there was ~~some firming in the markets impacted by the 2016 catastrophes and as catastrophe losses continue to increase in 2017, there is~~ a growing industry consensus that there ~~will be a general~~was some firming of ~~the~~ (re)insurance ~~markets resulting~~rates for the areas impacted by the recent catastrophes. Rates also appeared to be firming in ~~rate increases, not only for catastrophe exposures, but also potentially for most other lines~~some of ~~business.~~

~~Commencing in 2015, we initiated a strategic build out of our insurance platform through~~ the investment in key leadership hires which in turn has brought significant underwriting talent and stronger direction in achieving our insurance program strategic goals of increased premium volume and improved underwriting results. Recent growth is coming from highly diversified areas including newly launchedcasualty lines of business, particularly in the casualty lines that had seen significant losses such as excess casualty and directors’ and officers’ liability. Other casualty lines were experiencing modest rate increase, while some lines such as workers’ compensation were experiencing softer market conditions. It is too early to tell what will be the impact on pricing conditions but it is likely to change depending on the line of business and geography.

While we are unable to predict the full impact the pandemic will have on the insurance industry as it continues to have a negative impact on the global economy, we are well ~~as, product and geographic expansion in existing lines of business. We are building a world-class~~

~~insurance platform capable of offering products across lines and geographies, complementing our leading global reinsurance franchise.~~

Overall, we believe that given our size, strong ratings, distribution system, reputation, expertise and capital market vehicle activity the current marketplace conditions provide profit opportunities. Wepositioned to continue to ~~employ~~service our ~~strategy~~clients. Our capital position remains a source of ~~targeting business that offers the greatest profit potential, while maintaining balance~~strength, with high quality invested assets, significant liquidity, low financial leverage, and ~~diversification in our overall portfolio.~~a low operating expense ratio. Our diversified global platform with its broad mix of products, distribution and geography is resilient.

Financial Summary.

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

	Three Months Ended				Percentage	Nine Months Ended				Percentage
	September 30,				Increase/	September 30,				Increase/
(Dollars in millions)	2020		2019		(Decrease)	2020		2019		(Decrease)
Gross written premiums	$	2,065.0	$	1,890.0	9.3%	$	5,878.2	$	5,262.9	11.7%
Net written premiums		1,725.7		1,570.0	9.9%		4,866.0		4,282.1	13.6%

REVENUES:
Premiums earned	$	1,615.5	$	1,428.4	13.1%		4,648.4	$	4,074.5	14.1%
Net investment income		135.4		95.6	41.7%	$	244.8		270.8	-9.6%
Net realized capital gains (losses)		115.2		112.6	2.4%		(107.3)		390.2	-127.5%
Other income (expense)		(1.8)		(2.7)	-33.1%		(11.4)		(8.5)	34.1%
Total revenues		1,864.3		1,633.9	14.1%		4,774.5		4,727.0	1.0%

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		1,277.9		1,098.1	16.4%		3,283.2		2,737.4	19.9%
Commission, brokerage, taxes and fees		322.4		357.7	-9.9%		1,001.2		962.7	4.0%
Other underwriting expenses		109.4		95.7	14.3%		304.7		257.4	18.4%
Corporate expense		4.2		3.2	32.2%		11.4		7.4	55.6%
Interest, fee and bond issue cost amortization expense		6.5		7.8	-16.2%		20.9		27.3	-23.4%
Total claims and expenses		1,720.4		1,562.5	10.1%		4,621.5		3,992.2	15.8%

INCOME (LOSS) BEFORE TAXES		143.9		71.4	101.6%		153.0		734.8	-79.2%
Income tax expense (benefit)		24.1		10.3	134.8%		(12.8)		141.2	-109.1%
NET INCOME (LOSS)	$	119.8	$	61.1	96.0%		165.9	$	593.7	-72.1%

RATIOS:					Point Change					Point Change
Loss ratio		79.1%		76.9%	2.2	$	70.6%		67.2%	3.4
Commission and brokerage ratio		20.0%		25.0%	(5.0)		21.5%		23.6%	(2.1)
Other underwriting expense ratio		6.7%		6.7%	-		6.6%		6.3%	0.3
Combined ratio		105.8%		108.6%	(2.8)		98.7%		97.1%	1.6

	At		At		Percentage
	September 30,		December 31,		Increase/
(Dollars in millions)	2020		2019		(Decrease)
Balance sheet data:
Total investments and cash	$	13,821.6	$	11,956.3	15.6%
Total assets		21,485.5		19,706.2	9.0%
Loss and loss adjustment expense reserves		11,042.0		10,209.5	8.2%
Total debt		710.8		633.8	12.1%
Total liabilities		15,329.8		13,848.8	10.7%
Stockholder's equity		6,155.7		5,857.4	5.1%

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

Three Months Ended Percentage Nine Months Ended Percentage
September 30, Increase/ September 30, Increase/
(Dollars in millions) 2017 2016 (Decrease) 2017 2016 (Decrease)
Gross written premiums $ 1,701.1 $ 1,505.9 13.0 % $ 4,289.1 $ 3,813.6 12.5 %
Net written premiums 570.8 622.6 -8.3 % 1,437.5 1,527.9 -5.9 %

REVENUES:
Premiums earned $ 518.5 $ 556.7 -6.9 % $ 1,457.8 $ 1,527.4 -4.6 %
Net investment income 73.4 64.6 13.7 % 206.2 196.9 4.7 %
Net realized capital gains (losses) 228.5 (50.1 )
NM
254.0 (87.3 )
NM
Other income (expense) 1.5 (13.2 ) -111.3 % 22.0 (10.8 ) NM
Total revenues 821.9 558.0 47.3 % 1,939.9 1,626.2 19.3 %

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses 1,331.6 301.6 NM 1,918.5 936.2 104.9 %
Commission, brokerage, taxes and fees 34.5 82.8 -58.3 % 147.6 219.6 -32.8 %
Other underwriting expenses 57.7 64.1 -10.0 % 181.8 181.7 0.1 %
Corporate expense 1.1 1.8 -38.3 % 6.2 6.2 1.0 %
Interest, fee and bond issue cost amortization expense 7.2 8.9 -19.2 % 24.0 26.6 -9.8 %
Total claims and expenses 1,432.1 459.2 211.9 % 2,278.1 1,370.2 66.3 %

INCOME (LOSS) BEFORE TAXES (610.2 ) 98.7
NM
(338.2 ) 256.0 -232.1 %
Income tax expense (benefit) (220.5 ) 22.4 NM (153.3 ) 69.4 NM
NET INCOME (LOSS) $ (389.7 ) $ 76.3
NM
$ (184.9 ) $ 186.7 -199.0 %

RATIOS: Point Change Point Change
Loss ratio 256.8 % 54.2 % 202.6 131.6 % 61.3 % 70.3
Commission and brokerage ratio 6.7 % 14.9 % (8.2 ) 10.1 % 14.4 % (4.3 )
Other underwriting expense ratio 11.1 % 11.5 % (0.4 ) 12.5 % 11.9 % 0.6
Combined ratio 274.6 % 80.6 % 194.0 154.2 % 87.6 % 66.6

At At Percentage
September 30, December 31, Increase/
(Dollars in millions) 2017 2016 (Decrease)
Balance sheet data:
Total investments and cash $ 10,231.7 $ 9,842.7 4.0 %
Total assets 19,143.4 17,083.4 12.1 %
Loss and loss adjustment expense reserves 9,969.1 8,331.3 19.7 %
Total debt 633.3 633.2 0.0 %
Total liabilities 13,975.7 11,784.9 18.6 %
Stockholder's equity 5,167.6 5,298.6 -2.5 %

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

35Revenues.

~~Revenues.~~

Premiums. Gross written premiums increased by ~~13.0%~~9.3% to ~~$1,701.1~~$2,065.0 million for the three months ended September 30, ~~2017,~~2020, compared to ~~$1,505.9~~$1,890.0 million for the three months ended September 30, ~~2016,~~2019, reflecting a ~~$263.6~~$176.0 million, or ~~26.1%~~13.6%, increase in our reinsurance business ~~and a $68.4 million, or 13.7%, decrease in~~while our insurance ~~business.~~business remained basically flat with a slight decline of $1.1 million. The increase in reinsurance premiums was mainly due to the ~~new crop reinsurance transactions, increases~~increase in ~~financial lines of~~treaty casualty writings, treaty property business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter. The decline in insurance premiums was due to the sale of Heartland Crop Insurance, Inc. ("Heartland") which accounted for $162.4 million of gross written premium in the third quarter of 2016. Excluding the impact of Heartland, insurance premiums rose by $94.0 million due to increased production in many lines of business, including retail casualty, surety and accident and health.facultative business. Gross written premiums increased by ~~12.5%~~11.7% to ~~$4,289.1~~$5,878.2 million for the nine months ended September 30, ~~2017,~~2020, compared to ~~$3,813.6~~$5,262.9 million for the nine months ended September 30, ~~2016,~~2019, reflecting a ~~$400.7~~$441.6 million, or ~~15.8%~~12.7%, increase in our reinsurance business and a ~~$74.7~~$173.7 million, or ~~5.9%~~9.7%, increase in our insurance business. The increase in reinsurance premiums was mainly due to ~~the new crop reinsurance transactions,~~ increases in treaty casualty writings and property ~~and financial lines of business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter.~~business. The rise in insurance premiums was primarily due to increases in many lines of business, including ~~retail~~property, casualty and accident and ~~health and surety, partially offset by the impact of the sale of Heartland.~~health.

Net written premiums ~~decreased~~increased by ~~8.3%~~9.9% to ~~$570.8~~$1,725.7 million for the three months ended September 30, ~~2017,~~2020, compared to ~~$622.6~~$1,570.0 million for the three months ended September 30, ~~2016,~~2019 and ~~decreased~~increased by ~~5.9%~~13.6% to ~~$1,437.5~~$4,866.0 million for the nine months ended September 30, ~~2017,~~2020, compared to ~~$1,527.9~~$4,282.1 million for the nine months ended September 30, ~~2016.~~2019. The ~~difference~~differences between the ~~change~~changes in gross written premiums compared to the ~~change~~changes in net written premiums isare primarily due to varying utilization of ~~reinsurance mainly related to affiliated quota share contracts.~~reinsurance. Premiums earned ~~decreased~~increased by ~~6.9%~~13.1% to ~~$518.5~~$1,615.5 million for the three months ended September 30, ~~2017,~~2020, compared to ~~$556.7~~$1,428.4 million for the three months ended September 30, ~~2016~~2019 and ~~decreased~~increased by ~~4.6%~~14.1% to ~~$1,457.8~~$4,648.4 million for the nine months ended September 30, ~~2017,~~2020, compared to ~~$1,527.4~~$4,074.5 million for the nine months ended September 30, ~~2016.~~2019. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Net Investment Income. Net investment income increased ~~13.7%~~41.7% to ~~$73.4~~$135.4 million for the three months ended September 30, ~~2017~~2020 compared with net investment income of ~~$64.6~~$95.6 million for the three months ended September 30, ~~2016~~2019. This increase was primarily the result of an increase in limited partnership income, as the improvement in the equity markets during the second quarter had a positive impact on the limited partnership valuations, and ~~increased 4.7%~~we had higher income from our growing fixed income portfolio. Net investment income decreased 9.6% to ~~$206.2~~$244.8 million for the nine months ended September 30, ~~2017~~2020 compared with net investment income of ~~$196.9~~$270.8 million for the nine months ended September 30, ~~2016.~~ 2019. This decrease in income was primarily the result of losses from our limited partnerships in the second quarter, partially offset by higher income from our growing fixed maturity portfolio. Net pre-tax investment income as a percentage of average invested assets was ~~3.0%~~4.3% and 3.4% for the three months ended September 30, 2020 and 2019, respectively and was 2.6% and 3.3% for the nine months ended September 30, 2020 and 2019, respectively.~~September~~

Net Realized Capital Gains (Losses). ~~30, 2017, compared to 2.7%~~Net realized capital gains were $115.2 million and $112.6 million for the three months ended ~~September~~ ~~30, 2016 and remained flat at 2.8% for the nine months ended~~ ~~September~~ ~~30, 2017 and 2016. The increases in income for the three and nine months ended~~ September 30, ~~2017 were primarily the result of higher income from our limited partnerships~~2020 and ~~higher income from the growing fixed income portfolio, partially offset by lower dividend income from our equity portfolio.~~

~~Net Realized Capital Gains (Losses).~~ ~~Net realized capital gains were $228.5 million and net realized capital losses were $50.1 million~~ ~~for the three months ended~~ ~~September~~ ~~30,~~ ~~2017 and 2016,~~2019, respectively. The net realized capital gains of ~~$228.5~~$115.2 million for the three months ended September 30, 2020, were comprised of ~~$227.5~~$113.4 million of gains from fair value re-measurements, onresulting primarily from increases in equity ~~securities~~security valuations which further rebounded from declines in the first quarter of 2020, and ~~other invested assets~~$2.3 million from a decline in net allowances for credit losses partially offset by 0.5 million of losses from sales of investments. The net realized capital gains of $112.6 million for the three months ended September 30, 2019 were comprised of $116.4 million of gains from fair value re-measurements and $~~2.4~~3.1 million of gains from sales ~~on our fixed maturity and equity securities,~~of investments, partially offset by ~~$1.5~~$7.0 million of ~~other-than-temporary~~other than temporary impairments.

Net realized capital losses were $107.3 million and net realized capital gains were $390.2 million for the nine months ended September 30, 2020 and 2019, respectively. The net realized capital losses of ~~$50.1~~$107.3 million for the ~~three~~nine months ended September 30, ~~2016~~ 2020 were comprised of $$~~30.9~~58.1 million of losses from fair value re-measurements, ~~on fixed maturity securities, equity securities~~$31.6 million of losses from sales of investments and ~~other invested assets,~~$17.6 million of net allowances for credit losses. The net realized capital ~~losses~~gains of ~~$28.0~~$390.2 million ~~from~~for the ~~sale~~nine months ended September 30, 2019 were comprised of ~~our Heartland subsidiary and $0.8 million of other-than-temporary impairments, partially offset by $~~$395.6~~9.6~~ million of gains from fair value re-measurements and $8.7million of net gains from sales ~~on our fixed maturity and equity securities.~~of investments, partially offset by $14.2 million of other-than-temporary impairments.

36Other Income (Expense).

~~Net realized capital gains were $254.0~~ We recorded other expense of $1.8 million and ~~net realized capital losses were $87.3~~$2.7 million for the three months ended September 30, 2020 and 2019. We recorded other expense of $11.4 million and $8.5 million for the nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The ~~net realized capital gains of $254.0 million were comprised of $237.8 million of gains from fair value re-measurements on equity securities and other invested assets and $20.3~~ ~~million of gains from sales on our fixed maturity and equity securities, partially offset by $4.2 million of other-than-temporary impairments. The net realized capital losses of $87.3 million~~ ~~for the nine months ended September 30, 2016~~ ~~million were~~ ~~comprised of~~ ~~net realized capital losses of $28.0 million from the sale of our Heartland subsidiary, $25.2 million of other-than-temporary impairments, $22.4~~ million of losses from sales on our fixed maturity and equity securities and $11.7 million of losses from fair value re-measurements on fixed maturity securities, equity securities and other invested assets.

~~Other Income (Expense).~~ ~~We recorded other income of $1.5 million and $22.0 million~~ ~~for the three and nine months ended September 30,~~ ~~2017, respectively. We recorded other expense of $13.2~~ ~~million and $10.8~~ ~~million for the three and nine months ended September 30, 2016, respectively. The changes were~~change was primarily the result of fluctuations in foreign currency exchange rates.

Claims and Expenses.

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

	Three Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	980.8	60.7%		$	-	0.0%		$	980.8	60.7%
Catastrophes		300.2	18.6%			(3.2)	-0.2%			297.0	18.4%
Total	$	1,281.1	79.3%		$	(3.2)	-0.2%		$	1,277.9	79.1%
2019
Attritional	$	814.6	57.0%		$	(13.4)	-0.9%		$	801.2	56.1%
Catastrophes		279.5	19.6%			17.4	1.2%			296.9	20.8%
Total	$	1,094.1	76.6%		$	4.0	0.3%		$	1,098.1	76.9%
Variance 2020/2019
Attritional	$	166.2	3.7	pts	$	13.4	0.9	pts	$	179.6	4.6	pts
Catastrophes		20.7	(1.0)	pts		(20.6)	(1.4)	pts		0.1	(2.4)	pts
Total	$	187.0	2.7	pts	$	(7.2)	(0.5)	pts	$	179.8	2.2	pts

	Nine Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	2,943.2	63.3%		$	(1.0)	0.0%		$	2,942.2	63.3%
Catastrophes		344.9	7.4%			(3.9)	-0.1%			341.0	7.3%
Total	$	3,288.0	70.7%		$	(4.9)	-0.1%		$	3,283.2	70.6%
2019
Attritional	$	2,405.0	59.0%		$	(27.2)	-0.7%		$	2,377.8	58.4%
Catastrophes		304.4	7.5%			55.3	1.4%			359.6	8.8%
Total	$	2,709.4	66.5%		$	28.1	0.7%		$	2,737.4	67.2%
Variance 2020/2019
Attritional	$	538.2	4.3	pts	$	26.2	0.7	pts	$	564.4	4.9	pts
Catastrophes		40.5	(0.1)	pts		(59.2)	(1.5)	pts		(18.6)	(1.5)	pts
Total	$	578.6	4.2	pts	$	(33.0)	(0.8)	pts	$	545.8	3.4	pts

(Some amounts may not reconcile due to rounding.)

Three Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 325.6 62.8 % $ (0.9 ) -0.2 % $ 324.7 62.6 %
Catastrophes 1,007.8 194.4 % (0.9 ) -0.2 % 1,006.9 194.2 %
Total $ 1,333.4 257.2 % $ (1.8 ) -0.4 % $ 1,331.6 256.8 %

2016

Attritional $ 300.4 54.0 % $ 0.1 0.0 % $ 300.6 54.0 %
Catastrophes 20.9 3.8 % (19.8 ) -3.6 % 1.0 0.2 %
Total $ 321.3 57.8 % $ (19.7 ) -3.6 % $ 301.6 54.2 %

Variance 2017/2016

Attritional $ 25.2 8.8 pts $ (1.0 ) (0.2 ) pts $ 24.1 8.6 pts
Catastrophes 986.9 190.6 pts 18.9 3.4 pts 1,005.9 194.0 pts
Total $ 1,012.1 199.4 pts $ 17.9 3.2 pts $ 1,030.0 202.6 pts

Nine Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 878.8 60.3 % $ 4.4 0.3 % $ 883.2 60.6 %
Catastrophes 1,039.3 71.3 % (3.9 ) -0.3 % 1,035.3 71.0 %
Total $ 1,918.1 131.6 % $ 0.5 0.0 % $ 1,918.5 131.6 %

2016

Attritional $ 894.7 58.5 % $ 0.9 0.1 % $ 895.6 58.6 %
Catastrophes 77.6 5.1 % (37.0 ) -2.4 % 40.6 2.7 %
Total $ 972.3 63.6 % $ (36.1 ) -2.3 % $ 936.2 61.3 %

Variance 2017/2016

Attritional $ (15.9 ) 1.8 pts $ 3.5 0.2 pts $ (12.4 ) 2.0 pts
Catastrophes 961.7 66.2 pts 33.1 2.1 pts 994.7 68.3 pts
Total $ 945.8 68.0 pts $ 36.6 2.3 pts $ 982.3 70.3 pts

(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE increased by 16.4% to ~~$1,331.6~~$1,277.9 million for the three months ended September 30, ~~2017~~2020 compared to ~~$301.6~~$1,098.1 million for the three months ended September 30, ~~2016,~~2019, primarily due to an increase of ~~$986.9~~$166.2 million in current year attritional losses, related to $31.1 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned, an increase of $20.7 million in current year catastrophe losses ~~an increase in current year attritional losses of $25.2~~and $13.4 million ~~and $19.8 million~~less of favorable development on prior years ~~catastrophe~~attritional losses in ~~2016, primarily related~~2020 compared to ~~the 2011 Japan earthquake, which did not recur in 2017.~~2019. The increase in ~~attritional~~incurred losses was ~~primarily due to the impact of changes~~partially offset by a $20.6 million improvement in ~~affiliated quota share contracts and changes in the mix of business.~~development on prior years catastrophe losses. The current year catastrophe losses of ~~$1,007.8 million~~ ~~for the three months ended~~ ~~September~~ ~~30,~~ 2017 related to Hurricane Irma ($476.2 million), Hurricane Maria ($318.9 million), Hurricane Harvey ($180.7 million) and the Mexico City earthquake ($32.1 million). The current year catastrophe losses of $20.9$300.2 million for the three months ended September 30, ~~2016 were~~2020 related to Hurricane ~~Hermine~~Laura ($~~6.8 million), 2016 U.S. Storms ($6.6~~122.4 million), the ~~Fort McMurray Canada wildfire~~Northern California wildfires ($~~5.0~~52.0 million), the ~~Taiwan earthquake~~California Glass wildfire ($~~2.3~~30.0 million), Hurricane Sally ($24.6 million), Oregon wildfires ($21.0 million), Hurricane Isaias ($19.9 million), the Derecho storms ($15.1 million), Calgary storms in Canada ($15.0 million), the U.S. Civil Unrest ($2.4 million) and the ~~Ecuador earthquake~~Nashville tornadoes ($~~0.2~~2.3 million),

partially offset by a reduction in the loss estimate for the Australia East Coast Storm ($3.2 million) and the 2020 Australia fires ($1.3 million). The current year catastrophe losses of $279.5 million for the three months ended September 30, 2019, mainly related to Hurricane Dorian ($154.5 million) and Typhoon Faxai ($126.0 million).

Incurred losses and LAE increased by ~~104.9%~~19.9% to ~~$1,918.5~~$3,283.2 million for the nine months ended September 30, ~~2017~~2020 compared to ~~$936.2~~$2,734.4 million for the nine months ended September 30, ~~2016,~~2019, primarily due to an increase of ~~$961.7~~$538.2 million in current year attritional losses, related primarily to $104.8 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned , an increase of $40.5 million in current year catastrophe losses and $26.2 million less of favorable development ~~of $37.0 million~~ on prior ~~year~~years attritional losses in 2020 compared to 2019. The increase in incurred losses was partially offset by a $59.2 million improvement in development on prior years catastrophe losses in ~~2016, primarily related~~2020 compared to ~~the 2011 Japan earthquake, which did not recur in 2017.~~2019. The current year catastrophe losses of ~~$1,039.3 million~~ ~~for the~~ ~~nine months ended September 30~~, 2017 related to Hurricane Irma ($476.2 million), Hurricane Maria ($318.9 million), Hurricane Harvey ($180.7 million), the Mexico City earthquake ($32.1 million), the South Africa Knysna fires ($10.0 million), Cyclone Debbie in Australia ($8.3 million), the Peru storms ($6.9 million) and the 2017 US Midwest storms ($6.2 million). The current year catastrophe losses of $77.6$344.9 million for the nine months ended September 30, ~~2016 were~~2020 related to ~~the Fort McMurray Canada wildfire~~Hurricane Laura ($~~26.9~~122.4 million), the ~~2016 U.S. Storms~~Northern California wildfires ($~~24.9~~52.0 million), the ~~Ecuador earthquake~~California Glass wildfire ($~~11.6~~30.0 million), Hurricane Sally ($24.6 million), Oregon wildfires ($21.0 million), Hurricane Isaias ($19.9 million), the ~~2016 Taiwan earthquake~~U.S. Civil Unrest ($~~7.5~~17.4 million), the Derecho storms ($15.1 million), the Nashville tornadoes ($15.1 million), the Calgary storms in Canada ($15.0 million), the Australia East Coast storm ($6.8 million) and ~~Hurricane Hermine~~the 2020 Australia fires ($~~6.8~~5.6 million). The current

~~Commission, Brokerage, Taxes and Fees.~~ ~~Commission, brokerage, taxes and fees decreased by 58.3% to $34.5 million~~ ~~for the three months ended~~ ~~September~~ ~~30,~~ ~~2017 compared to~~ ~~$82.8 million for the three months ended~~ ~~September~~ ~~30,~~ ~~2016.~~ ~~Commission, brokerage, taxes and fees decreased by 32.8% to $147.6 million~~ ~~for the nine months ended September 30,~~ ~~2017 compared to~~ ~~$219.6~~year catastrophe losses of $304.4 million for the nine months ended September 30, ~~2016. The decreases were~~2019 are primarily due to ~~the impact of the decrease in premiums earned~~Hurricane Dorian ($154.5 million) Typhoon Faxai ($126.0 million) and the ~~impact of affiliated quota share contracts.~~Townsville monsoon in Australia ($23.9 million).

~~Other Underwriting Expenses.~~Commission, Brokerage, Taxes and Fees. ~~Other underwriting expenses were $57.7 million~~ Commission, brokerage, taxes and ~~$64.1~~ fees decreased to $322.4 million for the three months ended September 30, ~~2017 and September 30, 2016, respectively. The decrease~~2020 compared to $357.7 million for the three ~~month period~~months ended September 30, 2019. The decrease was ~~primarily~~mainly due to ~~lower variable compensation costs. Other underwriting expenses were flat at $181.8 million~~ the impact of the commutation of a multi-year contract in 2019 which increased the level of prior year commission expense and changes in affiliated reinsurance agreements. Commission, brokerage, taxes and fees in~~and~~ ~~$181.7~~creased to $1,001.2 million for the nine months ended September 30, ~~2017 and~~2020 compared to $962.7 million for the nine months ended September 30, ~~2016, respectively.~~2019.

The increase was mainly due to the impact of the increases in premiums earned and changes in affiliated reinsurance agreements.

Other Underwriting Expenses. Other underwriting expenses increased to $109.4 million for the three months ended September 30, 2020 compared to $95.7 million for the three months ended September 30, 2019. Other underwriting expenses increased to $304.7 million for the nine months ended September 30, 2020 compared to $257.4 million for the nine months ended September 30, 2019. These increases were mainly due to changes in affiliated reinsurance agreements, impact of increases in premium earned and costs incurred to support the expansion of the insurance business.

Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, ~~decreased slightly~~have increased to ~~$1.1~~$4.2 million from ~~$1.8~~ $3.2 million for the three months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively, and ~~were flat at $6.2~~increased to $11.4 million from $7.4 million for the nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The increases were mainly due to costs associated with the relocation of our U.S. headquarters.

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization ~~were $7.2~~expense was $6.5 million and ~~$8.9~~$7.8 million for the three months ended September 30, ~~2017~~ 2020 and ~~2016,~~2019, respectively. Interest, fees and other bond amortization ~~were $24.0~~expense was $20.9 million and ~~$26.6~~$27.3 million for the nine months ended September 30, ~~2017~~ 2020 and ~~2016,~~2019, respectively. The decreases in expense ~~for both the three and nine month periods~~ were primarily due to interest expense on the ~~conversion of~~$300.0 million affiliated loan agreement with Bermuda Re in 2019 and the movement in the floating interest rate related to the long term subordinated notes, ~~from a fixed rate of 6.6% to a floating rate,~~ which is reset quarterly per the note agreement. The floating rate was ~~3.70%~~2.67% as of September 30, ~~2017.~~2020.

Income Tax Expense (Benefit). We had an income tax expense of $24.1 million and an income tax benefit of ~~$220.5 million~~ ~~and income tax expense of~~ ~~$22.4~~$12.8 million for the three and nine months ended September 30, ~~2017 and 2016,~~2020, respectively. We had an income tax ~~benefit~~expense of ~~$153.3~~$10.3 million and i~~ncome tax expense of~~ ~~$69.4~~$141.2 million for the three and nine months ended September 30, ~~2017 and 2016,~~2019, respectively. I~~ncome~~Income tax benefit or expense is primarily a function of the ~~Company's~~geographic location of the Company’s pre-tax income and the statutory tax rates in those jurisdictions. The effective tax rate as(“ETR”) is primarily affected by tax-exempt investment income, ~~and~~ foreign tax credits and ~~as calculated under the annualized effective tax rate ("AETR") method.~~dividends. Variations in ~~income tax expense~~the ETR generally

result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses and net capital gains (losses)~~. However, if the AETR approach produces a year-to-date~~, among jurisdictions with different tax benefit which exceeds the amount which is estimated to be recoverable for the full year, then the tax benefit for the interim reporting period will be limited, as prescribed under ASC 740-270, to the estimated tax recoverable based on the year-to-date result.rates. The ~~decrease~~change in income tax expense ~~for the three and nine months ended September 30, 2017~~ ~~compared to~~ ~~the three and nine months ended September 30, 2016~~ ~~was primarily due to the significant catastrophe losses incurred during the third quarter of 2017.~~

~~Net Income (Loss).~~

~~Our net loss was $389.7 million and our net income was $76.3 million~~ (benefit) for the three months ended September 30, 2020~~2017~~ as compared to the three months ended September 30, 2019 results primarily from higher investment income and ~~2016, respectively. Our net loss was $184.9 million and our net~~realized investment gains, partially offset by the estimated incurred losses from the COVID-19 pandemic. The change in income ~~was $186.7 million~~ tax for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019 was primarily due to the estimated incurred losses from the COVID-19 pandemic and the beneficial tax impact from the Coronavirus Aid, Relief and Economic Securities Act (“the CARES Act”).

The CARES Act was passed by Congress and signed into law by the President on March 27, 2020 in response to the COVID-19 pandemic. Among the provisions of the CARES Act was a special tax provision which allows companies to elect to carryback five years net operating losses incurred in the 2018, 2019 and/or 2020 tax years. The Tax Cuts and Jobs Act of 2017 had eliminated net operating loss carrybacks for most companies. The Company determined that the special 5 year loss carryback tax provision provided a tax benefit of $31.0 million which it recorded in the quarter ended March 31, 2020.

Net Income (Loss).

Our net income was $119.8 million and ~~2016,~~$61.1 million, for the three months ended September 30, 2020 and 2019 respectively. Our net income was $165.9 million and $593.7 million, for the nine months ended September 30, 2020 and 2019 respectively. The changes were primarily driven by the financial component fluctuations explained above.

Ratios.

~~Ratios.~~

Our combined ratio ~~increased~~decreased by ~~194.0~~2.8 points to ~~274.6%~~105.8% for the three months ended September 30, ~~2017,~~2020 compared to ~~80.6%~~108.6% for the three months ended September 30, ~~2016,~~2019, and increased by ~~66.6~~1.6 points to ~~154.2%~~98.7% for the nine months ended September 30, ~~2017,~~2020 compared to ~~87.6%~~97.1% for the nine months ended September 30, ~~2016.~~2019. The loss ratio ~~components~~component increased ~~202.6~~by 2.2 points and ~~70.3~~3.4 points in for the three and nine months ended September 30, ~~2017,~~2020, respectively, over the same period last ~~year. The changes were~~year mainly due to ~~the increases in current year catastrophe losses.~~higher attritional losses due to COVID-19. The commission and brokerage ratio ~~components~~component decreased to ~~6.7% from 14.9%~~20.0% for the three months ended September 30, ~~2017 and 2016, respectively,~~2020 compared to 25.0% for the three months ended September 30, 2019, and decreased to ~~10.1% from 14.4%~~21.5% for the nine months ended September 30, ~~2017~~2020 compared to 23.6% for the nine months ended September 30, 2019, reflecting the impact of the commutation of a multi-year contract in 2019 which increased the commission ratio, the impact of changes in affiliated reinsurance agreements and ~~2016, respectively. The decreases reflect~~the impact of changes in the mix of ~~business, the impact of affiliated quota share contracts and the impact from reinstatement premiums.~~business. The other underwriting expense ~~ratios decreased to 11.1% from 11.5%~~ratio remained flat at 6.7% for the three months ended September 30, ~~2017~~2020 and ~~2016, respectively,~~2019 and increased slightly to ~~12.5% from 11.9%~~6.6% for the nine months ended September 30, ~~2017 and 2016, respectively.~~2020 from 6.3% for the nine months ended September 30, 2019. The ~~decrease in~~increase for the ~~three~~nine month period was mainly due to ~~lower variable compensation costs. The increase~~the impact of changes in ~~the nine month period was due to costs associated with the continued expansion of the insurance business, partially offset~~affiliated reinsurance contracts.

Stockholder's Equity.

Stockholder’s equity increased by ~~lower variable compensation costs.~~

~~Stockholder's Equity.~~

~~Stockholders' equity decreased by $130.9~~$298.3 million to ~~$5,167.6~~$6,155.7 million at September 30, ~~2017~~ 2020 from ~~$5,298.6~~$5,857.4 million at December 31, ~~2016,~~2019, principally as a result of ~~$184.9~~$165.9 million of net ~~loss, partially offset by $43.2 million of net foreign currency translation adjustments, $5.4 million of net benefit plan obligation adjustments, $5.2~~income, $133.4 million of net unrealized depreciation on investments, net of tax, ~~and $0.2~~$4.5 million of ~~share-based compensation transactions.~~

net benefit plan obligation adjustments and $0.9 million of cumulative adjustment from the adoption of ASU-2016-13, partially offset by $6.8 million of net foreign currency translation adjustments.

Consolidated Investment Results

Net Investment Income.

Net investment income increased by ~~13.7%~~41.7% to ~~$73.4~~$135.4 million for the three months ended September 30, ~~201~~72020 compared to ~~$64.6~~$95.6 million for the three months ended September 30, ~~201~~2019. 6. This increase was primarily the result of an increase in limited partnership income, as the improvement in the equity markets during the second quarter had a positive impact on the limited partnership valuations, and we had higher income from our growing fixed income portfolio. Net investment income ~~increased~~decreased by ~~4.7%~~9.6% to ~~$206.2~~$244.8 million for the nine months ended September 30, ~~201~~72020 compared to ~~$196.9~~$270.8 million for the nine months ended September 30, ~~201~~2019. ~~6. The increases for~~This decrease in income was primarily the ~~three and nine month periods were primarily due to an increase~~result of losses from our limited partnerships in ~~limited partnership income and~~the second quarter, partially offset by higher income from ~~the~~our growing fixed ~~income portfolio, partially offset by lower dividend income from our equity~~maturity portfolio.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in millions)	2020		2019		2020		2019
Fixed maturities	$	78.3	$	68.2	$	227.3	$	200.6
Equity securities		2.5		1.9		6.1		5.7
Short-term investments and cash		0.5		2.2		2.6		8.1
Other invested assets
Limited partnerships		35.9		15.1		2.4		38.3
Dividends from preferred shares of affiliate		7.8		7.8		23.3		23.3
Other		14.7		7.3		(1.3)		13.6
Gross investment income before adjustments		139.7		102.5		260.4		289.6
Funds held interest income (expense)		0.9		1.1		5.1		5.4
Interest income from Parent		1.3		-		3.9		-
Gross investment income		141.8		103.6		269.3		295.0
Investment expenses		(6.4)		(8.0)		(24.5)		(24.2)
Net investment income	$	135.4	$	95.6	$	244.8	$	270.8

(Some amounts may not reconcile due to rounding.)

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in millions) 2017 2016 2017 2016
Fixed maturities $ 48.3 $ 44.8 $ 144.9 $ 134.9
Equity securities 6.3 7.9 19.4 25.8
Short-term investments and cash 0.6 0.3 1.6 0.9
Other invested assets
Limited partnerships 11.8 6.0 20.6 17.7
Dividends from preferred shares of affiliate 7.8 7.8 23.3 23.3
Other 1.5 0.5 4.2 0.3
Gross investment income before adjustments 76.4 67.3 214.1 202.8
Funds held interest income (expense) 1.1 1.1 4.0 4.7
Interest income from Parent 1.1 1.1 3.2 3.2
Gross investment income 78.5 69.5 221.3 210.8
Investment expenses (5.1 ) (4.9 ) (15.1 ) (13.9 )
Net investment income $ 73.4 $ 64.6 $ 206.2 $ 196.9

(Some amounts may not reconcile due to rounding.)

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

	At	At
	September 30,	December 31,
	2020	2019
Imbedded pre-tax yield of cash and invested assets	3.2%	3.5%
Imbedded after-tax yield of cash and invested assets	2.5%	2.8%

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Annualized pre-tax yield on average cash and invested assets	4.3%	3.4%	2.6%	3.3%
Annualized after-tax yield on average cash and invested assets	3.4%	2.7%	2.1%	2.6%

At At
September 30, December 31,
2017 2016
Imbedded pre-tax yield of cash and invested assets at December 31 3.1% 2.9%
Imbedded after-tax yield of cash and invested assets at December 31 2.1% 2.0%

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Annualized pre-tax yield on average cash and invested assets 3.0% 2.7% 2.8% 2.8%
Annualized after-tax yield on average cash and invested assets 2.1% 1.9% 2.0% 1.9%

Net Realized Capital Gains (Losses).

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	2020		2019		Variance		2020		2019		Variance
Gains (losses) from sales:
Fixed maturity securities, market value
Gains	$	5.0	$	6.6	$	(1.6)	$	15.6	$	17.5	$	(1.9)
Losses		(5.0)		(4.5)		(0.5)		(34.6)		(14.2)		(20.4)
Total		-		2.1		(2.1)		(19.0)		3.3		(22.3)
Fixed maturity securities, fair value
Gains		-		-		-		-		0.4		(0.4)
Losses		(2.0)		-		(2.0)		(2.0)		-		(2.0)
Total		(2.0)		-		(2.0)		(2.0)		0.4		(2.4)
Equity securities, fair value
Gains		9.5		1.1		8.4		30.3		9.3		21.0
Losses		(9.8)		(2.2)		(7.6)		(41.9)		(6.7)		(35.2)
Total		(0.3)		(1.1)		0.8		(11.6)		2.6		(14.2)
Other invested assets
Gains		1.4		2.6		(1.2)		6.0		2.9		3.1
Losses		(0.3)		(0.5)		0.2		(5.9)		(0.6)		(5.3)
Total		1.1		2.1		(1.0)		0.1		2.3		(2.2)
Short Term Investments:
Gains		0.8		-		0.8		1.0		0.1		0.9
Losses		-		-		-		-		-		-
Total		0.8		-		0.8		1.0		0.1		0.9
Total net realized gains (losses) from sales
Gains		16.7		10.3		6.4		52.9		30.2		22.7
Losses		(17.1)		(7.2)		(9.9)		(84.4)		(21.5)		(62.9)
Total		(0.5)		3.1		(3.6)		(31.6)		8.7		(40.3)

Allowances for credit losses:		2.3		-		2.3		(17.6)		-		(17.6)

Other than temporary impairments:		-		(7.0)		7.0		-		(14.2)		14.2

Gains (losses) from fair value adjustments:
Fixed maturities, fair value		3.3		-		3.3		1.9		-		1.9
Equity securities, fair value		94.3		(10.3)		104.6		120.8		93.3		27.5
Other invested assets, fair value		15.8		126.7		(110.9)		(180.8)		302.3		(483.1)
Total		113.4		116.4		(3.0)		(58.1)		395.6		(453.7)

Total net realized gains (losses)	$	115.2	$	112.6	$	2.6	$	(107.3)	$	390.2	$	(497.5)

(Some amounts may not reconcile due to rounding.)

Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2017 2016 Variance 2017 2016 Variance
Gains (losses) from sales:

Fixed maturity securities, market value
Gains $ 8.0 $ 6.3 $ 1.7 $ 23.7 $ 13.9 $ 9.8
Losses (4.1 ) (1.9 ) (2.2 ) (6.9 ) (24.1 ) 17.2
Total 3.9 4.4 (0.5 ) 16.8 (10.3 ) 27.0

Fixed maturity securities, fair value
Gains - - - - - -
Losses - - - - (1.9 ) 1.9
Total - - - - (1.9 ) 1.9

Equity securities, fair value
Gains 2.2 6.9 (4.7 ) 13.8 13.5 0.3
Losses (3.7 ) (1.4 ) (2.3 ) (10.3 ) (23.6 ) 13.3
Total (1.5 ) 5.5 (7.0 ) 3.5 (10.1 ) 13.6

Total net realized gains (losses) from sales
Gains 10.2 13.2 (3.0 ) 37.5 27.4 10.1
Losses (7.8 ) (3.4 ) (4.5 ) (17.2 ) (49.7 ) 32.5
Total 2.4 9.6 (7.5 ) 20.3 (22.4 ) 42.6

Gain (losses) on sale of subsidiary:
- (28.0 ) 28.0 - (28.0 ) 28.0

Other than temporary impairments:
(1.5 ) (0.8 ) (0.7 ) (4.2 ) (25.2 ) 21.0

Gains (losses) from fair value adjustments:

Fixed maturities, fair value - 0.1 (0.1 ) - 1.4 (1.4 )
Equity securities, fair value 29.6 16.0 13.6 82.0 34.7 47.3
Other invested assets, fair value 197.9 (47.0 ) 244.9 155.8 (47.8 ) 203.6
Total 227.5 (30.9 ) 258.4 237.8 (11.7 ) 249.5

Total net realized gains (losses) $ 228.5 $ (50.1 ) $ 278.6 $ 254.0 $ (87.3 ) $ 341.3
(Some amounts may not reconcile due to rounding.)

Net Realized Capital Gains (Losses).Net realized capital gains were ~~$228.5~~$115.2 million and ~~net realized capital losses were $50.1~~$112.6 million for the three months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. ~~For the three months ended September 30, 2017 we recorded $227.5 million of~~The net realized capital gains ~~due to fair value re-measurements on equity securities and other invested assets and $2.4~~of $115.2 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $1.5 million of other-than-temporary impairments. For the three months ended September 30, 2016, we recorded $30.9 million of net realized capital losses due to fair value re-measurements on fixed maturity securities, equity securities and other invested assets, net realized capital losses of $28.0 million from the sale of our Heartland subsidiary and $0.8 million of other-than-temporary impairments, partially offset by $9.6 million of net realized capital gains from sales of fixed maturity and equity securities. The fixed maturity and equity sales for the three months ended September 30, ~~2017~~2020, were comprised of $113.4 million of gains from fair value re-measurements, resulting primarily from increases in equity security valuations which further rebounded from declines in the first quarter of 2020, and ~~2016 related primarily to adjusting~~$2.3 million from a decline in net allowances for credit losses partially offset by 0.5 million of losses from sales of investments. The net realized capital gains of $112.6 million for the ~~portfolios for overall market changes~~three months ended September 30, 2019 were comprised of $116.4 million of gains from fair value re-measurements and ~~individual credit shifts.~~3.1 million of gains from sales of investments, partially offset by $7.0 million of other than temporary impairments.

Net realized capital ~~gains~~losses were ~~$254.0~~$107.3 million and net realized capital ~~losses~~gains were ~~$87.3~~$390.2 million for the nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. For the nine months ended September 30, 2017 we recorded $237.8 million of net realized capital gains due to fair value re-measurements on equity securities and other invested assets and $20.3 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $4.2 million of other-than-temporary impairments. For the nine months ended September 30, 2016, we recordedThe net realized capital losses of ~~$28.0~~$107.3 million ~~from the~~

sale of our Heartland subsidiary, $25.2 million of other-than-temporary impairments, $22.4 million of net realized capital losses from sales of fixed maturity and equity securities and $11.7 million of net realized capital losses due to fair value re-measurements on fixed maturity securities, equity securities and other invested assets. The fixed maturity and equity sales for the nine months ended September 30, ~~2017~~2020 were comprised of $58.1 million of losses from fair value re-measurements, $31.6 million of losses from sales of investments and ~~2016 related primarily to adjusting~~$17.6 million of net allowances for credit losses. The net realized capital gains of $390.2 million for the ~~portfolios for overall market changes~~nine months ended September 30, 2019 were comprised of $395.6 million of gains from fair value re-measurements and ~~individual credit shifts.~~

$8.7million of net gains from sales of investments, partially offset by $14.2 million of other-than-temporary impairments.

Segment Results.

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

United States.

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

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

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

~~U.S.~~

Reinsurance.

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

	Three Months Ended September 30,							Nine Months Ended September 30,
(Dollars in millions)	2020		2019		Variance		% Change	2020		2019		Variance		% Change
Gross written premiums	$	1,473.3	$	1,297.2	$	176.1	13.6%	$	3,906.4	$	3,464.8	$	441.6	12.7%
Net written premiums		1,296.1		1,141.4		154.7	13.6%		3,403.1		2,955.3		447.8	15.2%

Premiums earned	$	1,153.7	$	996.5	$	157.2	15.8%	$	3,223.6	$	2,852.0	$	371.6	13.0%
Incurred losses and LAE		936.9		800.7		136.2	17.0%		2,250.3		1,935.7		314.6	16.3%
Commission and brokerage		265.1		297.5		(32.4)	-10.9%		818.3		793.0		25.3	3.2%
Other underwriting expenses		35.7		30.4		5.3	17.4%		92.1		79.8		12.3	15.4%
Underwriting gain (loss)	$	(84.0)	$	(132.1)	$	48.1	-36.4%	$	62.9	$	43.5	$	19.4	44.6%

							Point Chg							Point Chg
Loss ratio		81.2%		80.3%			0.9		69.8%		67.9%			1.9
Commission and brokerage ratio		23.0%		29.9%			(6.9)		25.4%		27.8%			(2.4)
Other underwriting ratio		3.1%		3.1%			-		2.8%		2.8%			-
Combined ratio		107.3%		113.3%			(6.0)		98.0%		98.5%			(0.5)

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

Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2017 2016 Variance % Change 2017 2016 Variance % Change
Gross written premiums $ 908.3 $ 654.8 $ 253.6 38.7 % $ 1,962.3 $ 1,597.0 $ 365.3 22.9 %
Net written premiums 295.6 327.2 (31.6 ) -9.7 % 649.9 711.7 (61.8 ) -8.7 %

Premiums earned $ 242.4 $ 249.2 $ (6.9 ) -2.8 % $ 653.0 $ 709.1 $ (56.1 ) -7.9 %
Incurred losses and LAE 678.9 137.2 541.7
NM
919.1 363.6 555.5 152.8 %
Commission and brokerage 31.7 48.1 (16.4 ) -34.1 % 115.2 148.0 (32.7 ) -22.1 %
Other underwriting expenses 12.1 14.3 (2.2 ) -15.2 % 40.6 39.9 0.8 1.9 %
Underwriting gain (loss) $ (480.4 ) $ 49.6 $ (530.0 ) NM $ (422.0 ) $ 157.7 $ (579.7 ) NM

Point Chg Point Chg
Loss ratio 280.1 % 55.1 % 225.0 140.8 % 51.3 % 89.5
Commission and brokerage ratio 13.1 % 19.3 % (6.2 ) 17.6 % 20.9 % (3.2 )
Other underwriting ratio 5.0 % 5.7 % (0.7 ) 6.2 % 5.6 % 0.6
Combined ratio 298.2 % 80.1 % 218.1 164.6 % 77.8 % 86.9

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

42Premiums.

~~Premiums.~~Gross written premiums increased by ~~38.7%~~13.6% to ~~$908.3~~$1,473.3 million for the three months ended September 30, ~~201~~72020 from ~~$654.8~~$1,297.2 million for the three months ended September 30, ~~201~~6,2019 primarily due to ~~the new crop reinsurance business related to the sale of Heartland~~increases in casualty writings and ~~the influx of reinstatement premiums due to the catastrophe losses.~~treaty property business. Net written premiums ~~decreased~~increased by ~~9.7%~~13.6% to ~~$295.6~~$1,296.1 million for the three months ended September 30, ~~201~~72020 compared to ~~$327.2~~$1,141.4 million for the three months ended September 30, ~~201~~6. ~~The difference between~~2019, which is consistent with the change in gross written ~~premiums compared~~premiums. Premiums

earned increased 15.8% to ~~the change in net written premiums is primarily due to a varying utilization of reinsurance primarily related to the affiliated quota share contracts. Premiums earned decreased 2.8% to $242.4~~$1,153.7 million for the three months ended September 30, ~~201~~72020 compared to ~~$249.2~~$996.5 million for the three months ended September 30, ~~201~~6. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

~~Gross written premiums increased by 22.9% to $1,962.3 million for the nine months ended September 30, 201~~7 ~~from $1,597.0 million for the nine months ended September 30, 201~~6, primarily due to the new crop reinsurance business, an increase in treaty casualty business and the influx of reinstatement premiums due to the catastrophe losses. Net written premiums decreased by 8.7% to $649.9 million for the nine months ended September 30, 2017 ~~compared to $711.7 million for the nine months ended September 30, 201~~6. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to a varying utilization of reinsurance primarily related to the affiliated quota share contracts. Premiums earned decreased 7.9% to $653.0 million for the nine months ended September 30, 2017 ~~compared to $709.1 million for the nine months ended September 30, 201~~6. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

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

Three Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 128.0 52.8 % $ (0.4 ) -0.2 % $ 127.5 52.6 %
Catastrophes 551.6 227.6 % (0.2 ) -0.1 % 551.4 227.5 %
Total segment $ 679.6 280.4 % $ (0.6 ) -0.3 % $ 678.9 280.1 %

2016

Attritional $ 129.8 52.1 % $ (1.0 ) -0.4 % $ 128.8 51.7 %
Catastrophes 14.4 5.8 % (5.9 ) -2.4 % 8.5 3.4 %
Total segment $ 144.2 57.9 % $ (6.9 ) -2.8 % $ 137.2 55.1 %

Variance 2017/2016

Attritional $ (1.8 ) 0.7 pts $ 0.6 0.2 pts $ (1.3 ) 0.9 pts
Catastrophes 537.2 221.8 pts 5.7 2.3 pts 542.9 224.1 pts
Total segment $ 535.4 222.5 pts $ 6.3 2.5 pts $ 541.7 225.0 pts

Nine Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 374.8 57.4 % $ (4.7 ) -0.7 % $ 370.0 56.7 %
Catastrophes 553.2 84.7 % (4.1 ) -0.6 % 549.1 84.1 %
Total segment $ 928.0 142.1 % $ (8.8 ) -1.3 % $ 919.1 140.8 %

2016

Attritional $ 365.2 51.6 % $ (1.3 ) -0.2 % $ 363.9 51.4 %
Catastrophes 15.8 2.2 % (16.1 ) -2.3 % (0.3 ) -0.1 %
Total segment $ 381.0 53.8 % $ (17.4 ) -2.5 % $ 363.6 51.3 %

Variance 2017/2016

Attritional $ 9.6 5.8 pts $ (3.4 ) (0.5 ) pts $ 6.1 5.3 pts
Catastrophes 537.4 82.5 pts 12.0 1.7 pts 549.4 84.2 pts
Total segment $ 547.0 88.3 pts $ 8.6 1.2 pts $ 555.5 89.5 pts

(Some amounts may not reconcile due to rounding.)

~~Incurred losses increased to $678.9 million for the three months ended September 30, 201~~7 ~~compared to $137.2 million for the three months ended September 30, 201~~6~~, primarily due to an increase of $537.2 million in current year catastrophe losses.~~ ~~The current year catastrophe losses of $551.6 million~~ ~~for the three months ended September 30, 2017 related to Hurricane Irma ($348.6 million), Hurricane Harvey ($128.5 million), Hurricane Maria ($74.0 million), and the Mexico City earthquake ($1.1 million).~~ ~~The $14.4 million of current year catastrophe losses for the three months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million), 2016 U.S. Storms ($6.3 million) and the Fort McMurray Canada Wildfire ($1.3 million).~~

~~Incurred losses increased by 152.8% to $919.1 million for the nine months ended September 30, 201~~7 ~~compared to $363.6 million for the nine months ended September 30, 201~~6, due to an increase of $537.4 million in current year catastrophe losses, favorable development of $16.1 million on prior years' catastrophe losses in 2016 which did not recur in 2017 and an increase of $9.6 million in current year attritional losses, resulting mainly from the impact of the new crop reinsurance contract. ~~The current year catastrophe losses of $553.2 million~~ ~~for the nine months ended September 30, 2017 related to Hurricane Irma ($348.6 million), Hurricane Harvey ($128.5 million), Hurricane Maria ($74.0 million), the Mexico City earthquake ($1.1 million) and the 2017 U.S. Storms ($1.4 million).~~ ~~The $15.8 million of current year catastrophe losses for the nine months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million) and 2016 U.S. Storms ($9.6 million).~~

~~Segment Expenses.~~ ~~Commission and brokerage expenses decreased by 34.1% to $31.7 million~~ ~~for the three months ended September 30, 2017~~ ~~compared to $48.1 million~~ ~~for the three months ended September 30, 2016. Commission and brokerage expenses decreased by 22.1% to $115.2 million~~ ~~for the nine months ended September 30, 2017~~ ~~compared to $148.0 million~~ ~~for the nine months ended September 30, 2016~~. The decreases are mainly due to the impact of the new crop reinsurance contract which generally has a lower expense ratio, the impact of affiliated quota share contracts and the impact of the decrease in premiums earned.

~~Segment other underwriting expenses decreased to $12.1 million~~ ~~for the three months ended September 30, 2017~~ ~~from $14.3 million~~ ~~for the three months ended September 30, 2016. The decrease for the three month period was primarily due to lower variable compensation costs.~~ ~~Segment other underwriting expenses increased slightly to $40.6 million~~ ~~for the nine months ended September 30, 2017~~ ~~from $39.9 million~~ ~~for the nine months ended September 30, 2016.~~

~~International.~~

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

Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2017 2016 Variance % Change 2017 2016 Variance % Change
Gross written premiums $ 363.2 $ 353.2 $ 10.0 2.8 % $ 975.3 $ 939.9 $ 35.4 3.8 %
Net written premiums 130.2 141.3 (11.1 ) -7.9 % 345.4 353.4 (8.1 ) -2.3 %

Premiums earned $ 123.9 $ 128.4 $ (4.4 ) -3.5 % $ 355.4 $ 372.8 $ (17.5 ) -4.7 %
Incurred losses and LAE 410.5 41.8 368.7
NM
557.4 206.7 350.7 169.7 %
Commission and brokerage 25.1 30.2 (5.1 ) -16.9 % 72.4 82.4 (10.0 ) -12.2 %
Other underwriting expenses 8.2 9.2 (1.0 ) -10.6 % 26.3 25.0 1.3 5.1 %
Underwriting gain (loss) $ (320.0 ) $ 47.1 $ (367.1 ) NM $ (300.8 ) $ 58.7 $ (359.5 ) NM

Point Chg Point Chg
Loss ratio 331.3 % 32.6 % 298.7 156.9 % 55.4 % 101.5
Commission and brokerage ratio 20.3 % 23.5 % (3.3 ) 20.4 % 22.1 % (1.7 )
Other underwriting ratio 6.6 % 7.2 % (0.6 ) 7.3 % 6.8 % 0.5
Combined ratio 358.2 % 63.3 % 294.9 184.6 % 84.3 % 100.4

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

~~Premiums.~~ ~~Gross written premiums increased by 2.8% to $363.2 million for the three months ended September 30, 201~~7 ~~compared to $353.2 million for the three months ended September 30, 201~~6, primarily due to the increase in Middle East, African and Asian business, partially offset by a decline in Latin American business and a negative impact of $5.6 million from the movement of foreign exchange rates. Net written premiums decreased by 7.9% to $130.2 million for the three months ended September 30, 2017 ~~compared to $141.3 million for the three months ended September 30, 201~~6. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts, including affiliated quota share contracts. Premiums earned decreased 3.5% to $123.9 million for the three months ended September 30, 2017 ~~compared to $128.4 million for the three months ended September 30, 201~~6. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

~~Gross written premiums increased by 3.8% to $975.3 million for the nine months ended September 30, 201~~7 ~~compared to $939.9 million for the nine months ended September 30, 201~~6, primarily due to increases in Middle East, African and Asian business and the positive impact of $17.7 million from the movement of foreign exchange rates. Net written premiums decreased by 2.3% to $345.4 million for the nine months ended September 30, 2017 ~~compared to $353.4 million for the nine months ended September 30, 201~~6. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts, including affiliated quota share contracts. Premiums earned decreased 4.7% to $355.4 million for the nine months ended September 30, 2017 ~~compared to $372.8 million for the nine months ended September 30, 201~~6. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

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

Three Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 64.0 51.7 % $ 0.7 0.6 % $ 64.7 52.3 %
Catastrophes 346.6 279.7 % (0.8 ) -0.7 % 345.8 279.0 %
Total segment $ 410.6 331.4 % $ (0.1 ) -0.1 % $ 410.5 331.3 %

2016

Attritional $ 49.3 38.4 % $ - 0.0 % $ 49.3 38.4 %
Catastrophes 6.5 5.1 % (14.0 ) -10.9 % (7.5 ) -5.8 %
Total segment $ 55.8 43.5 % $ (14.0 ) -10.9 % $ 41.8 32.6 %

Variance 2017/2016

Attritional $ 14.7 13.3 pts $ 0.7 0.6 pts $ 15.4 13.9 pts
Catastrophes 340.1 274.6 pts 13.2 10.2 pts 353.3 284.8 pts
Total segment $ 354.8 287.9 pts $ 13.9 10.8 pts $ 368.7 298.7 pts

Nine Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 182.9 51.5 % $ 2.6 0.7 % $ 185.5 52.2 %
Catastrophes 371.7 104.6 % 0.2 0.1 % 371.9 104.7 %
Total segment $ 554.6 156.1 % $ 2.8 0.8 % $ 557.4 156.9 %

2016

Attritional $ 185.6 49.8 % $ (3.4 ) -0.9 % $ 182.3 48.9 %
Catastrophes 45.2 12.1 % (20.8 ) -5.6 % 24.4 6.5 %
Total segment $ 230.8 61.9 % $ (24.1 ) -6.5 % $ 206.7 55.4 %

Variance 2017/2016

Attritional $ (2.7 ) 1.7 pts $ 6.0 1.6 pts $ 3.2 3.3 pts
Catastrophes 326.5 92.5 pts 21.0 5.7 pts 347.5 98.2 pts
Total segment $ 323.8 94.2 pts $ 26.9 7.3 pts $ 350.7 101.5 pts

(Some amounts may not reconcile due to rounding.)

~~Incurred losses and LAE increased to $410.5 million for the three months ended September 30, 201~~7 ~~compared to $41.8 million for the three months ended September 30, 201~~6, primarily due to an increase of $340.1 million in current year catastrophe losses, an increase of $14.7 million in current year attritional losses and $14.0 million of favorable development on prior year catastrophe losses in 2016, which did not recur in 2017. ~~The current year catastrophe losses of $346.6 million~~ ~~for the three months ended September 30, 2017 related to Hurricane Maria ($236.2 million), Hurricane Irma ($77.5 million), the Mexico City earthquake ($31.1 million) and Hurricane Harvey ($1.4 million).~~ ~~The $6.5 million of current year catastrophe losses for the three months ended September 30, 2016~~ ~~were related to the Fort McMurray Canada Wildfire ($3.7 million), the Taiwan earthquake ($2.3 million), 2016 U.S. Storms ($0.3 million) and the Ecuador earthquake ($0.2 million).~~

~~Incurred losses and LAE increased by 169.7% to $557.4 million for the nine months ended September 30, 201~~7 ~~compared to $206.7 million for the nine months ended September 30, 201~~6~~, primarily due to an increase of $326.5 million in current catastrophe losses and $20.8 million of favorable development on prior year catastrophe losses in 2016 which did not recur in 2017.~~ ~~The current year catastrophe losses of $371.7 million~~ ~~for the nine months ended September 30, 201~~7 related to Hurricane Maria ($236.2 million), Hurricane Irma ($77.5 million), the Mexico City earthquake ($31.1 million), the South Africa Knysna fires ($10.1 million), Cyclone Debbie in Australia ($8.3 million), the Peru storms ($7.1 million) and Hurricane Harvey ($1.4 million). ~~The $45.2 million of current year catastrophe losses for the nine months ended~~

~~September 30, 2016 were due to the Fort McMurray Canada wildfire ($25.4 million), the Ecuador earthquake ($11.8 million), the Taiwan earthquake ($7.6 million) and~~ ~~U.S. Storms ($0.3 million)~~.

~~Segment Expenses.~~ ~~Commission and brokerage decreased 16.9% to $25.1 million for the three months ended September 30, 201~~7 ~~compared to $30.2 million for the three months ended September 30, 201~~6~~. Commission and brokerage decreased 12.2% to $72.4 million for the nine months ended September 30, 201~~7 ~~compared to $82.4 million for the nine months ended September 30, 201~~6~~. The decreases were due to the impact of the decreases in premiums earned, the impact of affiliated quota share agreements and changes in the mix of business.~~

~~Segment other underwriting expenses decreased to $8.2 million for the three months ended September 30, 201~~7 ~~from $9.2 million for the three months ended September 30, 201~~6. ~~The decrease for the three month period is primarily due to lower variable compensation costs. Segment other underwriting expenses~~ ~~increased slightly to~~ ~~$26.3 million for the nine months ended September 30, 201~~7 ~~from $25.0 million for the nine months ended September 30, 201~~6.

~~Insurance.~~

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

Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2017 2016 Variance % Change 2017 2016 Variance % Change
Gross written premiums $ 429.6 $ 498.0 $ (68.4 ) -13.7 % $ 1,351.5 $ 1,276.8 $ 74.7 5.9 %
Net written premiums 144.9 154.1 (9.1 ) -5.9 % 442.2 462.8 (20.6 ) -4.4 %

Premiums earned $ 152.2 $ 179.1 $ (26.9 ) -15.0 % $ 449.4 $ 445.6 $ 3.9 0.9 %
Incurred losses and LAE 242.1 122.5 119.6 97.6 % 442.0 366.0 76.0 20.8 %
Commission and brokerage (22.3 ) 4.5 (26.7 ) NM (40.1 ) (10.9 ) (29.2 ) NM
Other underwriting expenses 37.4 40.7 (3.3 ) -8.1 % 114.9 116.8 (2.0 ) -1.7 %
Underwriting gain (loss) $ (105.0 ) $ 11.4 $ (116.4 ) NM $ (67.3 ) $ (26.4 ) $ (40.9 ) NM

Point Chg Point Chg
Loss ratio 159.0 % 68.4 % 90.6 98.3 % 82.1 % 16.2
Commission and brokerage ratio -14.6 % 2.5 % (17.1 ) -8.9 % -2.5 % (6.4 )
Other underwriting ratio 24.5 % 22.7 % 1.8 25.6 % 26.3 % (0.7 )
Combined ratio 168.9 % 93.6 % 75.3 115.0 % 105.9 % 9.1

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

~~Premiums.~~ ~~Gross written premiums decreased by 13.7% to $429.6 million for the three months ended September 30, 201~~7 ~~compared to $498.0 million for the three months ended September 30, 201~~6. This decrease was primarily due to the sale of Heartland, which accounted for $162.4 million of gross written premiums in the third quarter of 2016. Excluding the impact of Heartland, gross written premiums increased by $94.0 million due to higher production from many lines of business, including retail casualty, surety and accident and health. Net written premiums decreased by 5.9% to $144.9 million for the three months ended September 30, 2017 ~~compared to $154.1 million for the three months ended September 30, 201~~6. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the more conservative reinsurance position we have taken to support our expanded insurance business and the impact of affiliated quota share agreements. Premiums earned decreased 15.0% to $152.2 million for the three months ended September 30, 2017 ~~compared to $179.1 million for the three months ended September 30, 201~~6.2019. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Gross written premiums increased by ~~5.9%~~12.7% to ~~$1,351.5~~$3,906.4 million for the nine months ended September 30, ~~201~~7 ~~compared to $1,276.8~~2020 from $3,464.8 million for the nine months ended September 30, ~~201~~6~~. Excluding the impact of the sale of Heartland, which accounted for $229.9 million of gross written premiums~~2019 primarily due to increases in ~~the nine months~~

~~ended September 30, 2016, gross~~casualty writings and treaty property business. Net written premiums increased ~~$304.6 million. This increase was primarily driven~~ by ~~expansion of many lines of business, including retail casualty, retail property, surety and accident and health. Net written premiums decreased by 4.4%~~15.2% to ~~$442.2~~$3,403.1 million for the nine months ended September 30, ~~201~~72020 compared to ~~$462.8~~$2,955.3 million for the nine months ended September 30, ~~201~~6. 2019. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to ~~the more conservative reinsurance position we have taken to support our new business and the impact~~varying utilization of ~~affiliated quota share agreements.~~ reinsurance. Premiums earned increased ~~0.9%~~13.0% to ~~$449.4~~$3,223.6 million for the nine months ended September 30, ~~201~~72020 compared to ~~$445.6~~$2,852.0 million for the nine months ended September 30, ~~201~~6.2019. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Incurred Losses and LAE.The following tables present the incurred losses and LAE for the Reinsurance segment for the periods indicated.

	Three Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	677.2	58.7%		$	-	0.0%		$	677.2	58.7%
Catastrophes		262.7	22.8%			(3.0)	-0.3%			259.7	22.5%
Total segment	$	939.9	81.5%		$	(3.0)	-0.3%		$	936.9	81.2%
2019
Attritional	$	524.9	52.7%		$	(14.7)	-1.5%		$	510.2	51.2%
Catastrophes		275.5	27.6%			15.0	1.5%			290.5	29.1%
Total segment	$	800.4	80.3%		$	0.2	0.0%		$	800.7	80.3%
Variance 2020/2019
Attritional	$	152.3	6.0	pts	$	14.7	1.5	pts	$	167.0	7.5	pts
Catastrophes		(12.8)	(4.8)	pts		(18.0)	(1.8)	pts		(30.8)	(6.6)	pts
Total segment	$	139.5	1.2	pts	$	(3.3)	(0.3)	pts	$	136.2	0.7	pts

	Nine Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	1,967.2	61.0%		$	(0.6)	0.0%		$	1,966.6	61.0%
Catastrophes		286.9	8.9%			(3.2)	-0.1%			283.7	8.8%
Total segment	$	2,254.1	69.9%		$	(3.8)	-0.1%		$	2,250.3	69.8%
2019
Attritional	$	1,594.4	55.9%		$	(9.9)	-0.3%		$	1,584.6	55.6%
Catastrophes		300.4	10.5%			50.8	1.8%			351.2	12.3%
Total segment	$	1,894.8	66.4%		$	40.9	1.5%		$	1,935.7	67.9%
Variance 2020/2019
Attritional	$	372.8	5.1	pts	$	9.3	0.3	pts	$	382.0	5.4	pts
Catastrophes		(13.5)	(1.6)	pts		(54.0)	(1.9)	pts		(67.5)	(3.5)	pts
Total segment	$	359.3	3.5	pts	$	(44.7)	(1.6)	pts	$	314.6	1.9	pts

(Some amounts may not reconcile due to rounding.)

Incurred losses increased by 17.0% to $936.9 million for the three months ended September 30, 2020 compared to $800.7 million for the three months ended September 30, 2019. The increase was primarily due

to an increase of $152.3 million in current year attritional losses, primarily related to $27.1 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned, as well as $14.7 million less of favorable development on prior years attritional losses in 2020 compared to 2019. The increase in incurred losses was partially offset by a decline of $12.8 million in current year catastrophe losses and $18.0 million of improvement in development on prior years catastrophe losses in 2020 compared to 2019. The $262.7 million of current year catastrophe losses for the three months ended September 30, 2020 related to Hurricane Laura ($107.4 million), the Northern California wildfires ($52.0 million), the California Glass wildfire ($30.0 million), Oregon wildfires ($21.0 million), Hurricane Isaias ($17.9 million), the Derecho storms ($13.1 million), Calgary storms in Canada ($12.5 million), Hurricane Sally ($8.6 million), the U.S. Civil Unrest ($2.4 million) and the Nashville tornadoes ($2.3 million), partially offset by a reduction in the loss estimate for the Australia East Coast storm ($3.2 million) and the 2020 Australia fires ($1.3 million). The current year catastrophe losses of $275.5 million for the three months ended September 30, 2019 related to Hurricane Dorian ($150.5 million) and Typhoon Faxai ($126.0 million)..

Incurred losses increased by 16.3% to $2,250.3 million for the nine months ended September 30, 2020 compared to $1,935.7 million for the nine months ended September 30, 2019. The increase was primarily due to an increase of $372.8 million in current year attritional losses, primarily related to $72.6 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned, as well as $9.3 million less of favorable development on prior years attritional losses in 2020 compared to 2019. The increase in incurred losses was partially offset by a decline of $13.5 million in current year catastrophe losses and $54.0 million of improvement in development on prior years catastrophe losses in 2020 compared to 2019. The current year catastrophe losses of $286.9 million for the nine months ended September 30, 2020 primarily related to Hurricane Laura ($107.4 million), the Northern California wildfires ($52.0 million), the California Glass wildfire ($30.0 million), Oregon wildfires ($21.0 million), Hurricane Isaias ($17.9 million), , the Derecho storms ($13.1 million), the Nashville tornadoes ($9.6 million), the Calgary storms in Canada ($12.5 million), Hurricane Sally ($8.6 million), the Australia East Coast storm ($6.8 million), the 2020 Australia fires ($5.6 million) and the U.S. Civil Unrest ($2.4 million),. The current year catastrophe losses of $300.4 million for the nine months ended September 30, 2019mainly related to Hurricane Dorian ($150.5 million), Typhoon Faxai ($126.0 million), and the Townsville monsoon in Australia ($23.9 million).

Segment Expenses. Commission and brokerage decreased to $265.1 million for the three months ended September 30, 2020 compared to $297.5 million for the three months ended September 30, 2019. The decrease was mainly due to the impact of the commutation of a multi-year contract in 2019 which increased prior year commission expense and the impact of changes in affiliated reinsurance agreements. Commission and brokerage increased to $818.3 million for the nine months ended September 30, 2020 compared to $793.0 million for the nine months ended September 30, 2019. The increase was mainly due to the impact of the increase in premiums earned. Segment other underwriting expenses increased to $35.7 million for the three months ended September 30, 2020 from $30.4 million for the three months ended September 30, 2019. Segment other underwriting expenses increased to $92.1 million for the nine months ended September 30, 2020 from $79.8 million for the nine months ended September 30, 2019. These were mainly due to the impact of the increase in premiums earned and changes in affiliated reinsurance agreements.

Insurance.

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

	Three Months Ended September 30,							Nine Months Ended September 30,
(Dollars in millions)	2020		2019		Variance		% Change	2020		2019		Variance		% Change
Gross written premiums	$	591.7	$	592.8	$	(1.1)	-0.2%	$	1,971.8	$	1,798.1	$	173.7	9.7%
Net written premiums		429.6		428.5		1.1	0.3%		1,462.9		1,326.7		136.2	10.3%

Premiums earned	$	461.7	$	431.9	$	29.9	6.9%	$	1,424.8	$	1,222.4	$	202.4	16.6%
Incurred losses and LAE		340.9		297.4		43.6	14.7%		1,032.9		801.7		231.2	28.8%
Commission and brokerage		57.3		60.2		(2.9)	-4.8%		182.9		169.6		13.3	7.8%
Other underwriting expenses		73.7		65.3		8.4	12.9%		212.6		177.6		35.0	19.7%
Underwriting gain (loss)	$	(10.2)	$	9.0	$	(19.2)	-213.2%	$	(3.6)	$	73.5	$	(77.1)	104.9%

							Point Chg							Point Chg
Loss ratio		73.8%		68.9%			4.9		72.5%		65.6%			6.9
Commission and brokerage ratio		12.4%		13.9%			(1.5)		12.8%		13.9%			(1.1)
Other underwriting ratio		16.0%		15.1%			0.9		15.0%		14.5%			0.5
Combined ratio		102.2%		97.9%			4.3		100.3%		94.0%			6.3

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

Premiums.Gross written premiums remained basically flat at $591.7 million for the three months ended September 30, 2020 compared to $592.8 million for the three months ended September 30, 2019. Net written premiums increased by 0.3% to $429.6 million for the three months ended September 30, 2020 compared to $428.5 million for the three months ended September 30, 2019. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance. Premiums earned increased 6.9% to $461.7 million for the three months ended September 30, 2020 compared to $431.9 million for the three months ended September 30, 2019. The change in premiums earned is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Gross written premiums increased by 9.7% to $1,971.8 million for the nine months ended September 30, 2020 compared to $1,798.1 million for the nine months ended September 30, 2019. This increase was related to most lines of business including casualty, property, specialty lines and accident and health. Net written premiums increased by 10.3% to $1,462.9 million for the nine months ended September 30, 2020 compared to $1,326.7 million for the nine months ended September 30, 2019, which is consistent with the change in gross written premiums. Premiums earned increased 16.6% to $1,424.8 million for the nine months ended September 30, 2020 compared to $1,222.4 million for the nine months ended September 30, 2019. The change in premiums earned is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Incurred Losses and LAE.The following tables present the incurred losses and LAE for the Insurance segment for the periods indicated.

	Three Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	303.7	65.8%		$	-	0.0%		$	303.7	65.8%
Catastrophes		37.5	8.1%			(0.2)	-0.1%			37.3	8.1%
Total segment	$	341.2	73.9%		$	(0.2)	-0.1%		$	340.9	73.8%
2019
Attritional	$	289.7	67.1%		$	1.3	0.3%		$	291.0	67.4%
Catastrophes		4.0	0.9%			2.3	0.5%			6.3	1.5%
Total segment	$	293.7	68.0%		$	3.7	0.9%		$	297.4	68.9%
Variance 2020/2019
Attritional	$	14.0	(1.3)	pts	$	(1.3)	(0.3)	pts	$	12.7	(1.6)	pts
Catastrophes		33.5	7.2	pts		(2.5)	(0.6)	pts		31.0	6.6	pts
Total segment	$	47.5	5.9	pts	$	(3.9)	(1.0)	pts	$	43.6	4.9	pts

	Nine Months Ended September 30,
	Current		Ratio %/		Prior		Ratio %/		Total		Ratio %/
(Dollars in millions)	Year		Pt Change		Years		Pt Change		Incurred		Pt Change
2020
Attritional	$	976.0	68.5%		$	(0.3)	0.0%		$	975.6	68.5%
Catastrophes		58.0	4.1%			(0.7)	0.0%			57.3	4.0%
Total segment	$	1,034.0	72.6%		$	(1.0)	-0.1%		$	1,032.9	72.5%
2019
Attritional	$	810.6	66.3%		$	(17.3)	-1.4%		$	793.2	64.9%
Catastrophes		4.0	0.3%			4.5	0.4%			8.5	0.7%
Total segment	$	814.6	66.6%		$	(12.9)	-1.1%		$	801.7	65.6%
Variance 2020/2019
Attritional	$	165.4	2.2	pts	$	17.0	1.4	pts	$	182.4	3.6	pts
Catastrophes		54.0	3.8	pts		(5.2)	(0.4)	pts		48.8	3.3	pts
Total segment	$	219.4	6.0	pts	$	11.9	1.1	pts	$	231.2	6.9	pts

(Some amounts may not reconcile due to rounding.)

Three Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 133.6 87.7 % $ (1.2 ) -0.8 % $ 132.4 86.9 %
Catastrophes 109.6 72.0 % 0.1 0.1 % 109.7 72.1 %
Total segment $ 243.2 159.7 % $ (1.1 ) -0.7 % $ 242.1 159.0 %

2016

Attritional $ 121.4 67.8 % $ 1.1 0.6 % $ 122.5 68.4 %
Catastrophes - 0.0 % - 0.0 % - 0.0 %
Total segment $ 121.4 67.8 % $ 1.1 0.6 % $ 122.5 68.4 %

Variance 2017/2016

Attritional $ 12.2 19.9 pts $ (2.3 ) (1.4 ) pts $ 9.9 18.5 pts
Catastrophes 109.6 72.0 pts 0.1 0.1 pts 109.7 72.1 pts
Total segment $ 121.8 91.9 pts $ (2.2 ) (1.3 ) pts $ 119.6 90.6 pts

Nine Months Ended September 30,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2017

Attritional $ 321.2 71.4 % $ 6.5 1.4 % $ 327.7 72.8 %
Catastrophes 114.4 25.5 % (0.1 ) 0.0 % 114.3 25.5 %
Total segment $ 435.6 96.9 % $ 6.4 1.4 % $ 442.0 98.3 %

2016

Attritional $ 343.8 77.1 % $ 5.6 1.3 % $ 349.4 78.4 %
Catastrophes 16.7 3.7 % (0.2 ) 0.0 % 16.5 3.7 %
Total segment $ 360.5 80.8 % $ 5.4 1.3 % $ 366.0 82.1 %

Variance 2017/2016

Attritional $ (22.6 ) (5.7 ) pts $ 0.9 0.1 pts $ (21.7 ) (5.6 ) pts
Catastrophes 97.7 21.8 pts 0.1 - pts 97.8 21.8 pts
Total segment $ 75.1 16.1 pts $ 1.0 0.1 pts $ 76.0 16.2 pts

(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE increased by ~~97.6%~~14.7% to ~~$242.1~~$340.9 million for the three months ended September 30, ~~201~~72020 compared to ~~$122.5~~$297.4 million for the three months ended September 30, ~~201~~6,2019, mainly due to an increase of ~~$109.6~~$14.0 million in current year attritional losses, resulting from $4.0 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned and an increase of $33.5 million in current year catastrophe ~~losses and an increase~~losses. The $37.5 million of ~~$12.2 million in current year attritional losses.~~ ~~The~~ current year catastrophe losses ~~of $109.6 million~~ for the three months ended September 30, ~~201~~72020, related to Hurricane ~~Harvey~~Sally ($~~50.8~~16.0 million), Hurricane ~~Irma~~Laura ($~~50.1~~15.0 million), the Calgary storms in Canada ($2.5 million), Hurricane Isaias ($2.0 million) and ~~Hurricane Maria~~the Derecho storms ($~~8.7~~2.0 million). ~~There were no~~The current year catastrophe losses of $4.0 million for the three months ended September 30, ~~2016.~~2019, related to Hurricane Dorian ($4.0 million).

Incurred losses and LAE increased by ~~20.8%~~28.8% to ~~$442.0~~$1,032.9 million for the nine months ended September 30, ~~201~~72020 compared to ~~$366.0~~$801.7 million for the nine months ended September 30, ~~201~~6,2019, mainly due to an increase of ~~$97.7 million in current catastrophe losses, partially offset by a decrease of $22.6~~$165.4 million in current year attritional ~~losses. The decrease in current year attritional~~ losses, ~~primarily related to changes in~~resulting from $32.2 million of losses from the ~~mix of business~~COVID-19 pandemic and the impact of ~~affiliated quota share agreements.~~ ~~The~~the increase in premiums earned, an increase of $54.0 million in current year catastrophe losses and $17.0 million less of ~~$114.4 million~~ ~~for the nine months ended September 30, 2017 primarily related~~unfavorable development on prior years attritional losses in 2020 compared to ~~Hurricane Harvey ($50.8 million), Hurricane Irma ($50.1 million), Hurricane Maria ($8.7 million) and the 2017 US Midwest Storms ($4.8 million).~~ 2019. The ~~$16.7~~$58.0 million of current year catastrophe losses for the nine months ended September 30, ~~2016 were due~~2020, primarily related to ~~the 2016 U.S. storms~~Hurricane Sally ($16.0 million), Hurricane Laura ($15.0 million), the U.S. Civil Unrest ($15.0 million), the Nashville tornadoes ($5.5 million), the Calgary storms in Canada ($2.5

million), the Derecho storms ($2.0 million) and Hurricane Isaias ($2.0 million). The current year catastrophe losses of $4.0 million for the ~~Fort McMurray Canada wildfire~~nine months ended September 30, 2019, related to Hurricane Dorian ($~~1.7~~4.0 million).

Segment Expenses.Commission and brokerage decreased to ~~($22.3)~~$57.3 million for the three months ended September 30, ~~201~~72020 compared to ~~$4.5~~$60.2 million for the three months ended September 30, ~~201~~6.2019. The three month decrease was primarily due to changes in the mix of business. Commission and brokerage ~~decreased~~increased to ~~($40.1)~~$182.9 million for the nine months ended September 30, ~~201~~2020 7compared to ~~($10.9)~~$169.6 million for the nine months ended September 30, ~~201~~20196. The ~~decreases were mainly~~nine month increase was due to the impact of ~~changes~~the increase in ~~the mix of business and the impacts from affiliated quota share agreements.~~

premiums earned. Segment other underwriting expenses ~~decreased~~increased to ~~$37.4~~$73.7 million for the three months ended September 30, ~~201~~7 2020 compared to ~~$40.7~~$65.3 million for the three months ended September 30, ~~201~~6. 2019. Segment other underwriting expenses ~~decreased~~increased to ~~$114.9~~$212.6 million for the nine months ended September 30, ~~201~~2020 7 compared to ~~$116.8~~$177.6 million for the nine months ended September 30, ~~201~~2019. ~~6. These decreases~~The increases were mainly due to ~~lower variable compensation costs.~~the impact of the increase in premiums earned and expenses related to the continued build out of the insurance business.

Market Sensitive Instruments.

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

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

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

Interest Rate ~~Risk.~~Risk. Our ~~$10.2~~$13.8 billion investment portfolio, at September 30, ~~2017,~~2020, is principally comprised of fixed maturity securities, which are generally subject to interest rate risk and some foreign currency exchange rate risk, and some equity securities, which are subject to price fluctuations and some foreign exchange rate risk. The overall economic impact of the foreign exchange risks on the investment portfolio is partially mitigated by changes in the dollar value of foreign currency denominated liabilities and their associated income statement impact.

Interest rate risk is the potential change in value of the fixed maturity securities portfolio, including short-term investments, from a change in market interest rates. In a declining interest rate environment, it includes prepayment risk on the ~~$736.9~~$1,142.6 million of mortgage-backed securities in the ~~$6,039.4~~$8,580.4 million fixed maturity portfolio. Prepayment risk results from potential accelerated principal payments that shorten the average life and thus the expected yield of the security.

The table below displays the potential impact of market value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including ~~$230.0~~$907.9 million of short-term investments) for the period indicated based on upward and downward parallel and immediate 100 and 200 basis point shifts in interest rates. For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price estimate on mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the market value change under the various interest rate change scenarios.

	Impact of Interest Rate Shift in Basis Points
	At September 30, 2020
(Dollars in millions)	-200		-100		-		100		200
Total Market/Fair Value	$	10,079.3	$	9,783.8	$	9,488.3	$	9,192.8	$	8,897.3
Market/Fair Value Change from Base (%)		6.2%		3.1%		0.0%		-3.1%		-6.2%
Change in Unrealized Appreciation
After-tax from Base ($)	$	466.9	$	233.4	$	-	$	(233.4)	$	(466.9)

Impact of Interest Rate Shift in Basis Points
At September 30, 2017
(Dollars in millions) -200 -100 0 100 200
Total Market/Fair Value $ 6,634.4 $ 6,454.2 $ 6,269.4 $ 6,077.2 $ 5,883.9
Market/Fair Value Change from Base (%) 5.8 % 2.9 % 0.0 % -3.1 % -6.1 %
Change in Unrealized Appreciation
After-tax from Base ($) $ 237.3 $ 120.1 $ - $ (124.9 ) $ (250.6 )

We had ~~$9,969.1~~$11,042.0 million and ~~$8,331.3~~$10,209.5 million of gross reserves for losses and LAE as of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively. These amounts are recorded at their nominal value, as opposed to present value, which would reflect a discount adjustment to reflect the time value of money. Since losses are paid out over a period of time, the present value of the reserves is less than the nominal value. As interest rates rise, the present value of the reserves decreases and, conversely, as interest rates decline, the present value increases. These movements are the opposite of the interest rate impacts on the fair value of investments. While the difference between present value and nominal value is not reflected in our financial statements, our financial results will include investment income over time from the investment portfolio until the claims are paid. Our loss and loss reserve obligations have an expected duration that is reasonably consistent with our fixed income portfolio.

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

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

	Impact of Percentage Change in Equity Fair/Market Values
	At September 30, 2020
(Dollars in millions)	-20%		-10%		0%		10%		20%
Fair/Market Value of the Equity Portfolio	$	808.2	$	909.2	$	1,010.3	$	1,111.3	$	1,212.3
After-tax Change in Fair/Market Value		(159.6)		(79.8)		-		79.8		159.6

Impact of Percentage Change in Equity Fair/Market Values
At September 30, 2017
(Dollars in millions) -20% -10% 0% 10% 20%
Fair/Market Value of the Equity Portfolio $ 798.5 $ 898.3 $ 998.1 $ 1,097.9 $ 1,197.7
After-tax Change in Fair/Market Value (129.7 ) (64.9 ) - 64.9 129.7

Foreign Currency Risk. Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S. ~~("foreign"~~(“foreign”) operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each foreign operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these foreign operations are the Singapore and Canadian Dollars. We mitigate foreign exchange exposure by generally matching the currency and duration of our assets to our corresponding operating liabilities. In accordance with FASB guidance, the impact on the market value of available for sale fixed maturities due to changes in foreign currency exchange rates, in relation to functional currency, is reflected as part of other comprehensive income. Conversely, the impact of changes in foreign currency exchange rates, in relation to functional currency, on other assets and liabilities is reflected through net income as a component of other income (expense). In addition, we translate the assets, liabilities and income of non-U.S. dollar functional currency legal entities to the U.S. dollar. This translation amount is reported as a component of other comprehensive income.

SAFE HARBOR DISCLOSURE

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

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

PART II

ITEM 1. LEGAL PROCEEDINGS

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

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

ITEM 1A. RISK FACTORS

Other than as set forth below, there have been no material ~~changes.~~changes from the risk factors previously disclosed in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2019.

The continuing COVID-19 pandemic has adversely affected, and may materially and adversely affect, our results of operations, financial position and liquidity in the future.

The ongoing COVID-19 pandemic, including the related impact on the U.S. and global economies, has adversely affected our results of operations. We expect the pandemic and its impact on our business to continue and potentially even worsen, but we cannot predict the magnitude or duration of its continued impact, particularly given the great uncertainties associated with COVID-19, including regarding the reopening of the U.S. and global economies and the recovery from its economic and other effects. The full impact of COVID-19 on our results of operations, financial position and liquidity is not yet known, and likely will not be known for some time, but includes the following:

Claim Losses Related to COVID-19 May Exceed Reserves: We have established reserves for COVID-19-related losses. Our reserves represent management’s best estimate of what the settlement and claims administration will cost for claims that have occurred, whether reported or unreported. Given the great uncertainties associated with COVID-19 and its impact and the limited information upon which our current assumptions and assessments have been made, our preliminary reserves and the underlying estimated level of claim losses and costs arising from COVID-19 may materially change.

Adverse Legislative and Regulatory Action: Legislative and regulatory initiatives taken or which may be taken in response to COVID-19 may adversely affect us. For example, our business may be subject to, certain initiatives, including, but not limited to: legislative and regulatory action that seeks to retroactively mandate coverage for losses which our insurance policies would not otherwise cover and which were not priced to cover; actions prohibiting us from cancelling insurance policies in accordance with our policy terms or non-renewing policies at their natural expiration; and/or orders to provide premium refunds, grant extended grace periods for premium payments, and provide extended time to pay past due premiums. Any such action would likely increase both our underwriting losses and our expenses and any legal challenges to any such action could take years to resolve.

Reduction in Premiums: The demand for insurance is significantly influenced by general economic conditions. Consequently, reduced economic activity relating to the COVID-19 pandemic is likely to decrease demand for our insurance products and services and negatively impact our premium volumes (and, in certain cases, may result in return of premiums due to a decrease in exposures). This may continue for an indefinite period, with the magnitude of the impact impossible to predict.

Investments: Further disruptions in global financial markets due to the continuing impact of COVID-19 could cause us to incur additional unrealized and/or realized investment losses, including credit impairments in our fixed maturity portfolio. In addition, the economic uncertainty resulting from COVID-19 may result in a decline in interest rates, which may negatively impact our future net investment income.

Credit Risk: As credit risk is generally a function of the economy, we face greater credit risk from our policyholders, independent agents and brokers in connection with the payment and remittance of premiums as a result of the economic conditions caused by COVID-19. Similarly, our credit risk related to the reimbursement of deductibles from policyholders and in connection with reinsurance recoverables has increased.

Operational Disruptions and Costs: Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our agents, brokers, suppliers or other third party service providers are unable to continue to work because of illness, government directives or otherwise. In addition, our agents, brokers, suppliers and other third party service providers, which we rely on for key aspects of our operations, are subject to risks and uncertainties related to the COVID-19 pandemic, which may interfere with their ability to fulfill their respective commitments and responsibilities to us in a timely manner and in accordance with the agreed-upon terms. In response to the COVID-19 pandemic, we have implemented remote working policies which have resulted in disruptions to our business routines, heightened risk to cybersecurity attacks and data security incidents and a greater dependency on internet and telecommunication access and capabilities.

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

None.

~~None.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

~~None.~~

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~None.~~

ITEM 6. EXHIBITS

Exhibit Index:

Exhibit No.	Description

31.1	Section 302 Certification of ~~Dominic J. Addesso~~	Juan C. Andrade

31.2	Section 302 Certification of ~~Craig Howie~~	Mark Kociancic

32.1	Section 906 Certification of ~~Dominic J. Addesso~~Juan C. Andrade and ~~Craig Howie~~	Mark Kociancic

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Calculation Linkbase

101.DEF	XBRL Taxonomy Extension Definition Linkbase

101.LAB	XBRL Taxonomy Extension Labels Linkbase

101.PRE	XBRL Taxonomy Extension Presentation Linkbase

Everest Reinsurance Holdings, Inc.

Signatures

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


	Everest Reinsurance Holdings, Inc.
~~(Registrant)~~	(Registrant)


	/S/ ~~CRAIG HOWIE~~MARK KOCIANCIC
~~Craig Howie~~	Mark Kociancic
	Executive Vice President and
		Chief Financial Officer

	(Duly Authorized Officer and Principal Financial Officer)



Dated: November 16, 2020

~~Dated: November 14, 2017~~

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

Large accelerated filer☐			Accelerated filer	☐
Non-accelerated ~~filer~~ Filer ☑	X		Smaller reporting company	☐
~~(Do not check if smaller reporting company)~~		Emerging growth company	☐

		Number of Shares Outstanding
Class		At November 1, ~~2017~~2020
Common Shares, $0.01 par value		1,000

			Page
~~Item 1.~~				~~Financial Statements~~	PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets at September 30, ~~2017~~2020 (unaudited) and December 31, 2019	1
		~~December 31, 2016 (unaudited)~~	1

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the
		three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (unaudited)	2

	Consolidated Statements of Changes in ~~Stockholder's~~Stockholder’s Equity for the three and
		nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (unaudited)	3

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited)	4
		~~September 30, 2017 and 2016 (unaudited)~~	4

	Notes to Consolidated Interim Financial Statements (unaudited)		5

Item 2.	~~Management's~~ Management’s Discussion and Analysis of Financial Condition and
		Results of Operation	34 35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51

Item 4.	Controls and Procedures	51


~~Item 1.~~			~~Legal Proceedings~~	51 PART II

~~Item 1A.~~			~~Risk Factors~~	52 OTHER INFORMATION

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52 53

Item 3.	Defaults Upon Senior Securities	52 53

Item 4.	Mine Safety Disclosures	52 53

Item 5.	Other Information	52 53

Item 6.	Exhibits	52 54

	September 30,			December 31,
(Dollars in thousands, except par value per share)	2017			2016
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value	$	6,039,361		$	5,970,496
(amortized cost: 2017, $5,974,256; 2016, $5,910,494)
Equity securities - available for sale, at fair value		998,071			887,800
Short-term investments		229,999			306,286
Other invested assets (cost: 2017, $736,566; 2016, $613,680)		739,486			613,740
Other invested assets, at fair value		1,922,402			1,766,626
Cash		302,331			297,794
Total investments and cash		10,231,650			9,842,742
Note receivable - affiliated		250,000			250,000
Accrued investment income		45,575			45,323
Premiums receivable		1,564,491			1,128,639
Reinsurance receivables - unaffiliated		1,116,370			887,657
Reinsurance receivables - affiliated		4,137,998			3,686,130
Funds held by reinsureds		204,989			190,421
Deferred acquisition costs		65,519			68,621
Prepaid reinsurance premiums		1,115,344			781,384
Other assets		411,425			202,519
TOTAL ASSETS	$	19,143,361		$	17,083,436

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	9,969,148		$	8,331,288
Unearned premium reserve		1,628,717			1,312,386
Funds held under reinsurance treaties		125,463			110,836
Losses in the course of payment		193,948			82,915
Commission reserves		24,932			52,037
Other net payable to reinsurers		1,158,259			815,298
4.868% Senior notes due 6/1/2044		396,804			396,714
6.6% Long term notes due 5/1/2067		236,536			236,462
Accrued interest on debt and borrowings		7,564			3,537
Income taxes		(29,533	)		148,940
Unsettled securities payable		39,660			27,121
Other liabilities		224,219			267,349
Total liabilities		13,975,717			11,784,883

Commitments and Contingencies (Note 7)

STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized;
1,000 shares issued and outstanding (2017 and 2016)		-			-
Additional paid-in capital		387,772			387,567
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $9,405 at 2017 and ($19,549) at 2016		17,459			(36,315	)
Retained earnings		4,762,413			4,947,301
Total stockholder's equity		5,167,644			5,298,553
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	19,143,361		$	17,083,436

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

CONSOLIDATED BALANCE SHEETS	March 31, 2017
	As Previously		Impact of
	Reported		Revisions			As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs	$	62,308	$	(4,994	)	$	57,314
TOTAL ASSETS	$	17,587,840	$	(4,994	)	$	17,582,846

LIABILITIES:
Other net payable to reinsurers	$	832,307	$	(41,746	)	$	790,561
Income taxes		223,629		5,625			229,254
Total liabilities		12,139,623		(36,121	)		12,103,502

STOCKHOLDERS EQUITY:
Retained earnings		5,085,352		31,127			5,116,479
Total stockholder's equity		5,448,217		31,127			5,479,344
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	17,587,840	$	(4,994	)	$	17,582,846

CONSOLIDATED BALANCE SHEETS	December 31, 2016							December 31, 2015
	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands, except par value per share)
ASSETS:
Deferred acquisition costs	$	73,924	$	(5,303	)	$	68,621	$	92,651	$	(6,249	)	$	86,402
TOTAL ASSETS	$	17,088,739	$	(5,303	)	$	17,083,436	$	16,695,203	$	(6,249	)	$	16,688,954

LIABILITIES:
Other net payable to reinsurers	$	860,391	$	(45,093	)	$	815,298	$	1,225,260	$	(37,480	)	$	1,187,780
Income taxes		142,143		6,797			148,940		68,024		4,132			72,156
Total liabilities		11,823,179		(38,296	)		11,784,883		11,763,992		(33,348	)		11,730,644

STOCKHOLDERS EQUITY:
Retained earnings		4,914,308		32,993			4,947,301		4,618,558		27,099			4,645,657
Total stockholder's equity		5,265,560		32,993			5,298,553		4,931,211		27,099			4,958,310
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	17,088,739	$	(5,303	)	$	17,083,436	$	16,695,203	$	(6,249	)	$	16,688,954

CONSOLIDATED STATEMENTS OF OPERATIONS	Year Ended December 31, 2016							Year Ended December 31, 2015
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	289,982	$	(8,558	)	$	281,424	$	315,069	$	(2,744	)	$	312,325
Total claims and expenses		1,928,940		(8,558	)		1,920,382		1,892,062		(2,744	)		1,889,318

INCOME (LOSS) BEFORE TAXES		390,433		8,558			398,991		604,542		2,744			607,286
Income tax expense (benefit)		94,683		2,664			97,347		191,889		3,007			194,896

NET INCOME (LOSS)	$	295,750	$	5,894		$	301,644	$	412,653	$	(263	)	$	412,390

COMPREHENSIVE INCOME (LOSS)	$	321,571	$	5,894		$	327,465	$	345,998	$	(263	)	$	345,735

CONSOLIDATED STATEMENTS OF OPERATIONS	Year Ended December 31, 2014							Three Months Ended March 31, 2017
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	339,402	$	(427	)	$	338,975	$	49,470	$	3,037		$	52,507
Total claims and expenses		1,930,749		(427	)		1,930,322		411,543		3,037			414,580

INCOME (LOSS) BEFORE TAXES		657,688		427			658,115		247,984		(3,037	)		244,947
Income tax expense (benefit)		203,562		1,125			204,687		76,940		(1,171	)		75,769

NET INCOME (LOSS)	$	454,126	$	(698	)	$	453,428	$	171,044	$	(1,866	)	$	169,178

COMPREHENSIVE INCOME (LOSS)	$	370,997	$	(698	)	$	370,299	$	182,587	$	(1,866	)	$	180,721

CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended September 30, 2016							Nine Months Ended September 30, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	85,563	$	(2,785	)	$	82,778	$	226,511	$	(6,959	)	$	219,552
Total claims and expenses		462,009		(2,785	)		459,224		1,377,175		(6,959	)		1,370,216

INCOME (LOSS) BEFORE TAXES		95,943		2,785			98,728		249,064		6,959			256,023
Income tax expense (benefit)		21,145		1,280			22,425		66,990		2,368			69,358

NET INCOME (LOSS)	$	74,798	$	1,505		$	76,303	$	182,074	$	4,591		$	186,665

COMPREHENSIVE INCOME (LOSS)	$	74,465	$	1,505		$	75,970	$	299,559	$	4,591		$	304,150

CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended June 30, 2016							Six Months Ended June 30, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of					As Previously		Impact of
	Reported		Revisions			As Revised		Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	72,126	$	(1,717	)	$	70,409	$	140,948	$	(4,174	)	$	136,774
Total claims and expenses		479,860		(1,717	)		478,143		915,166		(4,174	)		910,992

INCOME (LOSS) BEFORE TAXES		101,332		1,717			103,049		153,121		4,174			157,295
Income tax expense (benefit)		32,982		695			33,677		45,845		1,088			46,933

NET INCOME (LOSS)	$	68,350	$	1,022		$	69,372	$	107,276	$	3,086		$	110,362

COMPREHENSIVE INCOME (LOSS)	$	124,381	$	1,022		$	125,403	$	225,094	$	3,086		$	228,180

CONSOLIDATED STATEMENTS OF OPERATIONS	Three Months Ended March 31, 2016
AND COMPREHENSIVE INCOME (LOSS):	As Previously		Impact of
	Reported		Revisions			As Revised
(Dollars in thousands)
CLAIMS AND EXPENSES:
Commission, brokerage, taxes and fees	$	68,822	$	(2,457	)	$	66,365
Total claims and expenses		435,306		(2,457	)		432,849

INCOME (LOSS) BEFORE TAXES		51,789		2,457			54,246
Income tax expense (benefit)		12,863		393			13,256

NET INCOME (LOSS)	$	38,926	$	2,064		$	40,990

COMPREHENSIVE INCOME (LOSS)	$	100,713	$	2,064		$	102,777

CONSOLIDATED STATEMENTS OF	Three Months Ended March 31, 2016
CHANGES IN STOCKHOLDER'S EQUITY	As Previously		Impact of
	Reported		Revisions		As Revised

(Dollars in thousands, except share amounts)
RETAINED EARNINGS:
Balance, beginning of period	$	4,618,558	$	27,099	$	4,645,657
Net income (loss)		38,926		2,064		40,990
Balance, end of period		4,657,484		29,163		4,686,647
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	5,036,717	$	29,163	$	5,065,880

	At September 30, 2017
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	657,018	$	2,088	$	(3,220	)	$	655,886	$	-
Obligations of U.S. states and political subdivisions		652,525		24,061		(4,744	)		671,842		-
Corporate securities		2,213,498		38,058		(11,965	)		2,239,591		695
Asset-backed securities		153,400		451		(62	)		153,789		-
Mortgage-backed securities
Commercial		59,311		334		(622	)		59,023		-
Agency residential		683,178		1,904		(7,252	)		677,830		-
Non-agency residential		55		7		-			62		-
Foreign government securities		520,431		19,038		(7,996	)		531,473		-
Foreign corporate securities		1,034,840		25,601		(10,576	)		1,049,865		374
Total fixed maturity securities	$	5,974,256	$	111,542	$	(46,437	)	$	6,039,361	$	1,069

	At December 31, 2016
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	693,005	$	2,509	$	(4,434	)	$	691,080	$	-
Obligations of U.S. states and political subdivisions		723,938		18,016		(11,970	)		729,984		-
Corporate securities		2,119,324		50,665		(15,786	)		2,154,203		4,868
Asset-backed securities		136,826		330		(129	)		137,027		-
Mortgage-backed securities
Commercial		75,435		510		(452	)		75,493		-
Agency residential		721,772		2,365		(8,993	)		715,144		-
Non-agency residential		76		12		-			88		-
Foreign government securities		495,572		22,088		(10,383	)		507,277		-
Foreign corporate securities		944,546		30,015		(14,361	)		960,200		175
Total fixed maturity securities	$	5,910,494	$	126,510	$	(66,508	)	$	5,970,496	$	5,043

	Nine Months Ended			Twelve Months Ended
	September 30,			At December 31,
(Dollars in thousands)	2017			2016
Gross reserves at beginning of period	$	8,331,288		$	7,940,720
Less reinsurance recoverables		(4,199,791	)		(3,875,073	)
Net reserves at beginning of period		4,131,497			4,065,647

Incurred related to:
Current year		1,918,055			1,441,962
Prior years		453			(91,682	)
Total incurred losses and LAE		1,918,508			1,350,280

Paid related to:
Current year		441,480			400,489
Prior years		547,176			892,207
Total paid losses and LAE		988,656			1,292,696

Foreign exchange/translation adjustment		19,084			8,266

Net reserves at end of period		5,080,433			4,131,497
Plus reinsurance recoverables		4,888,715			4,199,791
Gross reserves at end of period	$	9,969,148		$	8,331,288

	Three Months Ended September 30, 2017								Nine Months Ended September 30, 2017
	Corporate		Foreign						Corporate		Foreign
(Dollars in thousands)	Securities		Corporate			Total			Securities		Corporate			Total
Beginning balance	$	86,140	$	3,151		$	89,291		$	65,197	$	2,538		$	67,735
Total gains or (losses) (realized/unrealized)
Included in earnings		283		210			493			1,208		314			1,522
Included in other comprehensive income (loss)		18		(230	)		(212	)		161		(230	)		(69	)
Purchases, issuances and settlements		15,628		-			15,628			35,503		509			36,012
Transfers in and/or (out) of Level 3		-		-			-			-		-			-
Ending balance	$	102,069	$	3,131		$	105,200		$	102,069	$	3,131		$	105,200

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

(Some amounts may not reconcile due to rounding.)

	At September 30,		At December 31,
(Dollars in thousands)	2017		2016
The Prudential	$	144,331	$	146,507
Unaffiliated life insurance company		33,769		33,860

	Three Months Ended					Nine Months Ended
U.S. Reinsurance	September 30,					September 30,
(Dollars in thousands)	2017			2016		2017			2016
Gross written premiums	$	908,346		$	654,770	$	1,962,297		$	1,597,006
Net written premiums		295,645			327,242		649,883			711,700

Premiums earned	$	242,350		$	249,203	$	652,953		$	709,064
Incurred losses and LAE		678,926			137,245		919,107			363,567
Commission and brokerage		31,698			48,107		115,243			147,968
Other underwriting expenses		12,094			14,265		40,623			39,856
Underwriting gain (loss)	$	(480,368	)	$	49,586	$	(422,020	)	$	157,673

	Three Months Ended					Nine Months Ended
International	September 30,					September 30,
(Dollars in thousands)	2017			2016		2017			2016
Gross written premiums	$	363,186		$	353,195	$	975,296		$	939,851
Net written premiums		130,180			141,295		345,387			353,449

Premiums earned	$	123,915		$	128,358	$	355,366		$	372,816
Incurred losses and LAE		410,543			41,830		557,416			206,672
Commission and brokerage		25,101			30,193		72,426			82,443
Other underwriting expenses		8,241			9,219		26,293			25,011
Underwriting gain (loss)	$	(319,970	)	$	47,116	$	(300,769	)	$	58,690