UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM
10-Q

☑
QUARTERLY REPORT PURSUANT TO SECTION
Quarterly Report Pursuant to
Section 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF of the Securities Exchange Act of 1934

For the quarterly period ended
FOR THE QUARTERLY PERIOD ENDED:
March 31, 2023
☐
Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission file number
1-14527
September 30, 2017
Commission file number:
1-14527

EVEREST REINSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware22-3263609
Delaware
22-3263609
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
100 Everest Way
Warren
,
incorporation or organization)
(I.R.S. Employer
Identification No.)
477 Martinsville Road
Post Office Box 830
Liberty Corner, New Jersey 07938-0830
(908) 604-300007059

(Address including zip code, and telephoneof principal executive offices)
(Zip Code)
(
908
)
604-3000
(Registrant’s Telephone number,
including area code,code)
of registrant's principal executive office)Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate
by
check
mark
whether
the
registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities Exchange Act of
1934 during the preceding
12 months (or
for such shorter period
that the registrant
was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES
YESXNO

☑
NO
☐
Indicate by check mark whether the
registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be
submitted and posted
pursuant to
Rule 405
of Regulation
S-T (§232.405
of this
chapter) during
the preceding
12 months (or
(or for
such shorter
period
that the registrant was required to
submit and post such files).

YES
YESXNO

☑
NO
☐
Indicate by check mark
whether the registrant
is a large
accelerated filer,
an accelerated filer,
a non-accelerated filer,
a smaller
reporting
company
or
an
emerging
growth
company.
See
the
definitions
of
“large
accelerated
filer,”
“accelerated
filer,”
“smaller reporting company or an emergingcompany” and “emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company"company” in Rule 12b-2 of the Exchange
Act.

Large accelerated filer
Large accelerated filerAccelerated filer
☐
Accelerated filer
☐
Non-accelerated Filer
☑
Smaller reporting company
☐
Emerging growth company
☐
If an emerging
growth company,
indicate by check
 
Non-accelerated filer
X
Smaller reporting company
(Do not check if smaller reporting company)
Emerging  growth company


Indicate by check mark if the
registrant is an emerging growth company and
has elected not
to use the
extended transition
period
for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange act.

YES
YESNOX

☐
NO
☑
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

YES
YESNOX

☐
NO
☑
Indicate the number of shares outstanding of each of the issuer'sissuer’s classes of common stock,
as of the latest practicable date.

Number of Shares Outstanding
Number of Shares Outstanding
Class
At May 1, 2023
Common Shares, $0.01 par value
Class
At November 1, 2017
Common Shares, $0.01 par value1,000

The Registrant
meets the
conditions set
forth
in General
Instruction
H (1)(a)
and (b)
of Form
10-Q and
is therefore
filing this
form with the reduced disclosure format permitted by General Instruction
H of Form 10-Q.

EVEREST REINSURANCE HOLDINGS, INC.

Table of Contents
Form 10-Q


Page
PART I

FINANCIAL INFORMATION

Item 1.
Item 1.Financial Statements
Consolidated Balance Sheets at September 30, 2017 (unaudited) and
December 31, 2016 (unaudited)1
Consolidated Statements of Operations and Comprehensive Income (Loss) for the
three and nine months ended September 30, 2017 and 2016 (unaudited)2
Consolidated Statements of Changes in Stockholder's Equity for the three and
nine months ended September 30, 2017 and 2016 (unaudited)3
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2017 and 2016 (unaudited)4
Notes to Consolidated Interim Financial Statements (unaudited)5
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operation34
Item 3.Quantitative and Qualitative Disclosures About Market Risk51
Item 4.Controls and Procedures51

Financial Statements
Consolidated Balance Sheets as of March
31, 2023 (unaudited) and
December 31, 2022
1
Consolidated Statements of Operations
and Comprehensive Income (Loss) for
the three months ended March 31, 2023 and 2022 (unaudited)
2
Consolidated Statements of Changes
in Stockholder’s Equity for the three
months ended March 31, 2023 and 2022 (unaudited)
3
Consolidated Statements of Cash
Flows for the three months ended March
31,
2023 and 2022 (unaudited)
4
Notes to Consolidated Interim
Financial Statements (unaudited)
5
Item 2.
Management’s Discussion and Analysis of
Financial Condition and Results of
Operation
31
Item 3.
Quantitative and Qualitative
Disclosures About Market Risk
44
Item 4.
Controls and Procedures
44
PART II

OTHER INFORMATION

Item 1.
Item 1.Legal Proceedings51
Item 1A.Risk Factors52
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds52
Item 3.Defaults Upon Senior Securities52
Item 4.Mine Safety Disclosures52
Item 5.Other Information52
Item 6.Exhibits52
Legal Proceedings
44
Item 1A.
Risk Factors
44
Item 2.
Unregistered Sales of Equity
Securities and Use of Proceeds
44
Item 3.
Defaults Upon Senior Securities
44
Item 4.
Mine Safety Disclosures
45
Item 5.
Other Information
45
Item 6.
Exhibits
45
1
EVEREST REINSURANCE HOLDINGS, INC.
CONSOLIDATED
BALANCE SHEETS

March 31,

December 31,

(Dollars in millions, except share amounts and par value per share)
  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.        

2023
2022
(unaudited)
ASSETS:
Fixed maturities - available for sale, at fair value
$
13,414
$
12,671
(amortized cost: 2023, $
14,304
; 2022, $
13,699
,
credit allowances: 2023, $
(56)
; 2022, $
(46)
)
Fixed maturities - held to maturity, at amortized cost
(fair value: 2023, $
787
; 2022, $
793
, net of credit allowances: 2023, $
(9)
; 2022, $
(9)
)
797
811
Equity securities, at fair value
158
194
Other invested assets
2,816
2,754
Other invested assets, at fair value
1,497
1,472
Short-term investments
822
812
Cash
492
481
Total investments and cash
19,996
19,195
Notes receivable - affiliated
840
840
Accrued investment income
170
150
Premiums receivable (net of credit allowances: 2023, $
(22)
; 2022, $
(21)
)
1,805
1,721
Reinsurance recoverables - unaffiliated (net of credit allowances: 2023, $
(21)
; 2022, $
(21)
)
1,896
1,841
Reinsurance recoverables - affiliated
1,896
1,935
Income tax asset, net
207
288
Funds held by reinsureds
297
303
Deferred acquisition costs
499
499
Prepaid reinsurance premiums
446
463
Other assets (net of credit allowances: 2023, $
(7)
; 2022, $
(5)
)
731
722
TOTAL
ASSETS
$
28,783
$
27,957
LIABILITIES:
Reserve for losses and loss adjustment expenses
$
15,315
$
14,977
Unearned premium reserve
3,155
3,177
Funds held under reinsurance treaties
40
43
Other net payable to reinsurers
476
436
Losses in course of payment
72
77
Senior notes
2,348
2,347
Long-term notes
218
218
Borrowings from FHLB
519
519
Accrued interest on debt and borrowings
40
19
Unsettled securities payable
197
1
Other liabilities
401
489
1
Total liabilities
22,781
22,303
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 (2023 and 2022)
-
-
Additional paid-in capital
1,102
1,102
Accumulated other comprehensive income (loss), net of deferred income
tax expense (benefit) of $
(191)
at 2023 and $
(225)
at 2022
(720)
(848)
Retained earnings
5,620
5,400
Total stockholder's equity
6,002
5,654
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
$
28,783
$
27,957
The accompanying notes are an integral part of the consolidated
financial statements.
2
EVEREST REINSURANCE HOLDINGS, INC.
CONSOLIDATED
STATEMENTS
OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

March 31,

(Dollars in millions)
  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.                

2023
2022
(unaudited)
REVENUES:
Premiums earned
$
2,068
$
1,829
Net investment income
190
156
Net gains (losses) on investments:
Credit allowances on fixed maturity securities
(10)
(2)
Gains (losses) from fair value adjustments
27
(215)
Net realized gains (losses) from dispositions
5
(10)
Total net gains (losses) on investments
22
(227)
Other income (expense)
(4)
(9)
Total revenues
2,276
1,749
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
1,394
1,226
Commission, brokerage, taxes and fees
436
385
Other underwriting expenses
139
118
Corporate expenses
6
6
Interest, fees and bond issue cost amortization expense
32
24
Total claims and expenses
2,007
1,758
INCOME (LOSS) BEFORE TAXES
269
(9)
Income tax expense (benefit)
49
(10)
NET INCOME (LOSS)
$
220
$
1
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
112
(394)
Less: reclassification adjustment for realized losses (gains) included in net income (loss)
9
2
Total URA(D) on securities arising during the period
121
(392)
Foreign currency translation adjustments
7
(2)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
-
1
Total benefit plan net gain (loss) for the period
-
1
Total other comprehensive income (loss), net of tax
128
(393)
COMPREHENSIVE INCOME (LOSS)
$
348
$
(392)
The accompanying notes are an integral part of the consolidated
financial statements.
2
3
EVEREST REINSURANCE HOLDINGS, INC.
CONSOLIDATED
STATEMENTS
OF
CHANGES IN STOCKHOLDER'SSTOCKHOLDER’S EQUITY

Three Months Ended

March 31,

(Dollars in millions, except share amounts)
  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.                
2023
2022
(unaudited)
COMMON STOCK (shares outstanding):
Balance, beginning of period
1,000
1,000
Balance, end of period
1,000
1,000
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period
$
1,102
$
1,102
Share-based compensation plans
-
-
Balance, end of period
1,102
1,102
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, beginning of period
(848)
91
Net increase (decrease) during the period
128
(393)
Balance, end of period
(720)
(302)
RETAINED EARNINGS:
Balance, beginning of period
5,400
5,845
Net income (loss)
220
1
Balance, end of period
5,620
5,846
TOTAL STOCKHOLDER'S
EQUITY, END OF PERIOD
$
6,002
$
6,646
The accompanying notes are an integral part of the consolidated financial statements.
3
4
EVEREST REINSURANCE HOLDINGS, INC.
CONSOLIDATED
STATEMENTS
OF CASH FLOWS

Three Months Ended

March 31,

(Dollars in millions)
  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.        

2023
2022
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
220
$
1
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable
(83)
101
Decrease (increase) in funds held by reinsureds, net
3
(15)
Decrease (increase) in reinsurance recoverables
(15)
127
Decrease (increase) in income taxes
47
(12)
Decrease (increase) in prepaid reinsurance premiums
17
12
Increase (decrease) in reserve for losses and loss adjustment expenses
331
288
Increase (decrease) in unearned premiums
(23)
(45)
Increase (decrease) in other net payable to reinsurers
39
8
Increase (decrease) in losses in course of payment
(5)
(134)
Change in equity adjustments in limited partnerships
4
(53)
Distribution of limited partnership income
14
40
Change in other assets and liabilities, net
(149)
(31)
Non-cash compensation expense
9
10
Amortization of bond premium (accrual of bond discount)
(3)
8
Net (gains) losses on investments
(22)
227
Net cash provided by (used in) operating activities
384
531
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale
257
518
Proceeds from fixed maturities sold - available for sale
49
267
Proceeds from fixed maturities matured/called/repaid - held to maturity
28
-
Proceeds from equity securities sold
46
82
Distributions from other invested assets
86
76
Cost of fixed maturities acquired - available for sale
(903)
(1,253)
Cost of fixed maturities acquired - held to maturity
(11)
-
Cost of equity securities acquired
-
(195)
Cost of other invested assets acquired
(163)
(75)
Net change in short-term investments
(5)
123
Net change in unsettled securities transactions
245
29
Net cash provided by (used in) investing activities
(372)
(429)
CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation, net of expense
(9)
(10)
Net cash provided by (used in) financing activities
(9)
(10)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
8
(4)
Net increase (decrease) in cash
11
88
Cash, beginning of period
481
699
Cash, end of period
$
492
$
787
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$
1
$
2
Interest paid
10
2
The accompanying notes are an integral part of the consolidated
financial statements.
4
5
NOTES TO CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(UNAUDITED)

For the Three and Nine Months Ended September 30, 2017March
31, 2023, and 20162022

1.
GENERAL
1.GENERAL

As used in this document, "Holdings" means Everest Reinsurance
Holdings, Inc. (“Holdings”), a Delaware
company and direct
subsidiary of Everest
Underwriting
Group
(Ireland)
Limited ("
(“Holdings Ireland"
Ireland”); "Group" ,
which
is
a
direct
subsidiary
of
Everest
Re
Group,
Ltd.
(“Group”),
through its
subsidiaries, principally
provides property
and casualty
reinsurance and
insurance in
the United
States
of
America
and
internationally.
As
used
in
this
document,
“Company”
means
Holdings
and
its
subsidiaries.
“Bermuda
Re”
means
Everest Re Group, Ltd. (Holdings Ireland's parent); "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" means Holdings and its subsidiaries..

During the third quarter of 2016, the Company established domestic subsidiaries, 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.
2.

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

2.BASIS OF PRESENTATION

The unaudited
consolidated
financial
statements
of the
Company
as
of
March
31,
2023
and
December
31,
2022
and for
the three and nine
months ended September 30, 2017
March 31,
2023 and 2016
2022 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, 20162022 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, 2017March
31, 2023 and 2016
2022 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 2022, 2021
and 20142020, included in the Company's
Company’s most
recent
Form 10-K filing.

The Company
consolidates
the results
of operations
and financial
position of
all voting
interest
entities ("VOE")
in
which
the
Company
has
a
controlling
financial
interest
and
all
variable
interest
entities
("VIE")
in
which
the
Company
is considered
to be
the primary
beneficiary.
The consolidation
assessment,
including the
determination
as to whether an entity qualifies as a VIE or VOE,
depends on the facts and circumstances
surrounding each entity.
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.
All intercompany accounts
and transactions have been eliminated.

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

Application of Recently Issued Accounting
Standard Changes.

The
Company
did
not
adopt
any
new
accounting
standards
that
had
a
material
impact
during
the
three
months
Amortization ended
March
31,
2023. The
Company
assessed
the
adoption
impacts
of Bond Premium.  In recently
issued
accounting
standards
by
the Financial
Accounting Standards
Board on
the Company’s
consolidated
financial statements
as well
as material
updates
to
previous
assessments,
if
any,
from
the
Company’s
Annual
Report
on
Form
10-K
for
the
year
ended
December 31,
2022. There
were no
accounting standards
issued in
the three
months ended
March 2017, FASB issued ASU 2017-08 which outlines guidance on the amortization period for premium on callable debt securities.  The new guidance requires31,
2023, 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. The Company does not expect the adoption of ASU 2017-08
are expected to have
a material impact on its financial statements.Holdings.

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.
5
Disclosure
6
3.
INVESTMENTS
The
tables
below
present
the
amortized
cost,
allowance
for
credit
losses,
gross
unrealized
appreciation/(depreciation) and
fair value 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.fixed maturity securities

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 which outlines guidance on the valuation of and accounting for assets measured at amortized cost and- available for sale debt securities. The carrying value of assets measured at amortized cost will now be presented asfor the amount expected to be collected on the financial asset (amortized cost less an allowance
periods indicated:
At March 31, 2023
Amortized
Allowances for credit losses valuation account).  Available
Unrealized
Unrealized
Fair
(Dollars in millions)
Cost
Credit Losses
Appreciation
Depreciation
Value
Fixed maturity securities – available for sale debt
U.S. Treasury securities will now record credit losses through an allowanceand obligations of
U.S. government agencies and corporations
$
543
$
-
$
-
$
(33)
$
510
Obligations of U.S. states and political
subdivisions
424
-
2
(28)
398
Corporate securities
4,088
(55)
15
(288)
3,759
Asset-backed securities
4,455
-
5
(124)
4,335
Mortgage-backed securities
Commercial
569
-
-
(58)
511
Agency residential
1,853
-
9
(143)
1,719
Non-agency residential
3
-
-
-
3
Foreign government securities
691
-
2
(50)
643
Foreign corporate securities
1,680
(1)
5
(146)
1,537
Total fixed maturity securities - available for credit losses, which will be limitedsale
$
14,304
$
(56)
$
37
$
(871)
$
13,414
(Some amounts may not reconcile due 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 is currently evaluating the impact of the adoption of ASU 2016-13 on its financial statements.rounding.)

Leases.  In February 2016, FASB issued ASU 2016-02 which outlines 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 the impact of 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 on the Company's financial statements.

Debt Issuance Costs. In April 2015, The FASB issued ASU 2015–03, authoritative guidance on the presentation 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
6
At December 31, 2022
Amortized
Allowances for
Unrealized
Unrealized
Fair
(Dollars in millions)
Cost
Credit Losses
Appreciation
Depreciation
Value
Fixed maturity securities – available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations
interim reporting periods.  The Company implemented this guidance effective in the second quarter$
575
$
-
$
-
$
(40)
$
535
Obligations of 2016.  The adoption didU.S. states and political
subdivisions
444
-
2
(32)
413
Corporate securities
3,913
(45)
14
(322)
3,561
Asset-backed securities
4,111
-
5
(165)
3,951
Mortgage-backed securities
Commercial
569
-
-
(59)
509
Agency residential
1,792
-
3
(167)
1,628
Non-agency residential
3
-
-
-
3
Foreign government securities
696
-
2
(61)
637
Foreign corporate securities
1,597
(1)
4
(167)
1,433
Total fixed maturity securities - available for sale
$
13,699
$
(46)
$
30
$
(1,013)
$
12,671
(Some amounts may 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 stepsreconcile due 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.rounding.)

Any issued guidance and pronouncements, other than those directly references 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, 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 of 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.

7
The following tables present line items
show amortized cost,
allowance 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 duecredit
losses, gross unrealized
appreciation/(depreciation)
and fair value of fixed maturity
securities - held 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 
7
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 
8

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 
9

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 
10

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 market value and other-than-temporary impairments ("OTTI") in accumulated other comprehensive income ("AOCI") are as follows for the periods indicated:

  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 
11

  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
At March 31, 2023
Amortized
Allowances for
Unrealized
Unrealized
Fair
(Dollars in AOCI.  Amount includes unrealized gains and losses on impairedmillions)
Cost
Credit Loss
Appreciation
Depreciation
Value
Fixed maturity securities relating– held to changesmaturity
Corporate securities
$
152
$
(2)
$
1
$
(3)
$
148
Asset-backed securities
612
(6)
1
(12)
596
Mortgage-backed securities
Commercial
14
-
-
-
13
Foreign corporate securities
28
(1)
2
-
29
Total fixed maturity securities - held to maturity
$
806
$
(9)
$
4
$
(15)
$
787
(Some amounts may not reconcile due to rounding.)
At December 31, 2022
Amortized
Allowances for
Unrealized
Unrealized
Fair
(Dollars in the value of suchmillions)
Cost
Credit Loss
Appreciation
Depreciation
Value
Fixed maturity securities subsequent– held to the impairment measurement date.maturity

Corporate securities
$
152
$
(2)
$
-
$
(6)
$
144
Asset-backed securities
634
(6)
2
(15)
614
Mortgage-backed securities
Commercial
7
-
-
-
7
Foreign corporate securities
28
(1)
2
-
28
Total fixed maturity securities - held to maturity
$
820
$
(9)
$
3
$
(22)
$
793
(Some amounts may not reconcile due to rounding.)
The amortized cost and marketfair value
of fixed maturity securities
- available for sale are
shown in the following tablestable 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 March 31, 2023
At December 31, 2022
Amortized
Fair
Amortized
Fair
(Dollars in millions)
Cost
Value
Cost
Value
Fixed maturity securities – available for sale
Due in one year or less
$
719
$
694
$
581
$
563
Due after one year through five years
3,687
3,461
3,684
3,429
Due after five years through ten years
1,981
1,787
2,003
1,760
Due after ten years
1,038
905
958
827
Asset-backed securities
4,455
4,335
4,111
3,951
Mortgage-backed securities
Commercial
569
511
569
509
Agency residential
1,853
1,719
1,792
1,628
Non-agency residential
3
3
3
3
Total fixed maturity securities - available for sale
$
14,304
$
13,414
$
13,699
$
12,671
(Some amounts may not reconcile due to rounding.)
The amortized cost
and fair value
of fixed maturity
securities - held to
maturity are shown
in the following table
by
contractual
maturity.
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, 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 

8
At March 31, 2023
At December 31, 2022
Amortized
Fair
Amortized
Fair
(Dollars in millions)
Cost
Value
Cost
Value
Fixed maturity securities – held to maturity:
Due in one year or less
$
5
$
5
$
5
$
5
Due after one year through five years
63
63
63
61
Due after five years through ten years
43
42
43
41
Due after ten years
68
67
68
65
Asset-backed securities
612
596
634
614
Mortgage-backed securities
Commercial
14
13
7
7
Total fixed maturity securities - held to maturity
$
806
$
787
$
820
$
793
(Some amounts may not reconcile due to rounding.)
During
2022,
the
Company
re-designated
a
portion
of
its
fixed
maturity
securities
from
its
fixed
maturity
–
available
for
sale
portfolio
to
its
fixed
maturity
–
held
to
maturity
portfolio.
The
fair
value
of
the
securities
reclassified at the date
of transfer
was $
722
million, net of allowance
for current expected
credit losses, which was
subsequently recognized
as the new amortized cost
basis. As of March 31,
2023, these securities had an
unrealized
loss of $
48
million, which remained
in accumulated other
comprehensive income
on the balance
sheet and will
be
amortized into
income through
an adjustment
to the
yields of
the underlying
securities over
the remaining
life of
the securities.
The changes in net unrealized appreciation (depreciation) Company evaluated
fixed maturity securities
classified as held to maturity
for current expected
credit losses as
of March 31,
2023 utilizing risk
characteristics
of each security,
including credit
rating, remaining
time to maturity,
adjusted
for prepayment
considerations,
and subordination
level, and
applying default
and recovery
rates,
which
include the Company's investments incorporation
of historical credit loss
experience and macroeconomic
forecasts, to
develop an estimate
of current
expected
credit
losses. These
fixed
maturities classified
as held
to maturity
are of
a high
credit quality
and are all rated investment
grade as of March 31, 2023.
The
changes
in
net
unrealized
appreciation
(depreciation)
for
the
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) 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 
12
The Company frequently reviews all
Three Months Ended
March 31,
(Dollars in millions)
2023
2022
Increase (decrease) during the period between the fair value and cost of its fixed
investments carried at fair value, and deferred taxes thereon:
Fixed maturity securities - available for sale securities for declinesand short-term investments
$
153
$
(496)
Change 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 declineunrealized appreciation (depreciation), pre-tax
153
(496)
Deferred tax benefit (expense)
(32)
104
Change in value is temporary or other-than-temporary.  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 value caused by a change in the market, interest rate or foreign exchange environment does not constitute an other-than-temporary impairment, but rather a temporary decline in market value.  Temporary declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss).  If the Company determines that the decline is other-than-temporary 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 the investment is written down to fair value.  The fair value adjustment that is credit or foreign exchange related is recorded in net realized capital gains (losses) in the Company's consolidated statements of operations and comprehensive income (loss). The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss)appreciation (depreciation), net of tax, and is deferred taxes,
included in accumulated other comprehensive income (loss) in the Company's consolidated balance sheets.  The Company's assessments are based on the issuers current and expected future financial position, timeliness with respectstockholder's equity
$
121
$
(392)
(Some amounts may not reconcile due 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.rounding.)

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the 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.

9
The tables
below
display
the aggregate market
fair
value
and gross
unrealized
depreciation
of fixed
maturity and equity
securities
-
available
for
sale, 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, 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)
13
Duration of Unrealized Loss at March 31, 2023 By Security Type
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in millions)
Value
Depreciation
Value
Depreciation
Value
Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
  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)

U.S. government agencies and corporations
$
153
$
(3)
$
348
$
(30)
$
501
$
(33)
Obligations of U.S. states and political subdivisions
113
(6)
119
(22)
232
(28)
Corporate securities
1,255
(52)
1,814
(235)
3,069
(287)
Asset-backed securities
1,614
(37)
1,819
(87)
3,434
(124)
Mortgage-backed securities
Commercial
170
(11)
334
(47)
504
(58)
Agency residential
589
(24)
749
(119)
1,338
(143)
Non-agency residential
-
-
3
-
3
-
Foreign government securities
171
(5)
406
(45)
578
(50)
Foreign corporate securities
478
(18)
905
(128)
1,383
(146)
Total
$
4,543
$
(157)
$
6,499
$
(713)
$
11,042
$
(870)
Securities where an allowance for credit loss was
recorded
2
(1)
1
(1)
3
(1)
Total fixed maturity securities - available for sale
$
4,545
$
(158)
$
6,499
$
(713)
$
11,045
$
(871)
(Some amounts may not reconcile due to rounding.)
Duration of Unrealized Loss at March 31, 2023 By Maturity
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in millions)
Value
Depreciation
Value
Depreciation
Value
Depreciation
Fixed maturity securities - available for sale
Due in one year or less
$
485
$
(7)
$
111
$
(9)
$
596
$
(17)
Due in one year through five years
893
(31)
2,073
(192)
2,966
(223)
Due in five years through ten years
542
(31)
965
(169)
1,507
(200)
Due after ten years
249
(15)
445
(90)
694
(105)
Asset-backed securities
1,614
(37)
1,819
(87)
3,434
(124)
Mortgage-backed securities
759
(36)
1,086
(166)
1,845
(201)
Total
$
4,543
$
(157)
$
6,499
$
(713)
$
11,042
$
(870)
Securities where an allowance for credit loss was
recorded
2
(1)
1
(1)
3
(1)
Total fixed maturity securities - available for sale
$
4,545
$
(158)
$
6,499
$
(713)
$
11,045
$
(871)
(Some amounts may not reconcile due to rounding.)
10
The aggregate market
fair
value
and
gross
unrealized
losses
related
to
fixed
maturity
securities
- available
for
sale
in
an
unrealized
loss
position
at
March
31,
2023
were
$
11.0
billion
and
$
871
million,
respectively.
The
fair
value
of
securities for
the single
issuer
(the United
States
government)
whose securities
comprised
the largest
unrealized
loss
position
at
March
31,
2023,
did
not
exceed
3.8
%
of
the
overall
fair
value
of
the
Company’s
fixed
maturity
securities -
available
for sale.
The fair
value and gross unrealized losses related to investments in an of
the securities
for the
issuer with
the second
largest
unrealized loss
position
at September 30, 2017 were $2,205,326 thousand and $46,437 thousand, respectively.  The market value
March 31,
2023,
comprised
less
than
0.6
%
of
the
Company’s
fixed
maturity
securities
-
available
for the single issuer whose securities comprised the largest unrealized loss position at September 30, 2017, (the U.S. Government) did not exceed 4.6% of the overall market value of the Company's fixed maturity securities.
sale. In addition, as indicated
on the above table,
there was no significant
concentration of unrealized
losses in any
one market sector.
The $23,890 thousand$
158
million of unrealized losses
related to fixed
maturity securities - available
for sale that
have been
in an
unrealized
loss position
for less
than one
year were
generally
comprised of
domestic and
foreign
corporate
securities,
asset
backed
securities
and
agency
residential
mortgage-backed
securities.
Of
these
unrealized
losses,
$
126
million
were
related
to
securities
that
were
rated
investment
grade
by
at
least
one
nationally
recognized
rating
agency.
The
$
713
million
of
unrealized
losses
related
to
fixed
maturity
securities
-
available
for sale
in an
unrealized
loss position
for more
than one
year related
primarily to
domestic and
foreign
corporate
securities
as
well
as
agency
residential
mortgage-backed
securities.
Of
these
unrealized
losses
$
657
million
were
related
to
securities
that
were
rated
investment
grade
by
at
least
one
nationally
recognized
rating
agency.
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.
Based upon
the Company’s
current evaluation
of securities
in
an
unrealized
loss
position
as
of
March
31,
2023,
the
unrealized
losses
are
due
to
changes
in
interest
rates
and
non-issuer specific
credit spreads
and are
not credit
related. In
addition, the
contractual
terms of
these securities
do not permit these securities to be settled at a price
less than one year were generally comprised of domestic and foreign corporate securities, agency residential mortgage-backed securities and foreign government securities. Of these unrealized losses, $20,072 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency.  The $22,547 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.  Of these unrealized losses, $20,240 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.their amortized cost.

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.
14
The tables
below
display
the aggregate market
fair
value
and gross
unrealized
depreciation
of fixed
maturity and equity
securities -
available
for
sale, 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 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
11
Duration of Unrealized Loss at December 31, 2016 were $2,510,133 thousand and $66,508 thousand, respectively.  The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2016, did not exceed 1.0% of the overall market value of the Company's fixed maturity securities.  In addition, as indicated on the above table, there was no significant concentration of unrealized losses2022 By Security Type
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in any one market sector.  The $40,537 thousand of unrealized losses related to fixedmillions)
Value
Depreciation
Value
Depreciation
Value
Depreciation
Fixed maturity securities that have been in an unrealized loss position- available for less than one year were generally comprisedsale
U.S. Treasury securities and obligations of obligations
U.S. government agencies and corporations
$
290
$
(14)
$
245
$
(26)
$
535
$
(40)
Obligations of U.S. states and political subdivisions domestic and foreign
235
(23)
27
(9)
261
(32)
Corporate securities
2,138
(175)
841
(146)
2,979
(321)
Asset-backed securities
3,120
(138)
436
(27)
3,556
(165)
Mortgage-backed securities
Commercial
464
(50)
36
(9)
500
(59)
Agency residential
852
(54)
605
(113)
1,456
(167)
Non-agency residential
2
-
1
-
3
-
Foreign government securities
455
(36)
144
(25)
599
(61)
Foreign corporate securities agency residential mortgage-backed securities and foreign government securities.  Of these unrealized losses, $36,646 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency.  The $25,971 thousand of unrealized losses related to
967
(100)
365
(67)
1,332
(167)
Total
$
8,522
$
(591)
$
2,698
$
(421)
$
11,220
$
(1,012)
Securities where an allowance for credit loss was
recorded
2
(1)
-
-
2
(1)
Total fixed maturity securities - available for sale
$
8,524
$
(591)
$
2,698
$
(421)
$
11,222
$
(1,013)
(Some amounts may not reconcile due to rounding.)
Duration of Unrealized Loss at December 31, 2022 By Maturity
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in millions)
Value
Depreciation
Value
Depreciation
Value
Depreciation
Fixed maturity securities - available for sale
Due in one year or less
$
463
$
(8)
$
29
$
(4)
$
491
$
(11)
Due in one year through five years
2,020
(143)
936
(107)
2,956
(250)
Due in five years through ten years
1,162
(148)
395
(98)
1,557
(246)
Due after ten years
439
(50)
262
(64)
701
(114)
Asset-backed securities
3,120
(138)
436
(27)
3,556
(165)
Mortgage-backed securities
1,318
(105)
641
(122)
1,959
(226)
Total
$
8,522
$
(591)
$
2,698
$
(421)
$
11,220
$
(1,012)
Securities where an allowance for credit loss was recorded
2
(1)
-
-
2
(1)
Total fixed maturity securities - available for sale
$
8,524
$
(591)
$
2,698
$
(421)
$
11,222
$
(1,013)
(Some amounts may not reconcile due to rounding.)
The aggregate
fair
value
and
gross
unrealized
losses
related
to
fixed
maturity
securities
- available
for
sale
in
an
unrealized
loss
position
at
December 31,
2022
were
$
11.2
billion
and
$
1.0
billion,
respectively.
The
fair
value
of
securities
for
the
issuer
(the
United
States
government)
whose
securities
comprised
the
largest
unrealized
loss
position
at
December
31,
2022,
did
not
exceed
4.3
%
of
the
overall
fair
value
of
the
Company’s
fixed
maturity
securities -
available
for sale.
The fair
value of
the securities
for the
issuer with
the second
largest
unrealized loss
comprised less
than
0.6
% of
the Company’s
fixed maturity
securities –
available
for sale.
In addition,
as indicated
on the above
table, there was
no significant concentration
of unrealized
losses in any one
market sector.
The $
591
million of
unrealized losses
related to
fixed maturity
securities -
available
for sale
that have
been in
an unrealized
loss position for more
less than one year related primarily to
were generally
comprised of domestic
and foreign corporate
securities, foreign
government
securities,
asset
backed
securities
as
well
as
commercial
and
agency
residential mortgage-backed
mortgage
backed
securities. Of these
unrealized
losses, $22,882 thousand is attributable to net unrealized foreign exchange losses, as the U.S. dollar has strengthened against other currencies.  There was no gross unrealized depreciation for mortgage-backed securities $
520
million were
related to sub-prime and alt-A loans. In all instances, there
securities that
were rated
investment
grade by
at
least
one
nationally
recognized
rating
agency.
The
$
421
million
of
unrealized
losses
related
to
fixed
maturity
securities
- available
for
sale in
an unrealized
loss
position for
more
than
one year
related
primarily
to
domestic
12
and
foreign
corporate
securities
as
well
as
agency
residential
mortgage
backed
securities.
Of
these
unrealized
losses
$
392
million
were
related
to
securities
that
were
rated
investment
grade
by
at
least
one
nationally
recognized
rating
agency.
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.
15
The components of net investment
income are presented in the tables table
below for the periods indicated:

  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
Three Months Ended
March 31,
(Dollars in millions)
2023
2022
Fixed maturities
$
174
$
94
Equity securities
1
4
Short-term investments and cash
11
-
Other invested assets
Limited partnerships
(24)
44
Dividends from limited partnership investments on the equity methodpreferred shares of affiliate
8
8
Other
22
12
Gross investment income before adjustments
192
162
Funds held interest income (expense)
3
3
Interest income from Parent
5
2
Gross investment income
200
166
Investment expenses
(10)
(10)
Net investment income
$
190
$
156
(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 net investment income
from limited partnerships
is
dependent upon the timingCompany’s
share of receiving financial information from these partnerships, the net asset
values of interests
underlying each limited partnership.
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
has contractual
commitments to
invest
up to
an additional
$
931
million in
limited partnerships
and
private
placement
loan
securities
at
March
31,
2023.
These
commitments
will
be
funded
when
called
in
accordance
with
the
partnership
and
loan
agreements,
which
have
investment
periods
that
expire,
unless
extended, through
2027
.
During the
fourth
quarter of
2022, the
Company
entered
into
corporate-owned
life
insurance
policies, which
are
carried within other invested
assets at policy cash surrender
value of $
954
million and $
939
million as of March 31,
2023 and December 31, 2022, respectively.
The Company had contractual commitments to invest up to an additional $348,144 thousandparticipates in limited partnerships at September 30, 2017.  These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2023.

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 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
March
31,
2023,
the
fair
value
of
investments
in
the
facility
consolidated
within
the
Company’s
balance sheets was $
287
million.
Other
invested
assets,
at
fair
value,
as of September 30, 2017
March
31,
2023
and
December 31,
2022, were
comprised
of preferred
shares
held in
Everest
Preferred
International
Holdings, Ltd.
(“Preferred
Holdings”), a
wholly-owned
subsidiary
of
Group.
13
Variable Interest
Entities
The
Company
is
engaged
with
various
special
purpose
entities
and
other
entities
that
are
deemed
to
be
VIEs
primarily as an investor
through normal investment
activities but also as
an investment manager.
A VIE is an
entity
that either has
investors
that lack certain
essential characteristics
of a controlling
financial interest,
such as simple
majority kick-out
rights, or lacks
sufficient funds
to finance its
own activities without
financial support provided
by
other
entities.
The
Company
performs
ongoing
qualitative
assessments
of
its
VIEs
to
determine
whether
the
Company
has
a
controlling
financial
interest
in the
VIE and
therefore
is
the
primary
beneficiary.
The Company
is
deemed
to
have
a
controlling
financial
interest
when
it
has
both
the
ability
to
direct
the
activities
that
most
significantly
impact
the
economic
performance
of the
VIE
and
the
obligation
to
absorb
losses
or
right
to
receive
benefits
from
the
VIE
that
could
potentially
be
significant
to
the
VIE.
Based
on
the
Company’s
assessment,
if
it
determines
it
is
the
primary
beneficiary,
the
Company
consolidates
the
VIE
in
the
Company’s
Consolidated
Financial Statements.
As of
March 31,
2023 and
December 31, 2016, were comprised 2022,
the Company
did not
hold any
securities for
which it is the primary beneficiary.
The
Company,
through
normal
investment
activities,
makes
passive
investments
in
general
and
limited
partnerships
and other
alternative investments.
For these
non-consolidated
VIEs, the
Company has
determined it
is
not
the
primary
beneficiary
as
it
has
no
ability
to
direct
activities
that
could
significantly
affect
the
economic
performance
of
the
investments.
The
Company’s
maximum
exposure
to
loss
as
of
March
31,
2023
and
December 31, 2022
is limited
to the
total
carrying value
of preferred shares held $
2.82
billion and
$
2.75
billion, respectively,
which are
included
in
general
and
limited
partnerships
and
other
alternative
investments
in
Other
Invested
Assets
in
the
Company's
Consolidated
Balance
Sheets.
As
of
March
31,
2023,
the
Company
has
outstanding
commitments
totaling
$
869
million
whereby
the
Company
is
committed
to
fund
these
investments
and
may
be
called
by
the
partnership
during
the
commitment
period
to
fund
the
purchase
of new
investments
and
partnership
expenses.
These
investments
are
generally
of
a
passive
nature
in
that
the
Company
does
not
take
an
active
role
in
management.
In addition, the Company
makes passive investments
in Preferred Holdings, an affiliated company.structured securities issued
by VIEs for which the Company

is not
the manager.
These investments
are
included in
asset-backed
securities,
which includes
collateralized
loan
obligations
and are
classified as
fixed
maturities.
The Company
has not
provided
financial or
other support
with
respect to these investments
other than its original investment. For
these investments, the Company
determined it
is not
the primary
beneficiary due
to the
relative size
of the Company’s
investment
in comparison
to the
principal
amount
of
the
structured
securities
issued
by
the
VIEs,
the
level
of
credit
subordination
which
reduces
the
Company’s
obligation
to
absorb
losses
or
right
to
receive
benefits
and
the
Company’s
inability
to
direct
the
activities that most significantly
impact the economic performance
of the VIEs. The Company’s
maximum exposure
to loss on these investments
is limited to the amount of the Company’s
investment.
The components of net realized capital gains (losses) on investments
are presented in the table below for
the periods indicated:

  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)
16
The Company recorded as net
Three Months Ended
March 31,
(Dollars in millions)
2023
2022
Fixed maturity securities:
Allowances for credit losses
$
(10)
$
(2)
Net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) bothfrom dispositions
(1)
(5)
Equity securities, fair value:
Net realized gains (losses) from dispositions
7
(8)
Gains (losses) from fair value re-measurementsadjustments
3
(131)
Other invested assets
-
4
Other invested assets, fair value:
Gains (losses) from fair value adjustments
24
(85)
Total net gains (losses) on investments
$
22
$
(227)
(Some amounts may not reconcile due to rounding.)
14
The following tables
provide a
roll forward
of the Company’s
beginning and write-downsending
balance of allowance
for credit
losses for the periods indicated:
Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale
Three Months Ended March 31, 2023
Foreign Corporate Securities
Corporate Securities
Total
(Dollars in the value of securities deemed to be impairedmillions)
Beginning Balance
$
(45)
$
(1)
$
(46)
Credit losses on an other-than-temporary basis 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.

losses were not previously recorded
(12)
-
(12)
Increases in allowance on previously
impaired securities
-
-
-
Decreases in allowance on previously
impaired securities
-
-
-
Reduction in allowance due to disposals
2
-
2
Balance, end of period
$
(55)
$
(1)
$
(56)
(Some amounts may not reconcile due to rounding.)
Roll Forward of Allowance for Credit Losses - Fixed Maturities - Held to Maturity
Three Months Ended March 31, 2023
Asset
Foreign
Corporate
Backed
Corporate
Securities
Securities
Securities
Total
(Dollars in millions)
Beginning Balance
$
(2)
$
(6)
$
(1)
$
(9)
Credit losses on securities where credit
losses were not previously recorded
-
-
-
-
Increases in allowance on previously
impaired securities
-
-
-
-
Decreases in allowance on previously
impaired securities
-
-
-
-
Reduction in allowance due to disposals
-
-
-
-
Balance, end of period
$
(2)
$
(6)
$
(1)
$
(9)
(Some amounts may not reconcile due to rounding.)
15
Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale
Three Months Ended March 31, 2022
Asset
Foreign
Corporate
Backed
Corporate
Securities
Securities
Securities
Total
(Dollars in millions)
Beginning Balance
$
(19)
$
(8)
$
-
$
(27)
Credit losses on securities where credit
losses were not previously recorded
(2)
-
(1)
(3)
Increases in allowance on previously
impaired securities
-
-
-
-
Decreases in allowance on previously
impaired securities
-
-
-
-
Reduction in allowance due to disposals
1
-
-
1
Balance, end of period
$
(20)
$
(8)
$
(1)
$
(29)
(Some amounts may not reconcile due to rounding.)
The proceeds and
split between gross
gains and losses
from sales dispositions
of fixed maturity
securities – available
for
sale 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) 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)

5. 
Three Months Ended
March 31,
(Dollars in millions)
2023
2022
Proceeds from sales of fixed maturity securities, available for sale
$
49
$
267
Gross gains from dispositions
3
3
Gross losses from dispositions
(4)
(8)
Proceeds from sales of equity securities
$
46
$
82
Gross gains from dispositions
7
4
Gross losses from dispositions
-
(12)
(Some amounts may not reconcile due to rounding.)
16
4.
RESERVES FOR LOSSES, LAE
AND LAEFUTURE POLICY BENEFIT RESERVE

Activity in the reserve for losses and LAEloss adjustment
expenses (“LAE”) is summarized for the periods
indicated:

  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 March 31,
(Dollars in millions)
2023
2022
Gross reserves beginning of period
$
14,977
$
13,121
Less reinsurance recoverables on unpaid losses
(3,684)
(3,651)
Net reserves beginning of period
11,293
9,470
Incurred related to:
Current year
1,403
1,219
Prior years
(9)
7
Total incurred losses were $1,918,055 thousand for the nine months ended September 30, 2017 compared to $1,441,962 thousand for the fulland LAE
1,394
1,226
Paid related to:
Current year 2016.  The increase in current year incurred
585
248
Prior years
379
676
Total paid losses was primarilyand LAE
964
924
Foreign exchange/translation adjustment
5
7
Net reserves end of period
11,729
9,778
Plus reinsurance recoverables on unpaid losses
3,586
3,625
Gross reserves end of period
$
15,315
$
13,404
(Some amounts may not reconcile due to $1,039,295 thousand of catastrophe rounding.)
Current
year
incurred
losses incurred
were
$
1.4
billion
and
$
1.2
billion
for
the
three
months
ended
March
31,
2023
and
2022,
respectively.
Gross
and
net
reserves
increased
for
the
three
months
ended
March
31,
2023,
reflecting
an
increase
in the nine months ended September 30, 2017, mainly relatedunderlying
exposure
due to Hurricane Irma, Hurricane Maria, Hurricane Harvey
earned premium
growth
year
over
year
and the Mexico City earthquake.  The $688,924 thousand
impact of
an increase
of
$
22
million in reinsurance recoverables from December 31, 2016
current
year
catastrophe
losses in
2023 compared
to
2022. Prior
year
incurred development
of $
9
million is primarily due to recoverables from these catastrophe losses.

Incurred prior years' reserves increaseddriven by $453 thousand and decreased by $91,682 thousand for the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively.  The decrease for the year ended December 31, 2016 was attributable to favorable development in the reinsurance segments of $187,909 thousand related primarily to property and short-tail business in the U.S., property business in Canada, Latin America, Middle East and Africa, as well as favorable development
movement on prior year catastrophecatastrophes.
17
losses, partially offset by $45,668 thousand of adverse development on A&E reserves. Part of the favorable development 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.
5.

6.  FAIR VALUE

GAAP guidance regarding fair
value measurements address addresses
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
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
Level 2:Inputs to the valuation methodology include quoted prices markets,
and
inputs
that
are
observable
for
the
asset
or
liability,
either
directly
or
indirectly,
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;

substantially the full term of the financial instrument;
Level 3:Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Level 3:
Inputs to the valuation methodology are
unobservable and significant to the fair value
measurement.

17
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. The
Company
also
continually
performs
quantitative
and
qualitative
analysis
of
prices,
including
but
not
limited
to
initial
and
ongoing
review
of
pricing
methodologies,
review
of
prices
obtained
from
pricing
services
and
third
party
investment
asset managers, have
review of
pricing statistics
and trends,
and comparison
of prices
for certain
securities
with a
secondary price
source for
reasonableness. 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.
At March
31, 2023,
$
1.7
billion of
fixed
maturities
were fair
valued
using unobservable
inputs. The
majority of
these
fixed
maturities
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 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
evaluate
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 September 30, 2017.  Due to the unavailability of prices for forty-two private placement securities, the investment manager's valuation committee valued the forty-two securities at $86,536 thousand atindependent
third party
valuations.
At December
31, 2016.2022,
$
1.7
18
billion of
fixed maturities
were fair
valued using
unobservable
inputs.
The Company
internally manages
a public equity portfolio
of assets which
had a fair
value at September 30, 2017
March 31, 2023
and December 31, 2016
2022 of $218,533 thousand$
3.4
billion and $133,755 thousand,$
2.7
billion, respectively,
primarily comprised
of collateralized
loan obligations
included in
asset-backed securities and allUS treasury
fixed maturities.
All prices for these securities were obtained
from publically publicly
published sources.sources or nationally recognized
pricing vendors.

Equity
securities
denominated
in
U.S.
currency
with
quoted
prices
in
active
markets
for
identical
assets
are
categorized
as
Level
1
since
the
quoted
prices
are
directly
observable.
Equity
securities
traded
on
foreign
exchanges
are categorized
as 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.

Fixed maturity
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
are
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.

In addition
to the
The
valuations from
investment
managers,
some of
the fixed
maturities with
fair values
categorized
as levelLevel 3 result when prices are
not available from the nationally
recognized pricing services.  services and are
derived using
unobservable
inputs.
The
Company
will
value
the
securities
with
unobservable
inputs
using
comparable
market
information
or receive
fair
values
from investment
managers.
The asset investment
managers will then
may
obtain
non-binding
price quotes
for
the securities
from brokers.
The single
broker
quotes
are provided
by market
makers
or broker-dealers 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.

18
The
composition
and
valuation
inputs
for
the
presented
fixed
maturities
categories
Level
1
and
Level
2
are
as
follows:

●
·U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury 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
Other invested assets, at fair value, was categorized as Level 3 at September 30, 2017 and December 31, 2016, 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 parent.  The fair value of the preferred stock at September 30, 2017 and December 31, 2016 was determined using a pricing model.

The following table presents 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
The following
tables present
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, 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 nine months ended September 30, 2017.
20

Fair Value Measurement Using:
The following table presents theQuoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Dollars in millions)
March 31, 2023
(Level 1)
(Level 2)
(Level 3)
Assets:
Fixed maturities, available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations
$
510
$
-
$
510
$
-
Obligations of U.S. states and political subdivisions
398
-
398
-
Corporate securities
3,759
-
3,050
709
Asset-backed securities
4,335
-
3,315
1,020
Mortgage-backed securities
Commercial
511
-
511
-
Agency residential
1,719
-
1,719
-
Non-agency residential
3
-
3
-
Foreign government securities
643
-
643
-
Foreign corporate securities
1,537
-
1,521
16
Total fixed maturities, available for sale
13,414
-
11,669
1,745
Equity securities, fair value measurement levels for all
158
140
19
-
Other invested assets, which the Company has recorded at fair value (fair
1,497
-
-
1,497
(Some amounts may not reconcile due to rounding.)
20
Fair Value Measurement Using:
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Dollars in millions)
December 31, 2022
(Level 1)
(Level 2)
(Level 3)
Assets:
Fixed maturities, available for sale
U.S. Treasury securities and market value) asobligations 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) 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 
U.S. government agencies and corporations

$
535
$
-
$
535
$
-
Obligations of U.S. states and political subdivisions
413
-
413
-
Corporate securities
3,561
-
2,846
715
Asset-backed securities
3,951
-
2,957
994
Mortgage-backed securities
Commercial
509
-
509
-
Agency residential
1,628
-
1,628
-
Non-agency residential
3
-
3
-
Foreign government securities
637
-
637
-
Foreign corporate securities
1,433
-
1,417
16
Total fixed maturities, available for sale
12,671
-
10,946
1,725
Equity securities, fair value
194
132
63
-
Other invested assets, fair value
1,472
-
-
1,472
(Some amounts may not reconcile due to rounding.)
In addition, $70,657 thousand$
316
million and $18,801 thousand$
292
million of investments
within other invested
assets on the consolidated
balance
sheets as of September 30, 2017
March 31,
2023 and December
31, 2016,2022, respectively,
are not
included within the
fair value
hierarchy
tables as the assets are valued using the NAVmeasured at
net asset value (“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 fixed maturities available
for sale, for the periods indicated:

  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.)                        
21
Total Fixed Maturities - Available for Sale
Three Months Ended March 31, 2023
Corporate
Asset Backed
Foreign
(Dollars in millions)
Securities
Securities
Corporate
Total
Beginning balance fixed maturities
$
715
$
994
$
16
$
1,725
Total gains or (losses) (realized/unrealized)
Included in earnings
1
-
-
1
Included in other comprehensive income (loss)
(4)
18
-
14
Purchases, issuances and settlements
(3)
9
-
5
Transfers in (out) of Level 3 and reclassification of securities in/(out)
investment categories
-
-
-
-
Ending balance
$
709
$
1,020
$
16
$
1,745
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.)                                

21
Total Fixed Maturities, Available for Sale
Three Months Ended March 31, 2022
Corporate
Asset Backed
Foreign
(Dollars in millions)
Securities
Securities
CMBS
Corporate
Total
Beginning balance fixed maturities
$
730
$
1,251
$
-
$
16
$
1,997
Total gains or (losses) (realized/unrealized)
Included in earnings
1
-
-
-
2
Included in other comprehensive income (loss)
(4)
(29)
-
-
(33)
Purchases, issuances and settlements
(13)
166
6
-
159
Transfers in (out) of Level 3 and reclassification of securities
in/(out) investment categories
-
-
-
-
-
Ending balance
$
715
$
1,389
$
6
$
16
$
2,125
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.)
There were
no
transfers to/(from) levelof assets
in/(out) of Level 3 fair value measurements using significant unobservable inputs were $0 thousand and $1,621 thousand of investments for the ninethree months ended September 30, 2017
March 31, 2023.
Financial Instruments Disclosed, But Not Reported,
at Fair Value
Certain financial
instruments
disclosed, but
not reported,
at fair
value are
excluded
from the
fair value
hierarchy
tables
above.
Fair
values
of
fixed
maturity
securities
held
to
maturity,
senior
notes
and
long-term
subordinated
notes can
be found
within Notes 3,
9 and 2016, 10,
respectively.  The $1,621 thousand
Fair values
of long-term notes
receivable from
affiliates
can be found within Note 13. Short-term
investments for the nine months ended September 30, 2016 related to the net impact of securities no longer priced by a recognized pricing service.are stated
at cost, which approximates
fair value.

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs by other invested assets, for the periods indicated:
6.

  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.)                

7.  COMMITMENTS AND CONTINGENCIES

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.LAE.

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.
22
The Company has entered into separate annuity agreements with The Prudential Insurance of America ("The 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.

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

8. 
22
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, 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)                        
23
Three Months Ended
March 31, 2023
(Dollars in millions)
Before Tax
Tax Effect
Net of Tax
Unrealized appreciation (depreciation)
("URA(D)") on securities - non-credit related
$
142
(30)
$
112
Reclassification of net realized losses
(gains) included in net income (loss)
11
(2)
9
Foreign currency translation adjustments
8
(1)
7
Reclassification of amortization of net gain
(loss) included in net income (loss)
-
-
-
Total other comprehensive income (loss)
$
161
$
(33)
$
128
(Some amounts may not reconcile due to rounding)
Three Months Ended
March 31, 2022
(Dollars in millions)
Before Tax
Tax Effect
Net of Tax
Unrealized appreciation (depreciation)
("URA(D)") on securities - non-credit related
$
(499)
104
$
(394)
Reclassification of net realized losses
(gains) included in net income (loss)
3
(1)
2
Foreign currency translation adjustments
(2)
1
(2)
Reclassification of amortization of net gain
(loss) included in net income (loss)
1
-
1
Total other comprehensive income (loss)
$
(497)
$
104
$
(393)
(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   
  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)                      

Three Months Ended
Affected line item within the
March 31,
statements of operations and
AOCI component
2023
2022
comprehensive income (loss)
(Dollars in millions)
URA(D) on securities
$
11
$
3
Other net gains (losses) on investments
(2)
(1)
Income tax expense (benefit)
$
9
$
2
Net income (loss)
Benefit plan net gain (loss)
$
-
$
1
Other underwriting expenses
-
-
Income tax expense (benefit)
$
-
$
1
Net income (loss)
(Some amounts may not reconcile due to rounding)
23
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
March 31,
(Dollars in millions)
2023
2022
Beginning balance of URA (D) on securities
$
(816)
$
122
Current period change in URA (D) of investments - non-credit related
121
(392)
Ending balance of URA (D) on securities
(695)
(270)
Beginning balance of foreign currency translation adjustments
1
20
Current period change in foreign currency translation adjustments
7
(2)
Ending balance of foreign currency translation adjustments
8
18
Beginning balance of benefit plan net gain (loss)
(33)
(50)
Current period change in benefit plan net gain (loss)
-
1
Ending balance of benefit plan net gain (loss)
(33)
(50)
Ending balance of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

  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)

$
9.  (720)
$
(302)
(Some amounts may not reconcile due to rounding.)
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,
March 31,
2023, the
total
amount
on deposit
in the
trust
account
was
$
751
million which
includes
$
52
million of
restricted
cash. At
March 31,
2022, the
total amount
on deposit
in the
trust account
was $659,548 thousand.$

567
On April
million, which
includes $
173
million of restricted cash.
24 2014, the
The
Company
entered
into two
various
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 stormstable below summarizes
the various agreements:
(Dollars 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 andmillions)
Class
Description
Effective Date
Expiration Date
Limit
Coverage
Basis
Series 2018-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/30/2018
5/5/2023
$
63
Aggregate
Series 2018-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/30/2018
5/5/2023
200
Aggregate
Series 2019-1 Class A-1
US, Canada, Puerto Rico – Named Storm and Earthquake Events
12/12/2019
12/19/2023
150
Occurrence
Series 2019-1 Class B-1
US, Canada, Puerto Rico – Named Storm and Earthquake Events
12/12/2019
12/19/2023
275
Aggregate
Series 2019-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
12/12/2019
12/19/2024
150
Occurrence
Series 2019-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
12/12/2019
12/19/2024
275
Aggregate
Series 2021-1 Class A-1
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/21/2025
150
Occurrence
Series 2021-1 Class B-1
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/21/2025
85
Aggregate
Series 2021-1 Class C-1
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/21/2025
85
Aggregate
Series 2021-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/20/2026
150
Occurrence
Series 2021-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/20/2026
90
Aggregate
Series 2021-1 Class C-2
US, Canada, Puerto Rico – Named Storm and Earthquake Events
4/8/2021
4/20/2026
90
Aggregate
Series 2022-1 Class A
US, Canada, Puerto Rico – Named Storm and Earthquake Events
6/22/2022
6/25/2025
300
Aggregate
Total available limit as of March 31, 2023
$
2,063
Recoveries
under
these
collateralized
reinsurance
agreements
with
Kilimanjaro
are
primarily
dependent
on
estimated industry
level insured
losses from
covered events
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.

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.
24
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.

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,
March
31,
2023,
none
of
the
published
insured
loss
estimates
for
catastrophe
events
during
the 2017 catastrophe events
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").  On November 18, 2014, Kilimanjaro issued $500,000 thousand of notes ("Series 2014-2 Notes").  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).
The proceeds
from
the issuance
of the Notes listed above
catastrophe
bonds
are
held in
reinsurance trust
trusts
throughout
the duration
of the
applicable
reinsurance
agreements
and invested
solely in
U.S.
government
money
market
funds
with
a
rating
of at
least
“AAAm”
by
Standard
&
Poor’s.
The catastrophe
bonds’
issue
date,
maturity date and amount correspond
to the reinsurance agreements and invested solely in US government money market funds with a rating of at least "AAAm" by Standard & Poor's.listed
above.

10. 
9.
SENIOR NOTES

The table
below displays Holdings'
Holdings’ outstanding
senior notes.  Market
Fair 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, 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 notes06/05/2014 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%, which will mature on June 1, 2044. Interest will be paid semi-annually on June 1 and December 1 of each year.
25
March 31, 2023
December 31, 2022
Consolidated
Consolidated
Principal
Balance Sheet
Fair
Balance Sheet
Fair
(Dollars in millions)
Date Issued
Date Due
Amounts
Amount
Value
Amount
Value
4.868
% Senior notes
06/05/2014
06/01/2044
400
$
397
$
373
$
397
$
343
3.5
% Senior notes
10/07/2020
10/15/2050
1,000
981
728
981
677
3.125
% Senior notes
10/04/2021
10/15/2052
1,000
969
677
969
627
2,400
$
2,348
$
1,778
$
2,347
$
1,647
25
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) 2017  2016  2017  2016 
Interest expense incurred $4,868  $4,868  $14,604  $14,604 

11.  LONG TERM
Three Months Ended
March 31,
(Dollars in millions)
Interest Paid
Payable Dates
2023
2022
4.868% Senior notes
semi-annually
June 1/December 1
$
5
$
5
3.5% Senior notes
semi-annually
April 15/October 15
9
9
3.125% Senior notes
semi-annually
April 15/October 15
8
8
$
22
$
22
10.
LONG-TERM SUBORDINATED
NOTES

The table
below
displays
Holdings’
outstanding
fixed
to
floating
rate
long
term
subordinated
notes.
Fair
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.
March 31, 2023
December 31, 2022
Original
Consolidated
Consolidated
Principal
Maturity Date
Balance
Fair
Balance
Fair
(Dollars in millions)
Date Issued
Amount
Scheduled
Final
Sheet Amount
Value
Sheet Amount
Value
Long term subordinated notes
04/26/2007
$
400
05/15/2037
05/01/2067
$
218
$
197
$
218
$
187
During the
fixed
rate
interest
period from
May 3, 2007
through
May 14, 2017
, interest
was
at
the annual
rate
of
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’
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 May
15, 2017.
The reset
quarterly
interest
rate for
February 15,
2023 to
May 14, 2023 is
7.25
%.
Holdings may
redeem the
long-term subordinated
notes on
or after
May 15, 2017
, in
whole or
in part
at
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.
The
Company’s
4.868
%
senior
notes, due
on
June 1, 2044
,
3.5
% senior
notes due
on
October 15, 2050
and
3.125
% senior
notes due
on
October
15, 2052
are the Company’s
long-term indebtedness that rank
senior to the long-term subordinated
notes.
In 2009, the
Company had reduced
its outstanding
amount of long-term
subordinated notes
through the initiation
of a cash tender offer for any
and all of the long-term subordinated notes.
Interest
expense
incurred
in
connection
with
these
long-term
subordinated
notes
is
as
follows
for
the
periods
indicated:
Three Months Ended
March 31,
(Dollars in millions)
2023
2022
Interest expense incurred
$
4
$
2
11.
FEDERAL HOME LOAN BANK MEMBERSHIP
Everest
Re
is
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
March
31,
2023,
Everest
Re
had
admitted
assets
of
approximately $
23.1
billion which provides
borrowing capacity of
up to approximately
$
2.3
billion. As of March
31,
26
2023,
Everest
Re
has
$
519
million
of
borrowings
outstanding,
all
of
which
matures
in
2023.
Everest
Re
incurred
interest expense
of $
6
million and $
0.7
million for the three
months ended March
31, 2023 and 2022, respectively.
The
FHLBNY
membership
agreement
requires
that
4.5
%
of
borrowed
funds
be
used
to
acquire
additional
membership stock.
12.
SEGMENT REPORTING
The Reinsurance
operation writes
worldwide property
and casualty
reinsurance and
specialty lines of
business, on
both
a
treaty
and
facultative
basis,
through
reinsurance
brokers,
as
well
as
directly
with
ceding
companies.
Business
is
written
in
the
United
States
as
well
as
through
branches
in
Canada
and
Singapore.
The
Insurance
operation
writes property
and casualty
insurance
directly and
through
brokers,
surplus lines
brokers
and general
agents within the 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
LAE
incurred,
commission
and
brokerage
expenses
and other
underwriting expenses.
The Company
measures
its 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 March 31, 2023
Three Months Ended March 31, 2022
(Dollars in millions)
Reinsurance
Insurance
Total
Reinsurance
Insurance
Total
Gross written premiums
$
1,643
$
852
$
2,496
$
1,380
$
825
$
2,205
Net written premiums
1,373
690
2,063
1,185
611
1,796
Premiums earned
$
1,367
$
702
$
2,068
$
1,209
$
619
$
1,829
Incurred losses and LAE
929
465
1,394
820
405
1,226
Commission and brokerage
361
76
436
315
69
385
Other underwriting expenses
39
100
139
31
87
118
Underwriting gain (loss)
$
38
$
61
$
99
$
43
$
58
$
101
Net investment income
190
156
Net gains (losses) on investments
22
(227)
Corporate expense
(6)
(6)
Interest, fee and bond issue cost amortization
expense
(32)
(24)
Other income (expense)
(4)
(9)
Income (loss) before taxes
$
269
$
(9)
(Some amounts may not reconcile due to rounding)
27
13.
RELATED-PARTY
TRANSACTIONS
The table below displays Holdings' outstanding fixed to floating rate long term subordinated notes.  Marketlong-term note
agreements that Group entered
into with Everest
Re for the periods
indicated.
These transactions
are presented
as Notes
Receivable
– Affiliated
in the
Consolidated
Balance Sheet
of
Holdings. Fair value is based on quoted market prices, but due to limited trading activity,of these subordinatedlong-term notes are
is considered Level 2 in the fair value
hierarchy.

      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 notes04/26/2007 $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%, payable semi-annually
March 31, 2023
December 31, 2022
Consolidated
Consolidated
Principal
Balance Sheet
Fair
Balance Sheet
Fair
(Dollars 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, subjectmillions)
Date Issued
Date Due
Amounts
Amount
Value
Amount
Value
1.69
% Long-term Note
12/17/2019
12/17/2028
300
$
300
$
242
$
300
$
242
1.00
% Long-term Note
08/05/2021
08/05/2030
200
200
151
200
151
3.11
% Long-term Note
06/14/2022
06/14/2052
215
215
171
215
171
4.34
% Long-term Note
12/12/2022
12/12/2052
125
125
125
125
125
840
$
840
$
689
$
840
$
689
(Some amounts may not reconcile due to 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 15, 2017. The reset quarterly interest rate for November 15, 2017 to November 15, 2017 is 3.70%.rounding.)

Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 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% senior notes on October 15, 2014, the Company's 4.868% senior notes, due on June 1, 2044, have become the Company's long term indebtedness that ranks senior to the long term subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 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 income recognized
in connection with these long term subordinatedlong-term notes is
as follows for the periods indicated:

  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 

12.  SEGMENT REPORTING

The U.S. Reinsurance operation writes 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 the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents mainly within the U.S.
26
Three Months Ended
March 31,
(Dollars in millions)
Interest Received
Receivable Dates
2023
2022
1.69
% Long-term Note
annually
December 17
$
1
$
1
1.00
% Long-term Note
annually
August 5
1
1
3.11
% Long-term Note
annually
June 14
2
-
4.34
% Long-term Note
annually
December 12
1
-
$
5
$
2
(Some amounts may not reconcile due
to rounding.)
These segments are managed independently, but conform
Holdings
holds
1,773.214
preferred
shares
of
Preferred
Holdings
with corporate guidelines with respect to pricing, risk management, control
a
$
1
million
par
value
and
1.75
%
annual
dividend
rate.
Holdings
received
these
shares
in
December
2015
in
exchange
for
previously
held
9,719,971
Common Shares
of aggregate catastrophe exposures, capital, Group.
After the
exchange,
Holdings no
longer holds
any shares
or has
any ownership
interest
in Group.
Holdings has
reported 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
gains
(losses)
on
investments and support operations.  Management generally monitors and evaluates
in
the financial performance
consolidated
statements
of these operating segments based upon their underwriting results.operations
and

comprehensive
Underwriting results include earned premium less losses and loss adjustment expenses ("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.
income

(loss).
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
table
presents
the underwriting results for dividends
received on
the operating segments for the periods indicated:preferred
shares

  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)
27
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) 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 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) 2017  2016  2017  2016 
Canada gross written premiums $30,625  $35,856  $94,777  $94,072 

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

13.  RELATED-PARTY TRANSACTIONS

Parent

Group entered into a $250,000 thousand long term promissory note agreement with Holdings as of December 31, 2014.  The note will mature on 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 30, 2017, and September 30, 2016, respectively.

Group's Board of Directors approved an amended share repurchase program authorizing Group and/or its subsidiary Holdings to purchase 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
Amendment Date Repurchase
(Dollars in thousands)
09/21/2004 5,000,000
07/21/2008 5,000,000
02/24/2010 5,000,000
02/22/2012 5,000,000
05/15/2013 5,000,000
11/19/2014 5,000,000
 30,000,000
28
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% annual dividend rate.  After the exchange, Holdings no longer holds any shares or has any ownership interest in Group.

Holdings reported both its Parent shares and 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
Parent
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) 2017  2016  2017  2016 
Dividends received on preferred stock of affiliate $7,758  $7,758  $23,274  $23,274 

Affiliated Companies

Three Months Ended
Everest Global Services, Inc. ("Global Services"), anMarch 31,
(Dollars in millions)
2023
2022
Dividends received on preferred stock of affiliate of Holdings, provides centralized management and home office services, through a management agreement, to Holdings and other affiliated companies within Holdings' consolidated structure.  Services provided by Everest Global include executive managerial services, legal services, actuarial services, accounting services, information technology services and others.

$
8
$
8
28
Affiliates
The following table presents the expenses incurred by Holdings from services provided by Company
has engaged
in reinsurance
transactions
with Bermuda
Re,
Everest Global for the periods indicated.
Reinsurance
Company
(Ireland)

dac
  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 
(“Ireland
Re”),
Everest
Insurance
(Ireland)
dac
(“Ireland
Insurance”),
Everest
International
Reinsurance
Ltd.
(“Everest
International”),
29
Everest
Insurance
Company
of
Canada
(“Everest
Canada”),
Lloyd’s
Syndicate
2786
and
Mt.
Logan
Re,
which
are
affiliated
companies
primarily
driven
by
enterprise
risk
and
capital
management
Affiliatesconsiderations under which business
is ceded at market rates and
terms.
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)              
     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 Branch60.0% Bermuda Re property business  350,000
(1)
 - 
01/01/2011-12/31/2011 Everest Re- Canadian Branch60.0% Bermuda Re property business  350,000
(1)
 - 
01/01/2012-12/31/2012 Everest Re- Canadian Branch75.0% Bermuda Re property / casualty business  206,250
(1)
  412,500
(1)
01/01/2013-12/31/2013 Everest Re- Canadian Branch75.0% Bermuda Re property / casualty business  150,000
(1)
  412,500
(1)
01/01/2014 Everest Re- Canadian Branch75.0% Bermuda Re property / casualty business  262,500
(1)
  412,500
(1)
                
01/01/2012 Everest Canada 80.0% Everest Re- Canadian Branchproperty business -  - 
                
(1)   Amounts shown are Canadian dollars.
             
(Dollars in millions)
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
325
01/01/2011-12/31/2011
Everest Re
50.0
%
Bermuda Re
property / casualty business
150
300
01/01/2012-12/31/2014
Everest Re
50.0
%
Bermuda Re
property / casualty business
100
200
01/01/2015-12/31/2016
Everest Re
50.0
%
Bermuda Re
property / casualty business
163
325
01/01/2017-12/31/2017
Everest Re
60.0
%
Bermuda Re
property / casualty business
219
438
01/01/2010-12/31/2010
Everest Re- Canadian Branch
60.0
%
Bermuda Re
property business
350
(1)
-
01/01/2011-12/31/2011
Everest Re- Canadian Branch
60.0
%
Bermuda Re
property business
350
(1)
-
01/01/2012-12/31/2012
Everest Re- Canadian Branch
75.0
%
Bermuda Re
property / casualty business
206
(1)
413
(1)
01/01/2013-12/31/2013
Everest Re- Canadian Branch
75.0
%
Bermuda Re
property / casualty business
150
(1)
413
(1)
01/01/2014-12/31/2017
Everest Re- Canadian Branch
75.0
%
Bermuda Re
property / casualty business
263
(1)
413
(1)
01/01/2012-12/31/2017
Everest Canada
80.0
%
Everest Re- Canadian
Branch
property business
-
-
01/01/2020
Everest International Assurance
100.0
%
Bermuda Re
life 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 table below representsstop loss portfolio transferagreement was most
recently renewed effective
January 1, 2023.
Everest
Re entered
into a
catastrophe
excess of
loss reinsurance
contract
with Bermuda
Re (UK
Branch), effective
January
1,
2021
through
December
31,
2021.
The
contract
provides
Bermuda
Re
(UK
Branch),
with
up
to
£
110
million of reinsurance
coverage for
each catastrophe
occurrence above
£
29
million.
Bermuda Re (UK
Branch) paid
Everest Re £
4
million for this coverage.
This contract was most
recently renewed effective
January 1, 2023.
Everest
Re
entered
into
a
catastrophe
excess
of
loss
reinsurance
contract
with
Ireland
Re,
effective
February
1,
2023 through
January 31,
2024. The
contract
provides Ireland
Re with
up to
€
121
million of
reinsurance
coverage
for each catastrophe
occurrence above €
18
million. Ireland Re paid Everest
Re €
10
million for this coverage.
Everest Re
entered into a catastrophe
excess of loss reinsurance
contract with Ireland
Re, effective March
31, 2023
through January 31, 2024. The contract
provides Ireland Re with up
to €
61
million of reinsurance coverage
for each
catastrophe occurrence above
€
139
million. Ireland Re paid Everest
Re €
2
million for this coverage.
The
table
below
represents
loss
portfolio
transfer
(“LPT”)
reinsurance
agreements
whereby
net
insurance
exposures and reserves were
transferred to
an affiliate.

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, the Company sold Mt. McKinley to Clearwater Insurance Company, a Delaware domiciled insurance company. As of that date, Mt. McKinley is no longer deemed an affiliated company or related party.
30
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 syndicate 2786 for the periods indicated:
(Dollars in millions)

Effective
  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 

Transferring
  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 

Assuming
  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 

% of Business or
  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   - 

Covered Period
Date
Company
Company
Amount of Transfer
of Transfer
10/01/2001
Everest Re sold net assets(Belgium Branch)
Bermuda Re
100
%
All years
10/01/2008
Everest Re
Bermuda Re
$
747
01/01/2002-12/31/2007
12/31/2017
Everest Re
Bermuda Re
$
970
All years
29
On December 31,
2017, the
Company entered
into a
LPT agreement
with Bermuda
Re. The
LPT agreement
covers
subject
loss
reserves
of
$
2.3
billion
for
accident
years
2017
and
prior.
As
a
result
of
the
LPT
agreement,
the
Company transferred
$
1.0
billion of its UK branch to Bermuda Recash and provided Bermuda Re with a reserve indemnity agreement allowing for indemnity payments of up to 90% of ₤25.0
fixed maturity securities
and transferred
$
970
million of loss reserves
to
Bermuda
Re.
As
part
of
the
LPT
agreement,
Bermuda
Re
will
provide
an
additional
$
500
million
of
adverse
development coverage
on the
subject loss
reserves. As
of March
31, 2023
and December
31, 2022,
the excess Company
has a reinsurance recoverable
of 2002$
803.6
million and prior reserves, provided that any recognition of profit $
803.7
million, respectively,
recorded on
its balance sheet due
from Bermuda Re.
The
following
tables
summarize
the reserves for 2002
significant
premiums
and
losses
ceded
and
assumed
by
the
Company
to
affiliated entities:
Three Months Ended
Bermuda Re
March 31,
(Dollars in millions)
2023
2022
Ceded written premiums
$
106
$
92
Ceded earned premiums
106
92
Ceded losses and prior underwriting years is taken into account.LAE

(4)
Effective February 27, 2013, Group established a new subsidiary, (2)
Assumed written premiums
-
2
Assumed earned premiums
-
3
Assumed losses and LAE
-
-
Three Months Ended
Ireland Re
March 31,
(Dollars in millions)
2023
2022
Assumed written premiums
$
3
$
2
Assumed earned premiums
3
3
Assumed losses and LAE
-
2
Three Months Ended
Ireland Insurance
March 31,
(Dollars in millions)
2023
2022
Assumed written premiums
$
1
$
2
Assumed earned premiums
2
2
Assumed losses and LAE
1
6
The
following
table
summarizes
the
premiums
and
losses
that
are
ceded
by
the
Company
to
Mt.
Logan
Re
segregated accounts.
Three Months Ended
Mt. Logan Re which is a Class 3 insurer basedSegregated Accounts
March 31,
(Dollars in Bermuda.  Effective July 1, 2013, Mt. Logan Re established separate segregated accounts for its business activity, which will invest in a diversified set of catastrophe exposures.millions)
2023
2022
Ceded written premiums
$
42
$
41
Ceded earned premiums
38
42
Ceded losses and LAE
13
37
31
14.
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) 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.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.

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) 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 Company contributed $10,000 thousand 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 and nine months ended September 30, 2016.

15. INCOME TAXES

The
Company
is
domiciled
in
the
United
States
and
has
subsidiaries
domiciled
within
the
United
States
with
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
32
30
approach,
the
estimated
annual
effective
tax
rate
is
applied
to
the
interim
year-to-date
pre-tax
income/(loss)
to
prescribed under ASC 740-270 to determine
the estimated recoverable based on
income
tax
expense
or
benefit
for
the
year-to-date result. 
period.
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(loss) and effective
tax rate.

16.  DISPOSITION

On August 24, 201616, 2022, the Company sold Heartland, its crop Managing General AgentInflation Reduction
Act of 2022 (“IRA”) was enacted. We
have evaluated
the tax provisions
of
the
IRA,
the
most
significant
of
which
are
the
corporate
alternative
minimum
tax
and
the
share
repurchase
excise tax and do not expect
the legislation to CGB for $49,000 thousand.  The sale agreement includeshave a provision for a long term strategic reinsurance relationship with CGB.  The Company has recognized an after-tax lossmaterial
impact on the saleour results of Heartland of $12,942 thousand.  Underoperations. As 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.
IRS issues

additional guidance, we will evaluate any
impact to our consolidated financial statements.
17. 
15.
SUBSEQUENT EVENTS

The
Company
has
evaluated
known
recognized
and
non-recognized
subsequent
events.
The
Company
does
not
The Company has evaluated known recognized and non-recognizedhave any subsequent events.  In October 2017, Hurricane Nate impacted the Southern 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. Due
events 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 these events will adversely impact the fourth quarter 2017 financial results.report.
33
31
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
We compete
in the
U.S. and
international
reinsurance
and insurance
markets
with numerous
global competitors.
Our
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 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
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
reinsurance
and
insurance and
market
conditions
historically
have
been
competitive.
Generally,
there
is
ample reinsurance market conditions continued to be very competitive, particularly in the property catastrophe and casualty reinsurance lines of business.  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
reinsurance
and
insurance and reinsurance
risk
exposure.
The capital
markets
demand for
these products
is being primarily
driven by the current low interest rate environment and
the desire
to achieve
greater
risk
diversification
and
potentially
higher
returns
on
their
investments.
This increased
competition is
generally having
has
a
negative
impact
on
rates,
terms
and
conditions;
however,
the
impact
varies
widely
by
market
and
coverage.
Based
on
recent
competitive
behaviors
in
the
reinsurance
and
insurance
industry,
natural
catastrophe
events
and
the
macroeconomic
backdrop,
there
has
been
some
dislocation
in
the
market
which
we
expect
to
have
a
positive
impact on rates and terms and conditions; however,conditions
generally,
though local market specificities can
vary.
The increased
frequency of
catastrophe
losses experienced
throughout
recent years
appears to
be pressuring
the
increase of rates.
As business activity continues to regain
strength after the impact varies widely by market pandemic
and coverage.current macroeconomic

uncertainty,
rates
also
appear
to
be
firming
in
most
lines
of
business,
particularly
in
the
casualty
lines
that
had
Rates tend seen
significant
losses
such
as
excess
casualty
and
directors’
and
officers’
liability.
Other
casualty
lines
are
experiencing
modest
rate
increase,
while
some
lines
such
as
workers’
compensation
were
experiencing
softer
market
conditions.
The
impact
on
pricing
conditions
is
likely
to fluctuate by specific region
change
depending
on
the
line
of
business
and
geography.
Our
capital
position
is
a
source
of
strength,
with
high
quality
invested
assets,
significant
liquidity
and
a
low
operating expense
ratio. Our diversified
global platform with
its broad mix of
products, distribution
and products, particularly areas recently impacted by large catastrophic events.  There was an unprecedented series of catastrophes geography
is resilient.
The war
in the third quarter of 2017 with Hurricanes Harvey, Irma
Ukraine
is ongoing
and Maria, an
evolving
event.
Economic
and legal
sanctions
have
been levied
against
Russia, specific named individuals
and entities connected
to the Russian government,
as well as a significant earthquake in Mexico City.  Additional catastrophe events occurred in October 2017 with Hurricanes Nate and Ophelia and 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, there was some firming businesses
located
in the
Russian Federation
and/or owned
by Russian
nationals by
numerous countries,
including the
United States.
The
significant
political
and
economic
uncertainty
surrounding
the
war
and
associated
sanctions
have
impacted
economic and investment markets impacted by
both within Russia and around the 2016 catastrophes and as catastrophe losses continue to increase in 2017, there is a growing industry consensus that there will be a general firming of the (re)insurance markets resulting in rate increases, not only for catastrophe exposures, but also potentially for most other lines of business.world.

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 launched lines of business, as well as, product and geographic expansion in existing lines of business.  We are building a world-class
34
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.  We continue to employ our strategy of targeting business that offers the greatest profit potential, while maintaining balance and diversification in our overall portfolio.

32
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
March 31,
Increase/
(Dollars in millions)
2023
2022
(Decrease)
Gross written premiums
$
2,496
$
2,205
13.2%
Net written premiums
2,063
1,796
14.8%
REVENUES:
Premiums earned
$
2,068
$
1,829
13.1%
Net investment income
190
156
21.8%
Net gains (losses) on investments
22
(227)
-109.9%
Other income (expense)
(4)
(9)
-54.2%
Total revenues
2,276
1,749
30.2%
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
1,394
1,226
13.7%
Commission, brokerage, taxes and fees
436
385
13.5%
Other underwriting expenses
139
118
18.0%
Corporate expenses
6
6
11.5%
Interest, fees and bond issue cost amortization expense
32
24
33.1%
Total claims and expenses
2,007
1,758
14.2%
INCOME (LOSS) BEFORE TAXES
269
(9)
NM
Income tax expense (benefit)
49
(10)
NM
NET INCOME (LOSS)
$
220
$
1
NM
RATIOS:
Point
Change
Loss ratio
67.4%
67.0%
0.4
Commission and brokerage ratio
21.1%
21.0%
0.1
Other underwriting expense ratio
6.7%
6.4%
0.3
Combined ratio
95.2%
94.5%
0.7
At
At
Percentage
March 31,
December 31,
Increase/
(Dollars in millions)
2023
2022
(Decrease)
Balance sheet data:
Total investments and cash
$
19,996
$
19,195
4.2%
Total assets
28,783
27,957
3.0%
Loss and loss adjustment expense reserves
15,315
14,977
2.3%
Total debt
3,085
3,084
0.0%
Total liabilities
22,781
22,303
2.1%
Stockholder's equity
6,002
5,654
6.2%
(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)                        
35
33
Revenues.

Premiums.
Gross
written
premiums
increased
by
13.2%
to
$2.5
billion
for
the
three
months
ended
March
31,
Premiums.  Gross2023,
compared
to
$2.2
billion
for
the
three
months
ended
March
31,
2022,
reflecting
a
$27
million,
or
3.3%,
increase in our
insurance business and
a $264 million, or
19.1%, increase in our
reinsurance business.
The increase
in insurance
premiums
was
primarily due
to
increases
in property/short
tail
business
and other
specialty
lines of
business.
The
increase
in
reinsurance
premiums
was
primarily
due
to
increases
in
casualty
pro
rata
business,
property pro rata
business and financial lines of business.
Net written premiums increased
by 13.0%14.8% to $1,701.1$2.1 billion for the
three months ended March 31, 2023,
compared to
$1.8 billion
for the
three months
ended March
31, 2022,
which is
consistent
with the
percentage
change in
gross
written
premiums.
Premiums
earned
increased
by
13.1%
to
$2.1
billion
for
the
three
months
ended
March
31,
2023,
compared
to
$1.8
billion
for
the
three
months
ended
March
31,
2022.
The
change
in
premiums
earned
relative
to
net
written
premiums
was
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.
Other
Income
(Expense).
We
recorded
other
expense
of
$4
million
and
$9
million
for
the
three
months
ended
March
31,
2023
and
2022,
respectively.
The
change
was
primarily
the
result
of
fluctuations
in
foreign
currency
exchange rates.
Net Investment Income.
Refer to Consolidated
Investments Results Section below.
Net Gains (Losses) on Investments.
Refer to Consolidated Investments
Results Section below.
Claims and Expenses.
Incurred Losses
and Loss
Adjustment
Expenses.
The following
table presents
our incurred
losses and
LAE for
the
periods indicated.
Three Months Ended March 31,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2023
Attritional
$
1,300
62.9%
$
(2)
-0.1%
$
1,299
62.8%
Catastrophes
103
5.0%
(7)
-0.3%
96
4.6%
Total
$
1,403
67.8%
$
(9)
-0.4%
$
1,394
67.4%
2022
Attritional
$
1,138
62.3%
$
-
0.0%
$
1,138
62.3%
Catastrophes
80
4.4%
7
0.4%
87
4.8%
Total
$
1,219
66.7%
$
7
0.4%
$
1,226
67.0%
Variance 2023/2022
Attritional
$
162
0.6
pts
$
(2)
(0.1)
pts
$
160
0.5
pts
Catastrophes
22
0.6
pts
(14)
(0.7)
pts
8
(0.2)
pts
Total
$
184
1.2
pts
$
(16)
(0.8)
pts
$
168
0.4
pts
Incurred losses
and LAE
increased by
13.7% to
$1.4 billion
for the
three months
ended March
31, 2023
compared
to $1.2 billion
for the
three months
ended March
31, 2022, primarily
due to an
increase of $162
million in current
year
attritional
losses
and
an
increase
of
$22
million
in
current
year
catastrophe
losses.
The
increase
in
current
year
attritional
losses
was
mainly
due
to
the
impact
of
the
increase
in
premiums
earned.
The
current
year
catastrophe
losses of
$103 million
for the
three months
ended March
31, 2023
mainly related
to the
2023 Turkey
earthquakes
($65 million)
and the
2023 New
Zealand storms
($38 million).
The current
year catastrophe
losses of
$80 million for the three
months ended March
31, 2022 related to
2022 Australia floods ($71 million)
and the 2022
34
March U.S.
storms ($10
million). Prior year
incurred development
of $9 million
for the
three months
ended March
31, 2023 is primarily driven by favorable
movement on prior year catastrophes.
Commission, Brokerage,
Taxes
and Fees.
Commission, brokerage,
taxes and
fees increased
to $436 million
for the
three months
ended March
31, 2023
compared to
$385 million
for the
three months
ended March
31, 2022.
The
increase was mainly due to the impact of the increase
in premiums earned and changes in the mix of business
.
Other Underwriting Expenses.
Other underwriting expense
s
increased to
$139 million for
the three months
ended
March 31,
2023 compared
to $118
million for
the three
months
ended March
31, 2022.
The increase
was mainly
due to
the impact
of the
increase in
premiums earned
and increased
expenses related
to the
continued build
out
of the insurance platform.
Corporate
Expenses.
Corporate
expenses,
which
are
general
operating
expenses
that
are
not
allocated
to
segments, remained consistent
at $6 million for the three months endedSeptember 30, 2017, compared to $1,505.9 million for the three months ended September 30, 2016, reflecting a $263.6 million, or 26.1%, increase in our reinsurance business
March 31, 2023 and a $68.4 million, or 13.7%, decrease in our insurance business.  The increase in reinsurance premiums was mainly due to the new crop reinsurance transactions, increases in financial lines of 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.  Gross written premiums increased by 12.5% to $4,289.1 million for the nine months ended September 30, 2017, compared to $3,813.6 million for the nine months ended September 30, 2016, reflecting a $400.7 million, or 15.8%, increase in our reinsurance business and a $74.7 million, or 5.9%, increase in our insurance business.  The increase in reinsurance premiums was mainly due to the new crop reinsurance transactions, increases in treaty property and financial lines of business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter.  The rise in insurance premiums was primarily due to increases in many lines of business, including retail casualty, accident and health and surety, partially offset by the impact of the sale of Heartland.2022, respectively.

Net written premiums decreased by 8.3% to $570.8 million for the three months ended September 30, 2017, compared to $622.6 million for the three months ended September 30, 2016, and decreased by 5.9% to $1,437.5 million for the nine months ended September 30, 2017, compared to $1,527.9 million for the nine months ended September 30, 2016.  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 mainly related to affiliated quota share contracts. Premiums earned decreased by 6.9% to $518.5 million for the three months ended September 30, 2017, compared to $556.7 million for the three months ended September 30, 2016 and decreased by 4.6% to $1,457.8 million for the nine months ended September 30, 2017, compared to $1,527.4 million for the nine months ended September 30, 2016.  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% to $73.4 million for the three months ended September 30, 2017 compared with net investment income of $64.6 million for the three months ended September 30, 2016 and increased 4.7% to $206.2 million for the nine months ended September 30, 2017 compared with net investment income of $196.9 million for the nine months ended September 30, 2016.  Net pre-tax investment income as a percentage of average invested assets was 3.0% for the three months ended September 30, 2017, compared to 2.7% 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 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, respectively.  The net realized capital gains of $228.5 million were comprised of $227.5 million of gains from fair value re-measurements on equity securities and other invested assets and $2.4 million of gains from sales on our fixed maturity and equity securities, partially offset by $1.5 million of other-than-temporary impairments.  The net realized capital losses of $50.1 million for the three months ended September 30, 2016 were comprised of $30.9 million of losses from 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 gains from sales on our fixed maturity and equity securities.
36
Net realized capital gains were $254.0 million and net realized capital losses were $87.3 million for the nine months ended September 30, 2017 and 2016, 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 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") 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 $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.)                                   
37
Incurred losses and LAE increased to $1,331.6 million for the three months ended September 30, 2017 compared to $301.6 million for the three months ended September 30, 2016, primarily due to an increase of $986.9 million in current year catastrophe losses, an increase in current year attritional losses of $25.2 million and $19.8 million of favorable development on prior years catastrophe losses in 2016, primarily related to the 2011 Japan earthquake, which did not recur in 2017.  The increase in attritional losses was primarily due to the impact of changes in affiliated quota share contracts and changes in the mix of business.  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 million for the three months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million), 2016 U.S. Storms ($6.6 million), the Fort McMurray Canada wildfire ($5.0 million), the Taiwan earthquake ($2.3 million) and the Ecuador earthquake ($0.2 million).

Incurred losses and LAE increased by 104.9% to $1,918.5 million for the nine months ended September 30, 2017 compared to $936.2 million for the nine months ended September 30, 2016, primarily due to an increase of $961.7 million in current year catastrophe losses and favorable development of $37.0 million on prior year catastrophe losses in 2016, primarily related to the 2011 Japan earthquake, which did not recur in 2017.  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 million for the nine months ended September 30, 2016 were related to the Fort McMurray Canada wildfire ($26.9 million), the 2016 U.S. Storms ($24.9 million), the Ecuador earthquake ($11.6 million), the 2016 Taiwan earthquake ($7.5 million) and Hurricane Hermine ($6.8 million).

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 million for the nine months ended September 30, 2016.  The decreases were primarily due to the impact of the decrease in premiums earned and the impact of affiliated quota share contracts.

Other Underwriting Expenses.  Other underwriting expenses were $57.7 million and $64.1 million for the three months ended September 30, 2017 and September 30, 2016, respectively. The decrease for the three month period was primarily due to lower variable compensation costs.  Other underwriting expenses were flat at $181.8 million and $181.7 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.

Corporate Expenses.Corporate expenses, which are general operating expenses that are not allocated to segments, decreased slightly to $1.1 million from $1.8 million for the three months ended September 30, 2017 and 2016, respectively, and were flat at $6.2 million for the nine months ended September 30, 2017 and 2016, respectively.

Interest, Fees
and Bond Issue Cost
Amortization Expense.
Interest, fees
and other bond amortization were $7.2
expense was
$32 million
and $8.9 $24
million for
the three
months endedSeptember 30, 2017
March 31,
2023 and 2016,
2022, respectively.
Interest fees and other bond amortization were $24.0 million and $26.6 million for
expense
was mainly
impacted by
the nine months ended September 30, 2017 and 2016, respectively.  The decreases movement
in expense for both the three and nine month periods were primarily due
floating interest
rate
related
to the conversion of the long term
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 agreement
,
as well as variable interest
rate was 3.70% as of September 30, 2017.costs on borrowings
from FHLB.
38
Income Tax
Expense (Benefit).
We had an
income tax
expense of
$49 million and
benefit of $220.5 million and income tax expense of $22.4 $10
million for the
three
months
endedSeptember 30, 2017
March
31,
2023
and 2016,
2022,
respectively.  We had an
Income
tax
expense
is
primarily
a
function
of
the
geographic
location
of
the
Company’s
pre-tax
income
and
the
statutory
tax benefit of $153.3 million and income
rates
in
those
jurisdictions.
The
effective tax expense of $69.4 million for the nine months ended September 30, 2017 and 2016, respectively.  Income tax expense
rate (“ETR”) is
primarily a function of the Company's pre-tax income and the statutory tax rate, as affected
by tax-exempt
investment income, and
foreign tax
credits and as calculated underdividends.
Variations
in the annualized effective tax rate ("AETR") method.  Variations in income tax expenseETR generally
result from changes
in the relative
levels of pre-taxpre
-tax income, including
the impact of
catastrophe
losses, foreign
exchange gains
(losses) and net capital
gains (losses).  However, if on
investments, among
jurisdictions with
different tax rates.
On August 16, 2022, the AETR approach produces a year-to-date tax benefit which exceeds the amount which is estimated to be recoverable for the full year, then Inflation Reduction
Act of 2022 (“IRA”) was enacted. We
have evaluated
the tax benefit for provisions
of
the
IRA,
the
most
significant
of
which
are
the
corporate
alternative
minimum
tax
and
the
share
repurchase
excise tax and do not expect
the interim reporting periodlegislation to have a material
impact on our results of operations. As the
IRS issues
additional guidance, we will be limited, as prescribed under ASC 740-270,evaluate any
impact to the estimated tax recoverable based on the year-to-date result.  The decrease 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.

our consolidated financial statements.
Net Income (Loss).
Our
net loss
income
was $389.7
$220
million
and our net income was $76.3
$1
million,
for
the
three
months
endedSeptember 30, 2017
March
31,
2023
and 2016,
2022,
respectively. Our net loss was $184.9 million and our net income was $186.7 million for the nine months ended September 30, 2017 and 2016, respectively. 
The changes were primarily driven by the
financial component fluctuations explained above.

Ratios.
Our combined
ratio
increased
by 194.0
0.7 points
to 274.6%
95.2% for
the three
months
ended March
31, 2023,
compared
to
94.5% for the three
months ended September 30, 2017, compared to 80.6% for the three months ended September 30, 2016, and March
31, 2022. The loss
ratio component
increased by 66.6 points to 154.2% for the nine months ended September 30, 2017, compared to 87.6% for the nine months ended September 30, 2016.  The loss ratio components increased 202.6 points and 70.3 0.4
points for the three
months ended
March 31,
2023 over
the same
period last
year mainly
due to
an increase
of $22
million in
current
year catastrophe
losses.
The commission and nine brokerage
ratio components
increased slightly to
21.1% for the three
months
ended
March
31,
2023
compared
to
21.0%
for
the
three
months
ended
March
31,
2022.
The
other
underwriting expense
ratios
increased to
6.7% from
6.4% for
the three
months ended September 30, 2017, respectively, over the same period last year.  The changes
March 31,
2023 and
2022,
respectively.
These variances were mainly due to the increases in current year catastrophe losses.  The commission and brokerage ratio components decreased to 6.7% from 14.9% for the three months ended September 30, 2017 and 2016, respectively, and decreased to 10.1% from 14.4% for the nine months ended September 30, 2017 and 2016, respectively.  The decreases reflect
changes in the mix of business, the impact of affiliated quota share contracts and the impactbusiness.
Stockholder’s Equity.
Stockholder’s
equity increased
by $348 million
to $6.0 billion
at March
31, 2023 from reinstatement premiums.  The other underwriting expense ratios decreased to 11.1% from 11.5% for the three months ended September 30, 2017 and 2016, respectively, and increased to 12.5% from 11.9% for the nine months ended September 30, 2017 and 2016, respectively.  The decrease in the three month period was mainly due to lower variable compensation costs.  The increase in the nine month period was due to costs associated with the continued expansion of the insurance business, partially offset by lower variable compensation costs.
$5.7 billion

Stockholder's Equity.
Stockholders' equity decreased by $130.9 million to $5,167.6 million at September 30, 2017 from $5,298.6 million at December 31, 2016,
2022,
principally
as
a
result
of $184.9
$220
million
of
net loss, partially offset
income,
$121
million
of
net
unrealized
appreciation
on
investments,
net
of
tax,
and
$7
million
of
net
foreign
currency
translation
adjustments.
The
movement
in
the
unrealized appreciation on investments
was driven by $43.2 million of net foreign currency translation adjustments, $5.4 million of net benefit plan obligation adjustments, $5.2 million of net unrealized depreciationthe change in interest
rates on investments, net of tax and $0.2 million of share-based compensation transactions.the Company’s
fixed maturity
- available for sale portfolio.
39
35
Consolidated Investment
Results

Net Investment Income.
Net investment
income increased by 13.7%
to $73.4 $190
million for
the three
months ended September 30, 2017
March 31,
2023 compared
to $64.6 $156
million for
the three
months ended September 30, 2016.  Net investment
March 31,
2022. The
increase was
primarily the
result of
higher income increased by 4.7% to $206.2 million for the nine months ended September 30, 2017 compared to $196.9 million for the nine months ended September 30, 2016.  The increases for the three
from
fixed maturity securities and nine month periods were primarilyshort-term
investments due to an increase in limited partnership income and higher income from the growing fixed income portfolio,
rising reinvestment rates
,
partially offset by lower dividendreductions
in income
from our equity portfolio.limited
partnerships.
The limited
partnership
income primarily
reflects
changes in
their reported

net asset
values. As
such, until
these asset
values are
monetized and
the resultant
income is
distributed,
they are
subject to future increases or decreases in the asset
value, and the results may be volatile.
The following table shows the components
of net investment income for
the periods indicated:

Three Months Ended
  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.)                

March 31,
(Dollars in millions)
2023
2022
Fixed maturities
$
174
$
94
Equity securities
1
4
Short-term investments and cash
11
-
Other invested assets
Limited partnerships
(24)
44
Dividends from preferred shares of affiliate
8
8
Other
22
12
Gross investment income before adjustments
192
162
Funds held interest income (expense)
3
3
Interest income from Parent
5
2
Gross investment income
200
167
Investment expenses
(10)
(10)
Net investment income
$
190
$
156
(Some amounts may not reconcile due to rounding.)
The following tables showtable shows a comparison
of various investment yields
for the periods indicated:

Three Months Ended
  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%

March 31,
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Annualized pre-tax yield on average cash and invested assets3.0% 2.7% 2.8% 2.8%
Annualized after-tax yield on average cash and invested assets2.1% 1.9% 2.0% 1.9%
2023
2022
Annualized pre-tax yield on average cash and invested assets
3.7%
3.3%
Annualized after-tax yield on average cash and invested assets
3.0%
2.6%
40
36
Net Realized Capital Gains (Losses). on Investments.
The following table presents the composition
of our net realized capital gains (losses) on investments
for the periods indicated:

Three Months Ended March 31,
  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.)                        

(Dollars in millions)
2023
2022
Variance
Realized gains (losses) from dispositions:
Fixed maturity securities available for sale
Gains
$
3
$
3
$
(1)
Losses
(4)
(8)
4
Total
(1)
(5)
4
Equity securities
Gains
7
4
3
Losses
-
(12)
12
Total
7
(8)
15
Other invested assets
Gains
-
4
(4)
Losses
-
-
-
Total
-
4
(4)
Total net realized gains (losses) from dispositions
Gains
9
11
(2)
Losses
(4)
(20)
17
Total
5
(10)
15
Allowances for credit losses:
(10)
(2)
(9)
Gains (losses) from fair value adjustments:
Equity securities
3
(131)
134
Other invested assets
24
(85)
109
Total
27
(215)
242
Total net gains (losses) on investments
$
22
$
(227)
$
249
(Some amounts may not reconcile due to rounding.)
Net realized capital gains were $228.5 million and net realized capital losses were $50.1 million for(losses) on investments
during the three months ended September 30, 2017 and 2016, respectively.  For the three months ended September 30, 2017 we recorded $227.5 million of
March 31, 2023 primarily relate
to net realized capital gains due to from
fair value re-measurements on equity securities and other invested assets and $2.4adjustments of
$27 million as a result of net realized capital gains from salesmarket
increases during the first
quarter of fixed maturity 2023. In addition, we
recorded
$5
million
of
net
realized
gains
from
disposition
of
investments
and equity securities, partially offset by $1.5 million of other-than-temporary impairments.  For
recorded
an
increase
to
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
allowance for credit 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 and 2016 related primarily to adjusting the portfolios for overall market changes and individual credit shifts.

Net realized capital gains were $254.0 million and net realized capital losses were $87.3 million for the nine months ended September 30, 2017 and 2016, 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 recorded net realized capital losses of $28.0 million from the
41
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 and 2016 related primarily to adjusting the portfolios for overall market changes and individual credit shifts.

$10 million.
Segment Results.
The U.S. Reinsurance operation writes property Company
manages its
reinsurance
and casualty reinsuranceinsurance
operations
as autonomous
units and
key
strategic
decisions
are based on the aggregate operating
results and projections for these segments
of business.
The
Reinsurance
operation
writes
risks
on
a
worldwide
basis
in
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
companies.
Business
is
written
in
the
United
States
as
well as
through
branches
in
Canada
and
Singapore.
The
Insurance operation
writes property and
casualty insurance directly
and through brokers,
surplus lines brokers
and
general agents within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance directly, 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.

37
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 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.
Our
loss
and
LAE
reserves
are management's
management’s
best
estimate
of
our
ultimate
liability
for
unpaid
claims.
We
reevaluate
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.
Management’s
best
estimate
is
developed
through
collaboration
with
actuarial,
underwriting,
claims,
legal
and
finance
departments
and
culminates
with
the
input
of
reserve
committees.
Each
segment
reserve
committee
includes the
participation of
the relevant
parties from
actuarial, finance,
claims and
segment senior
management
and
has
the
responsibility
for
recommending
and
approving
management’s
best
estimate.
Reserves
are
further
reviewed
by
Everest’s
Chief
Reserving
Actuary
and
senior
management.
The
objective
of
such
process
is
to
determine a single best estimate
viewed by management to be the best
estimate of ourits 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.liability.

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) 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)                                
indicated.
42
Premiums.Three Months Ended March 31,
(Dollars in millions)
2023
2022
Variance
% Change
Gross written premiums
$
1,643
$
1,380
$
264
19.1%
Net written premiums
1,373
1,185
188
15.8%
Premiums earned
$
1,367
$
1,209
$
157
13.0%
Incurred losses and LAE
929
820
109
13.3%
Commission and brokerage
361
315
46
14.5%
Other underwriting expenses
39
31
8
25.0%
Underwriting gain (loss)
$
38
$
43
$
(5)
-11.3%
Point Chg
Loss ratio
68.0%
67.8%
0.2
Commission and brokerage ratio
26.4%
26.1%
0.3
Other underwriting ratio
2.8%
2.6%
0.2
Combined ratio
97.2%
96.5%
0.7
(Some amounts may not reconcile due to rounding.)
(NM, not meaningful)
Premiums.
Gross written premiums
increased by 38.7%19.1% to $908.3 million$1.6
billion for the three
months ended September 30, 2017March 31,
2023
from $654.8 million
$1.4
billion
for
the
three
months
ended September 30, 2016,
March
31,
2022
primarily
due
to the new crop reinsurance
increases
in
casualty
pro
rata
business, related to the sale property
pro rata
business and
financial lines
of Heartland and the influx of reinstatement premiums due to the catastrophe losses.  business.
Net written
premiums decreased
increased
by 9.7% 15.8%
to $295.6 million
$1.4
billion
for
the
three
months
ended September 30, 2017
March
31,
2023
compared
to $327.2 million
$1.2
billion
for
the
three
months
ended September 30, 2016.
March
31,
2022,
which
is
consistent
with
the
percentage
change
in
gross
written
premiums.
Premiums
earned
increased
by
13.0% to
$1.4
billion
for
the
three
months
ended
March
31,
2023 compared
to
$1.2 billion
for
the
three
months
ended
March
31,
2022.
The difference between
change
in
premiums
earned
relative
to
net
written
premiums
is
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 2.8% to $242.4 million for the three months ended September 30, 2017 compared to $249.2 million for the three months ended September 30, 2016.  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, 2017 from $1,597.0 million for the nine months ended September 30, 2016, 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, 2016. 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, 2016.  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.

38
Incurred Losses and LAE.
The following table presents tables present
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

Three Months Ended March 31,
43Current
Ratio %/
Prior
  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.)                                   

Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2023
Attritional
$
834
61.1%
$
1
0.0%
$
835
61.1%
Catastrophes
101
7.4%
(7)
-0.5%
94
6.9%
Total segment
$
935
68.4%
$
(6)
-0.5%
$
929
68.0%
2022
Attritional
$
738
61.0%
$
-
0.0%
$
738
61.0%
Catastrophes
75
6.2%
7
0.6%
82
6.8%
Total segment
$
813
67.2%
$
7
0.6%
$
820
67.8%
Variance 2023/2022
Attritional
$
97
0.1
pts
$
-
-
pts
$
97
0.1
pts
Catastrophes
26
1.2
pts
(14)
(1.1)
pts
12
0.1
pts
Total segment
$
122
1.3
pts
$
(14)
(1.1)
pts
$
109
0.2
pts
Incurred losses increased
by 13.3% to $678.9 $929 million for
the three months
ended March 31, 2023,
compared to $820
million for the three months
ended September 30, 2017 compared to $137.2 million for the three months ended September 30, 2016,March 31, 2022. The increase
was primarily due to an increase
of $537.2$97 million in
current
year
attritional
losses
and
an
increase
of
$26
million
in
current
year
catastrophe
losses.
The
increase
in
current
year
attritional
losses was
mainly related
to
the impact
of the
increase
in premiums
earned.
The current
year catastrophe
losses
of $101
million for
the three
months ended
March 31,
2023 related
primarily to
the 2023
Turkey
earthquakes
($65 million)
and the
2023 New
Zealand storms
($36 million).
The $75
million of
current year
catastrophe losses.  The current
losses
for
the
three
months
ended
March
31,
2022
related
primarily
to
2022
Australia
floods
($71
million) and
the 2022
March U.S.
storms ($5
million). Prior
year catastrophe losses incurred
development
of $551.6 $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).March 31, 2023 is primarily driven

Incurred losses increased by 152.8% to $919.1 million for the nine months ended September 30, 2017 compared to $363.6 million for the nine months ended September 30, 2016, due to an increase of $537.4 million in current year catastrophe losses, favorable development of $16.1 million movement
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).catastrophes.

Segment Expenses.
Commission and
brokerage expenses decreased
expense increased
by 34.1% 14.5%
to $31.7 $361
million for
the three
months
ended September 30, 2017March
31, 2023
compared
to $48.1 $315
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.  March
31, 2022.
The decreases are increase
was
mainly due to the impact of the new crop reinsurance contract which generally has a lower expense ratio,increase in premiums earned and
changes in the impactmix of affiliated quota share contractsbusiness.
Segment other
underwriting expenses
increased to
$39 million
for the
three months
ended March
31, 2023
from
$31 million
for the
three months
ended March
31, 2022.
The increase
was due
to increased
personnel and
direct
and indirect expenditures supporting the impactincreased
premium volume of the decreasesegment.
39
Insurance.
The
following
table
presents
the
underwriting
results
and
ratios
for
the
Insurance
segment
for
the
periods
indicated.
Three Months Ended March 31,
(Dollars in premiums earned.millions)

2023
Segment other2022
Variance
% Change
Gross written premiums
$
852
$
825
$
27
3.3%
Net written premiums
690
611
79
12.9%
Premiums earned
$
702
$
619
$
83
13.3%
Incurred losses and LAE
465
405
60
14.7%
Commission and brokerage
76
69
6
9.0%
Other underwriting expenses decreased
100
87
13
15.5%
Underwriting gain (loss)
$
61
$
58
$
3
5.4%
Point Chg
Loss ratio
66.2%
65.4%
0.8
Commission and brokerage ratio
10.8%
11.2%
(0.4)
Other underwriting ratio
14.3%
14.0%
0.3
Combined ratio
91.3%
90.6%
0.7
(Some amounts may not reconcile due to $12.1rounding.)
(NM, not meaningful)
Premiums.
Gross written
premiums increased by
3.3% to $852 million
for the three
months ended September 30, 2017 from $14.3
March 31, 2023
compared
to $825
million for
the three
months
ended March
31, 2022.
The increase
in insurance
premiums
was
primarily
due
to
increases
in
property/short
tail
business
and
other
specialty
lines
of
business.
Net
written
premiums
increased
by
12.9%
to
$690
million
for
the
three
months
ended
March
31,
2023
compared
to
$611
million for the
three months
ended March
31, 2022. The
higher percentage
of net written
premiums compared
to
gross
written
premiums
was
mainly
due
to
business
mix
and
higher
retention
in
certain
lines
of
business.
Premiums earned
increased 13.3% to
$702 million for
the three months
ended September 30, 2016.  The decrease for the three month period was primarily due March
31, 2023 compared
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.$619
44
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, 2017 compared to $353.2 million for the three months ended September 30, 2016, primarily due to the increase in Middle East, African March
31, 2022.
Incurred Losses
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, 2016. 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, 2016.  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, 2017 compared to $939.9 million for the nine months ended September 30, 2016, 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, 2016.  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, 2016.  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.LAE.
45
Incurred Losses and LAE.The following table presents
tables present
the incurred
losses and
LAE for
the International Insurance
segment for
the periods indicated.

Three Months Ended March 31,
  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

Current
  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.)                                   

Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2023
Attritional
$
466
66.4%
$
(2)
-0.3%
$
464
66.1%
Catastrophes
2
0.2%
-
-0.1%
1
0.2%
Total segment
$
468
66.6%
$
(3)
-0.4%
$
465
66.2%
2022
Attritional
$
401
64.7%
$
-
-0.1%
$
400
64.7%
Catastrophes
5
0.8%
-
0.0%
5
0.8%
Total segment
$
406
65.5%
$
(1)
-0.1%
$
405
65.4%
Variance 2023/2022
Attritional
$
65
1.7
pts
$
(2)
(0.2)
pts
$
63
1.4
pts
Catastrophes
(3)
(0.6)
pts
-
(0.1)
pts
(4)
(0.6)
pts
Total segment
$
62
1.1
pts
$
(2)
(0.3)
pts
$
60
0.8
pts
Incurred losses and
LAE increased by
14.7% to $410.5$465 million
for the three
months ended September 30, 2017March
31, 2023 compared
to
$405 million
for
the three
months
ended March
31, 2022,
mainly due
to
an increase
of $65
million
in current
year attritional
losses which
is primarily
related to
the impact
of the
increase in
premiums earned.
The $2
million
of current
year catastrophe
losses for
the three
months ended
March 31,
2023, related
to $41.8the
2023 New
Zealand
40
storms. The
$5 million
of current
year catastro
phe losses
for the
three months
ended September 30, 2016,March
31, 2022,
related to
the 2022 March
U.S. storms.
Prior year
incurred development
of $3 million
for the
three months
ended March
31,
2023 is 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 ofdriven by favorable development
movement 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).catastrophes.

Segment
Expenses.
Incurred losses
Commission
and LAE
brokerage
increased
by 169.7%
9.0%
to $557.4
$76
million
for
the nine
three
months ended September 30, 2017 compared to $206.7 million for the nine months ended September 30, 2016, 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, 2017 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
March
46
31,
2023 compared
to
$69 million
for
the
three
months
ended
March
31,
2022. The
increase
was
mainly
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, 2017 compared to $30.2 million for the three months ended September 30, 2016. Commission and brokerage decreased 12.2% to $72.4 million for the nine months ended September 30, 2017 compared to $82.4 million for the nine months ended September 30, 2016.  The decreases were due to the impact of the decreasesincrease in premiums earned the impact of affiliated quota share agreements and
changes in the mix of business.

Segment
other
underwriting
expenses decreased
increased
to
$100
million
for
the
three
months
ended
March
31,
2023
compared to
$87 million
for the
three months
ended March
31, 2022.
The increase
was mainly
due to
the impact
of the
increase
in
premiums
earned
and
increased
expenses
related
to
the
continued
build out
of the
insurance
platform.
Liquidity and Capital Resources
Capital.
Stockholder’s
equity
at
March
31,
2023
and
December
31,
2022
was
$6.0
billion
and
$5.7
billion,
respectively.
Management’s objective in managing
capital is to $8.2ensure its overall
capital level, as well as the capital
levels of its
operating subsidiaries,
exceed the
amounts required
by regulators,
the amount needed
to support our
current
financial
strength
ratings
from
rating
agencies
and
our
own
economic
capital
models.
The
Company’s
capital has historically exceeded
these benchmark levels.
Our
main
operating
company,
Everest
Re
is
regulated
by
the
State
of
Delaware,
Department
of
Insurance.
The
regulatory body
has its own
capital adequacy
models based
on statutory
capital as
opposed to
GAAP basis
equity.
Failure to meet the required
statutory capital
levels could result in various regulatory
restrictions.
The regulatory targeted
capital and the actual statutory
capital for Everest
Re was as follows:
Everest Re (1)
At December 31,
(Dollars in millions)
2022
2021
Regulatory targeted capital
$3,353
$2,960
Actual capital
$5,553
$5,717
(1)
Regulatory targeted capital represents
200% of the RBC authorized control level calculation for
the applicable year.
Our financial
strength
ratings
as determined
by A.M.
Best, Standard
& Poor’s
and Moody’s
are important
as they
provide our customers
and investors
with an independent
assessment of our
financial strength
using a rating
scale
that provides
for relative
comparisons.
We
continue
to
possess
significant
financial flexibility
and access
to debt
and equity
markets as
a result
of our
financial strength,
as evidenced
by the
financial strength
ratings as
assigned
by independent rating agencies.
We maintain
our own
economic capital
models to monitor
and project
our overall
capital, as
well as the
capital at
our operating
subsidiaries.
A key
input to
the economic
models is
projected
income and
this input
is continually
compared to actual results, which may
require a change in the capital strategy.
We
may
continue,
from
time
to
time, to
seek
to
retire
portions
of our
outstanding
debt securities
through
cash
repurchases,
in open-market
purchases,
privately
negotiated
transactions
or otherwise.
Such repurchases,
if any,
will be subject
to and
depend on
prevailing market
conditions, our
liquidity requirements,
contractual
restrictions
and
other
factors.
The
amounts
involved
in
any
such
transactions,
individually
or
in
the
aggregate,
may
be
material.
Liquidity.
Our liquidity requirements are generally
met from positive cash flow
from operations.
Positive cash flow
results
from
reinsurance
and
insurance
premiums
being
collected
prior
to
disbursements
for
claims,
which
disbursements generally
take place
over an extended
period after
the collection of
premiums, sometimes
a period
41
of
many
years.
Collected
premiums
are
generally
invested,
prior
to
their
use
in
such
disbursements,
and
investment
income
provides
additional
funding
for
loss
payments.
Our
net
cash
flows
from
operating
activities
were $384 million and $531 million for the three
months ended September 30, 2017March 31, 2023 and 2022, respectively.
If
disbursements
for
claims
and
benefits,
policy
acquisition
costs
and
other
operating
expenses
were
to
exceed
premium inflows, cash flow from $9.2
reinsurance and insurance
operations would be negative.
The effect on cash flow
from
insurance
operations
would
be
partially
offset
by
cash
flow
from
investment
income.
Additionally,
cash
inflows
from
investment
maturities
-
both
short-term
investments
and
longer-term
maturities
are
available
to
supplement
other
operating
cash
flows.
We
do
not
expect
to
supplement
negative
insurance
operations
cash
flows from investment dispositions.
As
the
timing
of payments
for
claims
and
benefits
cannot
be predicted
with
certainty,
we
maintain
portfolios
of
long-term
invested
assets
with
varying
maturities,
along
with
short-term
investments
that
provide
additional
liquidity
for
payment
of
claims.
At
March
31,
2023
and
December
31,
2022,
we
held
cash
and
short-term
investments
of
$1.31
billion
and
$1.29
billion,
respectively.
Our
short-term
investments
are
generally
readily
marketable
and
can
be
converted
to
cash.
In
addition
to
these
cash
and
short-term
investments,
at
March
31,
2023, we
had
$694 million
of
fixed
maturity
securities
- available
for the three months ended September 30, 2016.  The decrease for the three month period is
sale
maturing
within
one
year
or
less,
$3.5
billion
maturing
within
one
to
five
years
and
$2.7
billion
maturing
after
five
years.
Our
$158
million
of
equity
securities are comprised primarily due of publicly
traded securities that we believe
can be easily liquidated.
We believe
that these
fixed
maturity and
equity securities,
in conjunction
with the
short-term
investments
and positive
cash
flow
from
operations,
provide
ample
sources
of
liquidity
for
the
expected
payment
of
losses
in
the
near
future.
We
do not
anticipate
selling a
significant
amount
of securities
to lower variable compensation costs.  Segment other underwriting expenses increased slightly to $26.3 million for the nine months ended September 30, 2017 from $25.0 million for the nine months ended September 30, 2016.pay
losses and
LAE.
At
March 31,
2023 we
had

$834
million
of
net
pre-tax
unrealized
depreciation
related
to
fixed
maturity
-
available
for
sale
securities,
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, 2017 compared to $498.0 million for the three months ended September 30, 2016.  This decrease was primarily due to the salecomprised of Heartland, which accounted for $162.4$871 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, suretypre-tax unrealized
depreciation 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, 2016.  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, 2016.  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% to $1,351.5 million for the nine months ended September 30, 2017 compared to $1,276.8 million for the nine months ended September 30, 2016. Excluding the impact of the sale of Heartland, which accounted for $229.9$37 million of gross written premiums pre-tax
unrealized appreciation.
Management
generally
expects
annual
positive
cash
flow from
operations,
which
reflects
the
strength
of overall
pricing.
However,
given
the
recent
set of
catastrophic
events,
cash
flow from
operations
may
decline and
could
become negative
in the nine months
near term
as significant
47
claim payments
ended September 30, 2016, gross 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% to $442.2 million for the nine months ended September 30, 2017 compared to $462.8 million for the nine months ended September 30, 2016.  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 of affiliated quota share agreements.  Premiums earned increased 0.9% to $449.4 million for the nine months ended September 30, 2017 compared to $445.6 million for the nine months ended September 30, 2016.  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.made

Incurred Losses and LAE.  The following table presents 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
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% to $242.1 million for the three months ended September 30, 2017 compared to $122.5 million for the three months ended September 30, 2016, mainly due to an increase of $109.6 million in current year catastrophe losses and an increase 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, 2017 related to Hurricane Harvey ($50.8 million), Hurricane Irma ($50.1 million) and Hurricane Maria ($8.7 million). There were no current year
the catastrophes.
However,
as indicated
above, the
Company has
ample liquidity to
settle its
catastrophe
claims and/or
any payments
due for
its catastrophe losses for the three months ended September 30, 2016.bond progra
48
Incurred losses and LAE increased by 20.8% to $442.0 million for the nine months ended September 30, 2017 compared to $366.0 million for the nine months ended September 30, 2016, mainly due to an increase of $97.7 million in current catastrophe losses, partially offset by a decrease of $22.6 million in current year attritional losses. The decrease in current year attritional losses primarily related to changes in the mix of business and the impact of affiliated quota share agreements. The current year catastrophe losses of $114.4 million for the nine months ended September 30, 2017 primarily related 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). The $16.7 million of current year catastrophe losses for the nine months ended September 30, 2016 were due to the 2016 U.S. storms ($15.0 million) and the Fort McMurray Canada wildfire ($1.7 million).

Segment Expenses.  Commission and brokerage decreased to ($22.3) million for the three months ended September 30, 2017 compared to $4.5 million for the three months ended September 30, 2016.  Commission and brokerage decreased to ($40.1) million for the nine months ended September 30, 2017 compared to ($10.9) million for the nine months ended September 30, 2016. The decreases were mainly due to the impact of changes in the mix of business and the impacts from affiliated quota share agreements.

Segment other underwriting expenses decreased to $37.4 million for the three months ended September 30, 2017 compared to $40.7 million for the three months ended September 30, 2016. Segment other underwriting expenses decreased to $114.9 million for the nine months ended September 30, 2017 compared to $116.8 million for the nine months ended September 30, 2016.  These decreases were mainly due to lower variable compensation costs.

m.
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
(collectively,
“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 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 capital structure and other factors, are used to develop a net liability analysis.  investments
provide liquidity.
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.

42
Interest
Rate
Risk.
Our $10.2
$20.0
billion
investment
portfolio,
at September 30, 2017,
March
31,
2023,
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 million
$2.2
billion
of
mortgage-backed
securities
in
the $6,039.4 million
$14.2
billion
fixed
maturity
portfolio.
Prepayment
risk results
from potential
accelerated
principal
payments
that shorten
the average
life and
thus the
expected yield of the security.
49
The
table
below
displays
the
potential
impact
of market
fair
value
fluctuations
and
after-tax
unrealized
appreciation
on
our fixed
maturity
portfolio (including $230.0
(including
$822 million
of short-termshort
-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 rates.rate
environments were
taken into
account. 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 fair
value
change
under the
various interest rate
change scenarios.

Impact of Interest Rate Shift in Basis Points
  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)

At March 31, 2023
(Dollars in millions)
-200
-100
0
100
200
Total Fair Value
$
15,735
$
15,384
$
15,033
$
14,682
$
14,331
Fair Value Change from Base (%)
4.7%
2.3%
0.0%
-2.3%
-4.7%
Change in Unrealized Appreciation
After-tax from Base ($)
$
554
$
277
$
-
$
(277)
$
(554)
We had $9,969.1 million
$15.3 billion and $8,331.3 million$15.0
billion of gross
reserves for losses
and LAE as of September 30, 2017
March 31, 2023 and
December 31, 2016,
2022, 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 present opposite
of the
interest
rate
impacts on
the fair
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.
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 fair
value
and after-tax after
-tax
change
in fair/market fair
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, 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 

Impact of Percentage Change in Equity Fair Value
Foreign Currency Risk.  Foreign currency risk is the potential changeAt March 31, 2023
(Dollars in value, income and cash flow arising from adverse changes in foreign currency exchange rates.  Each of our non-U.S. ("foreign") operations maintains capital in the currencymillions)
-20%
-10%
0%
10%
20%
Fair Value of the Equity Portfolio
$
127
$
142
$
158
$
174
$
190
After-tax Change in Fair Value
(25)
(13)
-
13
25
43
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”)
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 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 fair
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.
50
SAFE HARBOR DISCLOSURE
This report
contains forward-lookingforward
-looking statements
within the meaning
of the U.S.
federal securities
laws. We
intend
these forward-looking statements forward
-looking statement
s
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 include:
●
the effects of catastrophic
and pandemic events on our financial statements;
●
estimates of our catastrophe
exposure;
●
information regarding our
reserves for losses and LAE, LAE;
●
our failure to accurately
assess underwriting risk;
●
decreases in pricing for property
and casualty reinsurance and insurance;
●
our ability to maintain our financial strength
ratings;
●
the failure of our insured, intermediaries
and reinsurers to satisfy their
obligations;
●
our inability or failure to purchase reinsurance;
●
consolidation of competitors,
customers and insurance and reinsurance
brokers;
●
the
effect
on
our
business
of the
highly
competitive
nature
of our
industry,
including
the
effect
of
new
entrants to, competing
products for and consolidation in
the (re)insurance industry;
●
our
ability
to
retain
our
key
executive
officers
and
to
attract
or
retain
the
executives
and
employees
necessary to manage our business;
●
the performance of our investment
portfolio;
●
our ability to determine any impairments
taken on our investments;
●
foreign currency exchange
rate fluctuations;
●
the effect of cybersecurity risks,
including technology breaches or failure, on
our business;
●
the CARES Act;
●
the impact of the Tax
Cut and Jobs Act and;
●
the adequacy of capital in relation to
regulatory required capital.
Forward-looking
statements
only
reflect
our provision for uncollectible balances, estimates
expectations
and
are
not
guarantees
of
performance.
These
statements
involve
risks,
uncertainties
and
assumptions.
Actual
events
or
results
may
differ
materially
from
our catastrophe exposure, the effects of catastrophic events on
expectations.
Important
factors
that
could
cause
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-lookingforward
-looking statements,
whether as a result
of new information, future events
or otherwise.

44
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
As participation
of
the end
Chief
Executive
Officer
and
Chief
Financial
Officer,
of
the period covered by this report,
effectiveness
of
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
(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 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.

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.


51
ITEM 1A.
RISK FACTORS

No material changes.


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

None.


ITEM 3.
DEFAULTS
UPON SENIOR SECURITIES

None.
None.


45
ITEM 4.
MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5.
OTHER INFORMATION

None.
None.

ITEM 6.
EXHIBITS

Exhibit Index:
Exhibit No.
Description
   31.1Section 302 Certification of Dominic J. Addesso
   31.2Section 302 Certification of Craig Howie
   32.1Section 906 Certification of Dominic J. Addesso and Craig Howie
   101.INSXBRL Instance Document
   101.SCHXBRL Taxonomy Extension Schema
   101.CALXBRL Taxonomy Extension Calculation Linkbase
   101.DEFXBRL Taxonomy Extension Definition Linkbase
   101.LABXBRL Taxonomy Extension Labels Linkbase
   101.PREXBRL Taxonomy Extension Presentation Linkbase


Exhibit Index:
Exhibit No.
Description
31.1
31.2
32.1
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
104
Cover Page Interactive
Data File (embedded within the Inline XBRL document)
52
46
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)
/S/ MARK KOCIANCIC

Mark Kociancic
Everest Reinsurance Holdings, Inc.
(Registrant)
/S/ CRAIG HOWIE
Craig Howie
Executive Vice President and
Chief Financial Officer
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

Dated:  November 14, 2017
May 11, 2023