Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | XL GROUP LTD | |
Entity Central Index Key | 875,159 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 258,287,127 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities available for sale (''AFS''), at fair value (amortized cost: 2018 - $30,268,346; 2017 - $30,157,581) | $ 30,656,628 | $ 30,928,988 |
Short-term investments AFS, at fair value (amortized cost: 2018 - $500,844; 2017 - $816,638) | 500,170 | 815,481 |
Fixed maturities trading, at fair value (amortized cost: 2018 - $2,055,722; 2017 - $1,946,501) | 2,084,251 | 2,006,385 |
Short-term investments trading, at fair value (amortized cost: 2018 - $7,428; 2017 - $14,969) | 7,425 | 14,965 |
Equity securities, at fair value (cost: 2018 - $607,427; 2017 - $638,455) | 637,872 | 713,967 |
Investments in affiliates | 1,900,105 | 1,911,996 |
Other investments | 1,186,983 | 1,163,863 |
Total investments | 36,973,434 | 37,555,645 |
Cash and cash equivalents | 3,484,763 | 3,435,954 |
Restricted cash | 155,023 | 157,497 |
Accrued investment income | 265,701 | 272,149 |
Deferred acquisition costs and value of business acquired | 1,317,797 | 1,102,474 |
Ceded unearned premiums | 2,950,077 | 2,198,217 |
Premiums receivable | 7,988,469 | 6,934,482 |
Reinsurance balances receivable | 1,210,620 | 930,114 |
Unpaid losses and loss expenses recoverable | 7,271,013 | 7,247,723 |
Receivable from investments sold | 258,084 | 201,515 |
Goodwill and other intangible assets | 2,230,506 | 2,225,751 |
Deferred tax asset | 356,667 | 332,024 |
Other assets | 875,809 | 842,691 |
Total assets | 65,337,963 | 63,436,236 |
Liabilities: | ||
Unpaid losses and loss expenses | 29,701,568 | 29,696,779 |
Deposit liabilities | 982,963 | 1,042,677 |
Future policy benefit reserves | 3,680,958 | 3,610,926 |
Funds withheld on GreyCastle life retrocession arrangements (net of future policy benefit reserves recoverable: 2018 - $3,261,122; 2017 - $3,191,584) | 989,140 | 999,219 |
Unearned premiums | 9,687,293 | 8,307,431 |
Notes payable and debt | 3,240,461 | 3,220,769 |
Reinsurance balances payable | 4,432,331 | 3,706,116 |
Payable for investments purchased | 317,339 | 332,989 |
Deferred tax liability | 57,995 | 57,574 |
Other liabilities | 1,012,693 | 1,000,436 |
Total liabilities | 54,102,741 | 51,974,916 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Authorized shares, 999,990,000, par value $0.01; common shares issued and outstanding (2018 - 258,171,836; 2017 - 256,033,895) | 2,582 | 2,560 |
Additional paid in capital | 7,809,895 | 7,757,940 |
Accumulated other comprehensive income | 312,255 | 889,431 |
Retained earnings | 1,503,797 | 1,198,386 |
Shareholders' equity attributable to XL Group Ltd | 9,628,529 | 9,848,317 |
Non-controlling interest in equity of consolidated subsidiaries | 1,606,693 | 1,613,003 |
Total shareholders' equity | 11,235,222 | 11,461,320 |
Total liabilities and shareholders' equity | $ 65,337,963 | $ 63,436,236 |
UNAUDITED CONSOLIDATED BALANCE3
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized cost of fixed maturities | $ 30,268,346 | $ 30,157,581 |
Equity securities, cost | 607,427 | 638,455 |
Amortized cost of short-term investments, available for sale | 500,844 | 816,638 |
Amortized cost of fixed maturities, trading | 2,055,722 | 1,946,501 |
Amortized cost of short-term investments, trading | 7,428 | 14,969 |
Future policy benefit reserves recoverable | $ 3,261,122 | $ 3,191,584 |
Ordinary shares, shares authorized (in shares) | 999,990,000 | 999,990,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, shares issued (in shares) | 258,171,836 | 256,033,895 |
Ordinary shares, shares outstanding (in shares) | 258,171,836 | 256,033,895 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Revenues: | |||
Net premiums earned | $ 2,600,288 | $ 2,522,791 | |
Net investment income | 218,481 | 200,532 | |
Realized investment gains (losses): | |||
Total realized investment gains (losses) | (83,355) | 37,286 | |
Net realized and unrealized gains (losses) on derivative instruments | 4,221 | (7,069) | |
Income (loss) from investment affiliates | 45,669 | 38,261 | |
Fee income and other | 6,717 | 13,661 | |
Total revenues | 2,814,942 | 2,755,361 | |
Expenses: | |||
Net losses and loss expenses incurred | 1,622,006 | 1,583,456 | |
Claims and policy benefits | 10,307 | 7,291 | |
Acquisition costs | 463,827 | 435,869 | [1] |
Operating expenses | 472,563 | 468,038 | |
Foreign exchange (gains) losses | 9,841 | (3,336) | |
Interest expense | 53,545 | 50,711 | |
Total expenses | 2,632,089 | 2,542,029 | |
Income (loss) before income tax and income (loss) from operating affiliates | 182,853 | 213,332 | |
Income (loss) from operating affiliates | 10,282 | 13,609 | |
Provision (benefit) for income tax | 31,902 | 13,092 | |
Net income (loss) | 161,233 | 213,849 | |
Non-controlling interests | 8,585 | 61,006 | |
Net income (loss) attributable to common shareholders | $ 152,648 | $ 152,843 | |
Weighted average common shares outstanding - basic (in thousands of shares) | 256,922 | 265,690 | |
Weighted average common shares outstanding - diluted (in thousands of shares) | 261,176 | 269,767 | |
Earnings (loss) per common share and common share equivalent - basic (in dollars per share) | $ 0.59 | $ 0.58 | |
Earnings (loss) per common share and common share equivalent - diluted (in dollars per share) | $ 0.58 | $ 0.57 | |
Excluding Life Funds Withheld Assets | |||
Revenues: | |||
Net investment income | $ 188,083 | $ 167,168 | |
Realized investment gains (losses): | |||
Net realized gains (losses) on investments AFS | (31,672) | 11,092 | |
Net realized and change in net unrealized gains (losses) on equity securities | (36,014) | 0 | |
Net realized and change in net unrealized gains (losses) on other investments | 8,649 | 0 | |
Other-than-temporary impairments | (1,645) | (6,874) | |
OTTI transferred to (from) other comprehensive income | (161) | 0 | |
Life Funds Withheld Assets | |||
Revenues: | |||
Net investment income | 30,398 | 33,364 | |
Realized investment gains (losses): | |||
Other-than-temporary impairments | (1,203) | 0 | |
Net realized gains (losses) on investments and change in net unrealized gains (losses) on investments, trading - Life Funds Withheld Assets | (21,309) | 33,068 | |
Net realized and unrealized gains (losses) on derivative instruments | $ 22,921 | $ (50,101) | |
[1] | The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. |
UNAUDITED CONSOLIDATED STATEME5
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income (loss) attributable to common shareholders | $ 152,648 | $ 152,843 |
Change in adjustments related to future policy benefit reserves, net of tax | 4,164 | 5,132 |
Change in net unrealized gains (losses) on affiliate investments, net of tax | 2,148 | (2,462) |
Change in net unrealized gains (losses) on other investments, net of tax | 0 | 1,269 |
Change in OTTI losses recognized in other comprehensive income, net of tax | 3,616 | 1,442 |
Change in underfunded pension liability, net of tax | (189) | (357) |
Change in value of cash flow hedge | (48) | (48) |
Foreign currency translation adjustments, net of tax | (2,432) | 41,938 |
Comprehensive income (loss) | (206,575) | 282,271 |
Excluding Life Funds Withheld Assets | ||
Change in net unrealized gains (losses) on investments AFS, net of tax | (330,728) | 102,622 |
Life Funds Withheld Assets | ||
Change in net unrealized gains (losses) on investments AFS, net of tax | $ (35,754) | $ (20,108) |
UNAUDITED CONSOLIDATED STATEME6
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Excluding Life Funds Withheld Assets | Life Funds Withheld Assets | Common Shares | Additional Paid in Capital | AOCI Attributable to Parent [Member] | AOCI Attributable to Parent [Member]Excluding Life Funds Withheld Assets | AOCI Attributable to Parent [Member]Life Funds Withheld Assets | Retained Earnings (Deficit) | Non-controlling Interest in Equity of Consolidated Subsidiaries | |
Balance, beginning of year at Dec. 31, 2016 | $ 2,669 | $ 8,068,503 | $ 715,546 | $ 2,151,794 | $ 2,022,167 | ||||||
Issuance of common shares | 10 | ||||||||||
Buybacks of common shares | (51) | (154,065) | (46,372) | ||||||||
Exercise of stock options | 9 | ||||||||||
Exercise of stock options | 23,287 | ||||||||||
Share-based compensation | (3,564) | (5,782) | |||||||||
Reclassification due to adoption of new accounting pronouncement | Accounting Standards Update 2016-01 | 0 | 0 | |||||||||
Reclassification due to adoption of new accounting pronouncement | Accounting Standards Update 2018-02 | 0 | 0 | |||||||||
Change in net unrealized gains (losses) on investments AFS, net of tax | $ 102,622 | $ (20,108) | $ 102,622 | $ (20,108) | |||||||
Change in adjustments related to future policy benefit reserves, net of tax | $ 5,132 | 5,132 | |||||||||
Change in net unrealized gains (losses) on affiliate investments, net of tax | (2,462) | (2,462) | |||||||||
Change in net unrealized gains (losses) on other investments, net of tax | 1,269 | 1,269 | |||||||||
Change in OTTI losses recognized in other comprehensive income, net of tax | 1,442 | 1,442 | |||||||||
Change in underfunded pension liability, net of tax | (357) | (357) | |||||||||
Change in value of cash flow hedge | (48) | (48) | |||||||||
Foreign currency translation adjustments, net of tax | 41,938 | 41,938 | |||||||||
Net income (loss) attributable to common shareholders | 152,843 | 152,843 | |||||||||
Dividends on common shares | (59,371) | ||||||||||
Non-controlling interests - contributions | 25 | ||||||||||
Non-controlling interests | 3,036 | ||||||||||
Non-controlling interest share in change in accumulated other comprehensive income (loss) | 514 | ||||||||||
Balance, end of year at Mar. 31, 2017 | 13,000,626 | 2,637 | 7,934,161 | 844,974 | 2,193,112 | 2,025,742 | |||||
Balance, beginning of year at Dec. 31, 2017 | 11,461,320 | 2,560 | 7,757,940 | 889,431 | 1,198,386 | 1,613,003 | |||||
Issuance of common shares | 7 | ||||||||||
Buybacks of common shares | 0 | (1,191) | (471) | ||||||||
Exercise of stock options | 15 | ||||||||||
Exercise of stock options | 48,163 | ||||||||||
Share-based compensation | 4,983 | (7,075) | |||||||||
Reclassification due to adoption of new accounting pronouncement | Accounting Standards Update 2016-01 | (221,856) | [1] | (221,856) | 221,856 | |||||||
Reclassification due to adoption of new accounting pronouncement | Accounting Standards Update 2018-02 | 3,903 | 3,903 | (3,903) | ||||||||
Change in net unrealized gains (losses) on investments AFS, net of tax | $ (330,728) | $ (35,754) | $ (330,728) | $ (35,754) | |||||||
Change in adjustments related to future policy benefit reserves, net of tax | 4,164 | 4,164 | |||||||||
Change in net unrealized gains (losses) on affiliate investments, net of tax | 2,148 | 2,148 | |||||||||
Change in net unrealized gains (losses) on other investments, net of tax | 0 | 0 | |||||||||
Change in OTTI losses recognized in other comprehensive income, net of tax | 3,616 | 3,616 | |||||||||
Change in underfunded pension liability, net of tax | (189) | (189) | |||||||||
Change in value of cash flow hedge | (48) | (48) | |||||||||
Foreign currency translation adjustments, net of tax | (2,432) | (2,432) | |||||||||
Net income (loss) attributable to common shareholders | 152,648 | 152,648 | |||||||||
Dividends on common shares | (57,644) | ||||||||||
Non-controlling interests - contributions | 438 | ||||||||||
Non-controlling interests | (7,361) | ||||||||||
Non-controlling interest share in change in accumulated other comprehensive income (loss) | 613 | ||||||||||
Balance, end of year at Mar. 31, 2018 | $ 11,235,222 | $ 2,582 | $ 7,809,895 | $ 312,255 | $ 1,503,797 | $ 1,606,693 | |||||
[1] | The reclassification out of AOCI due to the adoption of ASU 2016-01 includes $233.8 million of net unrealized gains less $11.9 million of deferred tax on net unrealized gains as discussed in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements." |
UNAUDITED CONSOLIDATED STATEME7
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows provided by (used in) operating activities: | ||
Net income (loss) | $ 161,233 | $ 213,849 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Total realized investment (gains) losses | 83,355 | (37,286) |
Net realized and unrealized (gains) losses on derivative instruments | (4,221) | 7,069 |
Amortization of premiums (discounts) on fixed maturities | 32,298 | 42,178 |
(Income) loss from investment and operating affiliates | (39,800) | (28,921) |
Share-based compensation | 15,448 | 12,694 |
Depreciation and amortization | 22,481 | 19,429 |
Accretion of deposit liabilities | 11,125 | 11,430 |
Changes in: | ||
Unpaid losses and loss expenses | (240,207) | 290,788 |
Future policy benefit reserves | (51,981) | (55,634) |
Funds withheld on GreyCastle life retrocession arrangements, net | (24,578) | (107,596) |
Unearned premiums | 1,310,888 | 1,222,570 |
Premiums receivable | (979,464) | (1,152,760) |
Unpaid losses and loss expenses recoverable | 36,804 | (153,063) |
Ceded unearned premiums | (730,516) | (797,191) |
Reinsurance balances receivable | (272,531) | (59,052) |
Deferred acquisition costs and value of business acquired | (205,798) | (205,830) |
Reinsurance balances payable | 695,220 | 849,492 |
Deferred tax asset - net | 25,190 | 10,852 |
Derivatives | 8,162 | 58,104 |
Other assets | (42,006) | (100,791) |
Other liabilities | (51,327) | (128,606) |
Other | 25,022 | (9,323) |
Total adjustments | (399,357) | (261,346) |
Net cash provided by (used in) operating activities | (238,124) | (47,497) |
Cash flows provided by (used in) investing activities: | ||
Proceeds from sale of fixed maturities and short-term investments | 4,369,199 | 2,492,005 |
Proceeds from redemption of fixed maturities and short-term investments | 701,404 | 1,228,356 |
Proceeds from sale of equity securities | 78,716 | 46,379 |
Purchases of fixed maturities and short term investments | (4,917,191) | (3,633,007) |
Purchases of equity securities | (33,230) | (47,967) |
Proceeds from sale of affiliates | 244,340 | 168,237 |
Purchases of affiliates | (76,014) | (35,926) |
Other, net | (26,782) | 23,429 |
Net cash provided by (used in) investing activities | 340,442 | 241,506 |
Cash flows provided by (used in) financing activities: | ||
Proceeds from issuance of ordinary shares and exercise of stock options | 46,504 | 23,296 |
Buybacks of common shares | (1,663) | (200,488) |
Employee withholding on share-based compensation | (16,696) | (22,871) |
Dividends paid on common shares | 0 | (58,392) |
Distributions to non-controlling interests | (15,946) | (25,400) |
Contributions from non-controlling interests | 439 | 26 |
Contingent consideration paid on business combination | (5,000) | 0 |
Deposit liabilities | (71,124) | (7,771) |
Net cash provided by (used in) financing activities | (63,486) | (291,600) |
Effects of exchange rate changes on foreign currency cash | 7,503 | 30,273 |
Increase (decrease) in cash, cash equivalents and restricted cash | 46,335 | (67,318) |
Cash, cash equivalents and restricted cash - beginning of year | 3,593,451 | 3,580,492 |
Cash, cash equivalents and restricted cash - end of period | 3,639,786 | 3,513,174 |
Life Funds Withheld Assets | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Net realized and unrealized (gains) losses on derivative instruments | $ (22,921) | $ 50,101 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies (a) Basis of Preparation and Consolidation Unless the context otherwise indicates, references herein to the "Company" include the accounts of XL Group Ltd, a Bermuda exempted company ("XL Group"), together with its consolidated subsidiaries. These Unaudited Consolidated Financial Statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In addition, the year-end balance sheet data was derived from audited financial statements but do not include all disclosures required by GAAP. In the opinion of management, these unaudited financial statements reflect all adjustments considered necessary for a fair statement of financial position and results of operations at the end of and for the periods presented. The results of operations for any interim period are not necessarily indicative of the results for a full year. All inter-company accounts and transactions have been eliminated. 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, the disclosure about contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. For further information, see Item 8, Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . In May 2014, the Company ceded the majority of its life reinsurance business to GreyCastle Life Reinsurance ("GCLR") via 100% quota share reinsurance (the "GreyCastle Life Retro Arrangements"). Under the terms of the transaction, the Company continues to own, on a funds withheld basis, assets supporting the GreyCastle Life Retro Arrangements consisting of cash, fixed maturity securities and accrued interest (the "Life Funds Withheld Assets"). The Life Funds Withheld Assets are managed pursuant to agreed investment guidelines that meet the contractual commitments of the XL ceding companies and applicable laws and regulations. All of the investment results associated with the Life Funds Withheld Assets ultimately accrue to GCLR. Because the Company no longer shares in the risks and rewards of the underlying performance of the supporting invested assets, disclosures within the financial statement notes included herein separate the Life Funds Withheld Assets from the rest of the Company's investments. For further information, see Item 8, Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . To facilitate period-to-period comparisons, certain reclassifications have been made to prior period consolidated financial statement amounts to conform to current period presentation. (b) Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted in 2018 ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued an accounting standards update concerning the accounting for financial instruments. The guidance retains the basic existing framework for accounting for financial instruments under GAAP, while achieving limited convergence with IFRS in this area. The guidance: (1) requires equity investments (except consolidated entities and those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income; (2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (3) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for non-public business entities; (4) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet; (5) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (6) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial statements; (7) requires separate presentation of financial assets and financial liabilities by measurement category and form of asset in the financial statements; and (8) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to AFS securities in combination with the entity's other deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption is required to be applied by means of a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, except the amendments related to impairment of equity securities without readily determinable fair values. The Company adopted this guidance as of January 1, 2018. As of that date, accumulated unrealized gains and losses relating to investments in equity securities and certain of our other investments, net of tax, which were included in accumulated other comprehensive income, were reclassified to retained earnings. At January 1, 2018 the amount of the reclassification was a net unrealized gain of $233.8 million , less deferred tax of $11.9 million . Adoption of this update has an effect on results of operations going forward, as mark-to-market movements on equity securities now impact net income; however, it does not have a material impact on the Company's cash flows. ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued an accounting standards update concerning the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in this update are intended to address areas where GAAP is unclear and diversity in practice exists. The following areas are covered in this update: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments; (3) contingent consideration payments following a business combination; (4) proceeds from settlement of insurance claims; (5) proceeds from settlement of corporate-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separation of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance as of January 1, 2018 using the retrospective transition method required by these amendments. As required in adopting this standard, the Company made a formal accounting policy election regarding classification of distributions received from equity method investees, choosing to use the Nature of Distribution approach. This approach is consistent with historical practice utilized by the Company in classifying these distributions. Overall, adoption of the guidance did not have a material impact on the Company's cash flows, and had no impact on the Company's financial position or results of operations. ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued an accounting standards update concerning the tax effects of intra-entity asset transfers within a group. The guidance requires an entity to reflect the income tax consequences of an intra-entity transfer of an asset other than inventory when that transfer occurs. This is a departure from previous GAAP, which prohibited recognition of tax on such transfers until the asset had been sold to an external party or otherwise realized. The amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. The amendments are required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance as of January 1, 2018. This guidance did not have a material impact on the Company's financial condition, results of operations, or cash flows. ASU 2016-18, Statement of Cash Flows: Restricted Cash In November 2016, the FASB issued an accounting standards update concerning the presentation of restricted cash within the statement of cash flows. Previous GAAP did not provide guidance on the presentation or classification of movements in restricted cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included as a component of cash and cash equivalents when reconciling beginning-of-period and end-of-period totals within the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The guidance is required to be applied retrospectively to all periods presented in the statements of cash flows. The Company adopted this guidance as of January 1, 2018. As result, the net amount of the change in the restricted cash balances during each reporting period is no longer being presented as a discrete line item "Change in restricted cash" within investing cash flows for each applicable period, as was previously reported in the Company's Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2017 . This guidance did not have an impact on the Company's financial position or results of operations. ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued an accounting standards update concerning the presentation of costs related to defined benefit pension plans and similar plans. The amendments in this ASU principally require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by relevant employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in the update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments relating to presentation in the income statement are required to be applied retrospectively. Disclosures of the nature of and reason for the change in accounting principle are required in the first interim and annual periods of adoption. The Company adopted this guidance as of January 1, 2018. The impact of this guidance on the Company is disclosure-related only, and it does not have an impact on the Company's financial position, results of operations or cash flows. As the impact of adopting this standard is not material, updated disclosure on the Company's defined benefit pension plans has not been provided for the current quarterly period. For the Company’s most recent disclosures, see Item 8, Note 17, "Retirement Plans " to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued an accounting standards update concerning the stranded tax effects resulting from tax rate changes legislated by the U.S. Tax Cuts and Jobs Act. Under GAAP, the effects of all changes in tax rates on deferred tax balances are reflected in income, even if the tax balances relate to items of accumulated other comprehensive income. This update permits companies to make an election to reclassify from accumulated other comprehensive income to retained earnings such stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. Certain disclosures are also required by the update. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those financial years. For public business entities, early adoption is permitted, including adoption in any interim period for reporting periods for which financial statements have not yet been issued. The amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. Tax Cuts and Jobs Act is recognized. The Company early-adopted this guidance by making the permitted election in the first quarter of 2018, recognizing a reclassification of $3.9 million from accumulated other comprehensive income to retained earnings in the period of adoption. I n general, in accounting for the release of income tax effects from accumulated other comprehensive income, the Company applies the individual item approach with respect to available-for-sale debt securities, and the portfolio approach with respect to pension, postretirement benefit plan obligations and currency translation matters. ASU 2018-05, Income Taxes: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In March 2018, the FASB issued an accounting standards update concerning the income tax accounting implications of the U.S. Tax Cuts and Jobs Act. The update codifies SEC-related material within the Accounting Standards Codification pursuant to the issuance of SEC Staff Accounting Bulletin No. 118 (‘SAB 118’). SAB 118 provided clarifying guidance for how a public business entity should address the situation in which the accounting for certain income tax effects of the U.S. Tax Cuts and Jobs Act was not completed by the time financial statements were issued for the reporting period in which the legislation was enacted. In such circumstances, the incomplete effects are reported when a reasonable estimate can be determined, based on that estimate. Provisional amounts can be updated during a measurement period not exceeding one year. Disclosures concerning any incomplete effects and adjustments are required. The Company complied with the requirements of SAB 118 in its Form 10-K for the year ended December 31, 2017 and no further changes were required to comply with this update when adopted in the three months ended March 31, 2018. During the three months ended March 31, 2018, there were no changes to any outstanding items as reported in Item 8, Note 23, "Taxation" to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. |
Acquisition and Disposals
Acquisition and Disposals | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and disposals | Acquisitions and Disposals (a) Merger with AXA SA ("AXA") The Company has entered into a definitive agreement and plan of merger (the “Merger Agreement”) with AXA dated March 5, 2018, under which AXA would acquire 100% of the Company’s common shares in exchange for cash proceeds of $57.60 per common share of XL Group or approximately $15.3 billion in the aggregate (the “AXA Transaction”). The Merger Agreement provides that, subject to the satisfaction or waiver of certain conditions set forth therein, the Company will merge with an existing AXA subsidiary in accordance with the Companies Act 1981 of Bermuda (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of AXA. All preferred shares issued by subsidiaries of the Company will remain issued and outstanding upon completion of the Merger. The Merger is expected to close during the second half of 2018, subject to approval by the Company’s shareholders and other customary closing conditions, including the receipt of required regulatory approvals. The Merger Agreement, among other stipulations, permits: (i) the Company to pay out regular quarterly cash dividends not to exceed $0.22 per common share per quarter, (ii) subsidiaries of the Company to pay periodic cash dividends on preferred shares not to exceed amounts contemplated by the applicable bye-laws or resolutions approving such preferred shares, and (iii) subsidiaries of the Company to pay dividends to XL Group and XLIT Ltd. ("XLIT"), the Company’s holding companies, or any of its subsidiaries. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company is organized into two operating segments: Insurance and Reinsurance. The Company's general investment and financing operations are reflected in Corporate and Other. Subsequent to the transaction described in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," GCLR reinsures the majority of the Company's life reinsurance business through the GreyCastle Life Retro Arrangements. The results of the run-off life operations not subject to the GreyCastle Life Retro Arrangements are also reported within Corporate and Other. The Company evaluates the performance of both the Insurance and Reinsurance segments based on underwriting profit. Other items of revenues and expenditures of the Company are not evaluated at the segment level. In addition, the Company does not allocate investment assets used to support its Property and Casualty ("P&C") operations to the individual segments, except as noted below. Investment assets related to the Company's run-off life operations are held in a separately identified portfolio. Net investment income from these assets is included in the contribution from Corporate and Other. Certain structured products included in the Insurance and Reinsurance segments are also held in separately identified portfolios. As such, net investment income from these assets is included in the contribution from the applicable segment. The following tables summarize the segment results for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 (U.S. dollars in thousands) Insurance Reinsurance Total P&C Corporate and Other (1) Total Gross premiums written $ 2,866,539 $ 2,060,601 $ 4,927,140 $ 52,595 $ 4,979,735 Net premiums written 1,481,867 1,670,744 3,152,611 3,107 3,155,718 Net premiums earned 1,665,789 931,392 2,597,181 3,107 2,600,288 Less: Net losses and loss expenses (2) 1,064,992 557,014 1,622,006 10,307 1,632,313 Less: Acquisition costs 221,962 240,854 462,816 1,011 463,827 Less: Operating expenses (3) 316,380 73,539 389,919 141 390,060 Underwriting profit (loss) $ 62,455 $ 59,985 $ 122,440 $ (8,352 ) $ 114,088 Net investment income - excluding Life Funds Withheld Assets (4) 168,253 7,519 175,772 Net investment income - Life Funds Withheld Assets 30,398 30,398 Net results from structured products (5) 2,103 1,308 3,411 — 3,411 Net fee income and other (6) (6,703 ) 892 (5,811 ) 69 (5,742 ) Net realized investment gains (losses) - excluding Life Funds Withheld Assets (60,957 ) 114 (60,843 ) Net realized investment gains (losses) - Life Funds Withheld Assets — (22,512 ) (22,512 ) Net realized and unrealized gains (losses) on derivative instruments — 4,221 4,221 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — 22,921 22,921 Net income (loss) from investment affiliates and operating affiliates — 55,951 55,951 Less: Foreign exchange (gains) losses — 9,841 9,841 Less: Corporate operating expenses — 70,043 70,043 Contribution from P&C and Corporate and Other 227,336 10,445 237,781 Less: Interest expense (7) 44,646 44,646 Less: Income tax expense 31,902 31,902 Less: Non-controlling interests 8,585 8,585 Net income (loss) attributable to common shareholders $ 152,648 Ratios – P&C operations: (8) Loss and loss expense ratio 63.9 % 59.8 % 62.5 % Underwriting expense ratio 32.4 % 33.8 % 32.8 % Combined ratio 96.3 % 93.6 % 95.3 % ____________ (1) Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. (2) The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. (3) Operating expenses of the segments exclude Corporate operating expenses, shown separately. (4) Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products. (5) The net results from P&C structured products include net investment income and interest expense of $12.3 million and $8.9 million , respectively. (6) Net fee income and other includes operating expenses of $12.5 million from the Company's loss prevention consulting services business. (7) Interest expense excludes interest expense related to structured products recorded in the Insurance and Reinsurance segments. (8) Ratios are based on net premiums earned from P&C operations. Three Months Ended March 31, 2017 (U.S. dollars in thousands) Insurance Reinsurance Total P&C Corporate Total Gross premiums written $ 2,694,216 $ 1,927,390 $ 4,621,606 $ 56,811 $ 4,678,417 Net premiums written 1,508,591 1,471,169 2,979,760 3,310 2,983,070 Net premiums earned 1,635,315 884,166 2,519,481 3,310 2,522,791 Less: Net losses and loss expenses (2) 1,060,363 523,093 1,583,456 7,291 1,590,747 Less: Acquisition costs (2) 210,483 224,079 434,562 1,307 435,869 Less: Operating expenses (3) 285,729 71,757 357,486 233 357,719 Underwriting profit (loss) $ 78,740 $ 65,237 $ 143,977 $ (5,521 ) $ 138,456 Net investment income - excluding Life Funds Withheld Assets (4) 146,566 7,227 153,793 Net investment income - Life Funds Withheld Assets 33,364 33,364 Net results from structured products (5) 2,269 645 2,914 — 2,914 Net fee income and other (6) 1,967 686 2,653 (438 ) 2,215 Net realized investment gains (losses) - excluding Life Funds Withheld Assets 4,831 (613 ) 4,218 Net realized investment gains (losses) - Life Funds Withheld Assets — 33,068 33,068 Net realized and unrealized gains (losses) on derivative instruments — (7,069 ) (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — (50,101 ) (50,101 ) Net income (loss) from investment affiliates and operating affiliates — 51,870 51,870 Less: Foreign exchange (gains) losses — (3,336 ) (3,336 ) Less: Corporate operating expenses — 98,873 98,873 Contribution from P&C and Corporate and Other 300,941 (33,750 ) 267,191 Less: Interest expense (7) 40,250 40,250 Less: Income tax expense 13,092 13,092 Less: Non-controlling interests 61,006 61,006 Net income (loss) attributable to common shareholders $ 152,843 Ratios – P&C operations: (8) Loss and loss expense ratio 64.8 % 59.2 % 62.8 % Underwriting expense ratio 30.4 % 33.4 % 31.5 % Combined ratio 95.2 % 92.6 % 94.3 % ____________ (1) Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. (2) The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments. (3) Operating expenses of the segments exclude Corporate operating expenses, shown separately. (4) Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products. (5) The net results from P&C structured products include net investment income and interest expense of $13.4 million and $10.5 million , respectively. (6) Net fee income and other includes operating expenses of $11.4 million from the Company's loss prevention consulting services business. (7) Interest expense excludes interest expense related to structured products recorded in the Insurance and Reinsurance segments. (8) Ratios are based on net premiums earned from P&C operations. The following tables summarize the Company's net premiums earned by product type for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 (U.S. dollars in thousands) Insurance Reinsurance Corporate Total P&C Operations: Professional $ 320,717 $ 64,608 $ — $ 385,325 Casualty 481,010 149,963 — 630,973 Property catastrophe — 136,503 — 136,503 Property 406,778 258,089 — 664,867 Specialty 457,650 44,261 — 501,911 Other (1) (366 ) 277,968 — 277,602 Total P&C Operations $ 1,665,789 $ 931,392 $ — $ 2,597,181 Corporate and Other: Run-off Life operations - Other Life — — 3,107 3,107 Total Corporate and Other $ — $ — $ 3,107 $ 3,107 Total $ 1,665,789 $ 931,392 $ 3,107 $ 2,600,288 Three Months Ended March 31, 2017 (U.S. dollars in thousands) Insurance (2) Reinsurance Corporate Total P&C Operations: Professional $ 305,482 $ 52,926 $ — $ 358,408 Casualty 474,195 156,634 — 630,829 Property catastrophe — 148,406 — 148,406 Property 450,503 272,346 — 722,849 Specialty 402,687 36,626 — 439,313 Other (1) 2,448 217,228 — 219,676 Total P&C Operations $ 1,635,315 $ 884,166 $ — $ 2,519,481 Corporate and Other: Run-off Life operations - Other Life — — 3,310 3,310 Total Corporate and Other $ — $ — $ 3,310 $ 3,310 Total $ 1,635,315 $ 884,166 $ 3,310 $ 2,522,791 ____________ (1) Other within the Insurance segment includes: surety and certain discontinued lines. Other within the Reinsurance segment includes multiline, whole account contracts, credit and surety, accident and health and other lines. (2) Amounts from the prior year have been re-presented to reflect current mapping of underlying lines of business to be consistent with the manner in which they are reflected in the current period. The most significant movements include movements out of Other are in the Insurance segment, and include: livestock business into Specialty; and credit surety into Casualty. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments (a) Fixed Maturities, Short-Term Investments and Equity Securities Amortized Cost and Fair Value Summary The cost (amortized cost for fixed maturities and short-term investments), fair value, gross unrealized gains and gross unrealized (losses), including non-credit related OTTI recorded in accumulated other comprehensive income ("AOCI"), of the Company's investments AFS at March 31, 2018 and December 31, 2017 were as follows: Included in AOCI March 31, 2018 (U.S. dollars in thousands) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit Related OTTI (1) Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government and Government Agencies ("U.S. Government") $ 4,207,380 $ 29,290 $ (48,711 ) $ 4,187,959 $ — U.S. States, municipalities and political subdivisions 1,953,202 63,586 (3,626 ) 2,013,162 — Non-U.S. Governments 5,260,650 98,496 (52,495 ) 5,306,651 — Corporate 9,759,732 131,175 (148,237 ) 9,742,670 — Residential mortgage-backed securities ("RMBS") 4,606,275 26,883 (103,435 ) 4,529,723 (8,434 ) Commercial mortgage-backed securities ("CMBS") 1,292,559 2,263 (35,303 ) 1,259,519 (736 ) Other asset-backed securities 1,588,637 26,172 (6,413 ) 1,608,396 (30,764 ) Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,668,435 $ 377,865 $ (398,220 ) $ 28,648,080 $ (39,934 ) Total short-term investments - Excluding Life Funds Withheld Assets 500,844 773 (1,447 ) 500,170 — Total investments - AFS - Excluding Life Funds Withheld Assets $ 29,169,279 $ 378,638 $ (399,667 ) $ 29,148,250 $ (39,934 ) Fixed maturities - AFS - Life Funds Withheld Assets U.S. Government $ 9,420 $ 2,196 $ — $ 11,616 $ — Non-U.S. Governments 432,390 152,016 — 584,406 — Corporate 919,151 202,052 — 1,121,203 — RMBS 455 48 — 503 — CMBS 105,505 24,565 — 130,070 — Other asset-backed securities 132,990 27,760 — 160,750 — Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,599,911 $ 408,637 $ — $ 2,008,548 $ — Total investments - AFS $ 30,769,190 $ 787,275 $ (399,667 ) $ 31,156,798 $ (39,934 ) ____________ (1) Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. Included in AOCI December 31, 2017 (U.S. dollars in thousands) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit Related OTTI (1) Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ 4,358,503 $ 37,782 $ (33,545 ) $ 4,362,740 $ — U.S. States, municipalities and political subdivisions 1,977,796 87,832 (988 ) 2,064,640 — Non-U.S. Governments 5,135,526 114,918 (48,863 ) 5,201,581 — Corporate 9,644,799 207,668 (57,334 ) 9,795,133 (18 ) RMBS 4,717,542 41,983 (35,123 ) 4,724,402 (8,795 ) CMBS 1,246,406 7,468 (9,857 ) 1,244,017 (817 ) Other asset-backed securities 1,488,958 26,877 (6,472 ) 1,509,363 (34,016 ) Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,569,530 $ 524,528 $ (192,182 ) $ 28,901,876 $ (43,646 ) Total short-term investments - Excluding Life Funds Withheld Assets 816,638 744 (1,901 ) 815,481 — Total equity securities - Excluding Life Funds Withheld Assets 638,455 80,679 (5,167 ) 713,967 — Total investments - AFS - Excluding Life Funds Withheld Assets $ 30,024,623 $ 605,951 $ (199,250 ) $ 30,431,324 $ (43,646 ) Fixed maturities - AFS - Life Funds Withheld Assets U.S. Government $ 9,050 $ 2,266 $ — $ 11,316 $ — Non-U.S. Governments 433,664 150,870 — 584,534 — Corporate 909,589 227,624 — 1,137,213 — RMBS 448 67 — 515 — CMBS 97,356 24,916 — 122,272 — Other asset-backed securities 137,944 33,318 — 171,262 — Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,588,051 $ 439,061 $ — $ 2,027,112 $ — Total investments - AFS $ 31,612,674 $ 1,045,012 $ (199,250 ) $ 32,458,436 $ (43,646 ) ____________ (1) Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. The amortized cost and fair value of trading investments at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 (U.S. dollars in thousands) Amortized Fair Value Fixed maturities trading - Life Funds Withheld Assets U.S. Government $ 9,729 $ 9,320 Non-U.S. Governments 485,495 497,108 Corporate 1,507,879 1,525,761 RMBS 1,023 893 CMBS 7,358 7,472 Other asset-backed securities 44,238 43,697 Total fixed maturities trading - Life Funds Withheld Assets $ 2,055,722 $ 2,084,251 Total short-term investments trading - Life Funds Withheld Assets $ 7,428 $ 7,425 Total investments trading - Life Funds Withheld Assets $ 2,063,150 $ 2,091,676 December 31, 2017 (U.S. dollars in thousands) Amortized Fair Value Fixed maturities trading - Life Funds Withheld Assets U.S. Government $ 11,640 $ 11,042 U.S. States, municipalities and political subdivisions 30 31 Non-U.S. Governments 473,849 485,171 Corporate 1,412,846 1,460,292 RMBS 1,020 932 CMBS 7,345 7,580 Other asset-backed securities 39,771 41,337 Total fixed maturities trading - Life Funds Withheld Assets $ 1,946,501 $ 2,006,385 Total short-term investments trading - Life Funds Withheld Assets $ 14,969 $ 14,965 Total investments trading - Life Funds Withheld Assets $ 1,961,470 $ 2,021,350 At March 31, 2018 and December 31, 2017 , approximately 3.5% and 3.3% , respectively, of the Company's fixed income investment portfolio at fair value, excluding cash and Life Funds Withheld Assets, was invested in securities that were below investment grade or not rated. Approximately 3.5% and 4.2% of the gross unrealized losses in the Company's fixed income investment portfolio, excluding cash and Life Funds Withheld Assets, at March 31, 2018 and December 31, 2017 , respectively, related to securities that were below investment grade or not rated. Contractual Maturities Summary The contractual maturities of AFS fixed maturity securities at March 31, 2018 and December 31, 2017 are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Fixed maturities - AFS - Excluding Life Funds Withheld Assets Due less than one year $ 1,716,039 $ 1,717,129 $ 1,556,688 $ 1,564,360 Due after 1 through 5 years 12,520,942 12,501,887 12,243,590 12,309,732 Due after 5 through 10 years 5,882,207 5,876,041 6,268,217 6,362,314 Due after 10 years 1,061,776 1,155,385 1,048,129 1,187,688 $ 21,180,964 $ 21,250,442 $ 21,116,624 $ 21,424,094 RMBS 4,606,275 4,529,723 4,717,542 4,724,402 CMBS 1,292,559 1,259,519 1,246,406 1,244,017 Other asset-backed securities 1,588,637 1,608,396 1,488,958 1,509,363 Total mortgage and asset-backed securities $ 7,487,471 $ 7,397,638 $ 7,452,906 $ 7,477,782 Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,668,435 $ 28,648,080 $ 28,569,530 $ 28,901,876 Fixed maturities - AFS - Life Funds Withheld Assets Due less than one year $ 66,237 $ 68,315 $ 47,143 $ 49,233 Due after 1 through 5 years 274,247 296,715 286,524 313,227 Due after 5 through 10 years 167,949 201,133 168,897 205,536 Due after 10 years 852,528 1,151,062 849,739 1,165,067 $ 1,360,961 $ 1,717,225 $ 1,352,303 $ 1,733,063 RMBS 455 503 448 515 CMBS 105,505 130,070 97,356 122,272 Other asset-backed securities 132,990 160,750 137,944 171,262 Total mortgage and asset-backed securities $ 238,950 $ 291,323 $ 235,748 $ 294,049 Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,599,911 $ 2,008,548 $ 1,588,051 $ 2,027,112 Total fixed maturities - AFS $ 30,268,346 $ 30,656,628 $ 30,157,581 $ 30,928,988 March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Fixed maturities trading - Life Funds Withheld Assets Due less than one year $ 66,532 $ 65,428 $ 59,962 $ 59,605 Due after 1 through 5 years 493,369 495,899 486,847 492,998 Due after 5 through 10 years 691,074 690,354 645,573 657,093 Due after 10 years 752,128 780,508 705,983 746,840 $ 2,003,103 $ 2,032,189 $ 1,898,365 $ 1,956,536 RMBS 1,023 893 1,020 932 CMBS 7,358 7,472 7,345 7,580 Other asset-backed securities 44,238 43,697 39,771 41,337 Total mortgage and asset-backed securities $ 52,619 $ 52,062 $ 48,136 $ 49,849 Total fixed maturities trading - Life Funds Withheld Assets $ 2,055,722 $ 2,084,251 $ 1,946,501 $ 2,006,385 Pledged Assets Certain of the Company's invested assets are pledged in support of insurance and reinsurance liabilities as well as to collateralize our credit facilities. Such pledges are largely required by the Company's operating subsidiaries that are "non-admitted" under U.S. state insurance regulations, in order for the U.S. cedant to receive statutory credit for reinsurance. Also included in pledged assets are Life Funds Withheld Assets, as noted in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ." Additionally, certain deposit liabilities and annuity contracts require the use of pledged assets. At March 31, 2018 and December 31, 2017 , the Company had $17.9 billion and $18.8 billion in pledged assets, respectively. (b) Gross Unrealized Losses The following is an analysis of how long the AFS securities at March 31, 2018 and December 31, 2017 had been in a continual unrealized loss position: Less than 12 months Equal to or greater than 12 months March 31, 2018 (U.S. dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities and short-term investments - AFS U.S. Government $ 3,080,855 $ (38,758 ) $ 515,999 $ (11,350 ) U.S. States, municipalities and political subdivisions 278,946 (3,222 ) 15,869 (404 ) Non-U.S. Governments 2,061,869 (25,703 ) 487,103 (26,836 ) Corporate 5,509,770 (114,092 ) 510,757 (34,148 ) RMBS 2,973,309 (68,157 ) 846,423 (35,278 ) CMBS 991,765 (26,681 ) 131,116 (8,622 ) Other asset-backed securities 396,287 (2,502 ) 132,119 (3,914 ) Total fixed maturities and short-term investments - AFS $ 15,292,801 $ (279,115 ) $ 2,639,386 $ (120,552 ) Less than 12 months Equal to or greater than 12 months December 31, 2017 (U.S. dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities and short-term investments - AFS U.S. Government $ 2,687,083 $ (21,514 ) $ 727,246 $ (13,902 ) U.S. States, municipalities and political subdivisions 88,235 (622 ) 19,583 (366 ) Non-U.S. Governments 1,527,323 (14,959 ) 560,648 (33,931 ) Corporate 2,959,416 (25,757 ) 543,973 (31,577 ) RMBS 2,198,391 (14,030 ) 925,191 (21,093 ) CMBS 583,656 (4,117 ) 138,065 (5,740 ) Other asset-backed securities 256,823 (1,111 ) 175,146 (5,364 ) Total fixed maturities and short-term investments - AFS $ 10,300,927 $ (82,110 ) $ 3,089,852 $ (111,973 ) The Company had gross unrealized losses totaling $399.7 million on 4,061 securities out of a total of 7,851 held at March 31, 2018 in its AFS - Excluding Life Funds Withheld Assets portfolio, which either it considers to be temporarily impaired or reflects non-credit losses on other-than-temporarily impaired assets. Individual security positions comprising this balance have been evaluated by management, in conjunction with our investment managers, to determine the severity of these impairments and whether they should be considered other-than-temporary. Management believes it is more likely than not that the issuer will be able to fund sufficient principal and interest payments to support the current amortized cost. (c) Net Realized and Unrealized Gains (Losses) The following represents an analysis of net realized and unrealized gains (losses) on investments: Net Realized Investment Gains (Losses) Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Net realized gains (losses) on investments AFS - excluding Life Funds Withheld Assets: (1) Gross realized gains $ 19,330 $ 39,397 Gross realized losses (51,002 ) (28,305 ) OTTI, net of amounts transferred to other comprehensive income (1,806 ) (6,874 ) Total $ (33,478 ) $ 4,218 Net realized and change in net unrealized gains (losses) on equities securities - excluding Life Funds Withheld Assets: Gross realized gains $ 9,693 $ — Gross realized losses (126 ) — Change in net unrealized gains (losses) on equity securities (45,581 ) — Total $ (36,014 ) $ — Net realized and change in net unrealized gains (losses) on other investments - excluding Life Funds Withheld Assets: Gross realized gains $ 3,004 $ — Gross realized losses (1,163 ) — Change in net unrealized gains (losses) on other investments 6,808 — Total $ 8,649 $ — Net realized gains (losses) on investments and change in net unrealized gains (losses) on investments on trading securities - Life Funds Withheld Assets: Gross realized gains $ 12,909 $ 35,151 Gross realized losses (2,551 ) (677 ) OTTI, net of amounts transferred to other comprehensive income (1,203 ) — Change in net unrealized gains (losses) on trading securities $ (31,667 ) $ (1,406 ) Total $ (22,512 ) $ 33,068 Total realized investment gains (losses) $ (83,355 ) $ 37,286 ____________ (1) AFS in the prior year includes net realized gains (losses) on equity securities and other investments. Due to the implementation of ASU 2016-01, as described in in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements ," the net realized gains (losses) on these investments are shown separately. The components of OTTI charges for the three months ended March 31, 2018 and 2017 , as defined in Note 1(g), "Significant Accounting Policies - Other-Than-Temporary Impairments of Available for Sale ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 , for investments excluding Life Funds Withheld Assets were: Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Fixed maturities: Credit loss impairments $ 765 $ 226 Equities and other investments: Impaired more than 11 months or more than 50% — 4,975 Currency Losses 1,041 1,673 OTTI, net of amounts transferred to other comprehensive income $ 1,806 $ 6,874 The following table sets forth the amount of credit loss impairments on fixed income securities, for which a portion of the OTTI loss was recognized in Other Comprehensive Income ("OCI"), held by the Company at the dates or for the periods indicated and the corresponding changes in such amounts: Credit Loss Impairments Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Opening balance at beginning of indicated period $ 43,332 $ 61,595 Credit loss impairment recognized in the current period on securities not previously impaired 590 124 Credit loss impairments previously recognized on securities that matured or were paid down, prepaid or sold during the period (1,156 ) (836 ) Additional credit loss impairments recognized in the current period on securities previously impaired 175 102 Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected (1,475 ) (2,357 ) Closing balance at end of indicated period $ 41,466 $ 58,628 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company enters into derivative instruments for both risk management and investment purposes. The Company is exposed to potential loss from various market risks, and manages its market risks based on a comprehensive framework of investment decision authorities ("Authorities Framework") adopted by the Risk and Finance Committee of XL Group's Board of Directors ("RFC"). The Authorities Framework is intended to align the risk profile of our investment portfolio to be consistent with the Company's risk tolerance and other guidelines established by the RFC. The following table summarizes information on the notional amounts and gross amounts of derivative fair values contained in the Unaudited Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Asset Derivative Notional Amount Asset Derivative Fair Value Liability Derivative Notional Amount Liability Derivative Fair Value Asset Derivative Notional Amount Asset Derivative Fair Value Liability Derivative Notional Amount Liability Derivative Fair Value Derivatives designated as hedging instruments: Foreign currency exposure $ 585,573 $ 15,155 $ 534,856 $ 15,025 $ 580,194 $ 5,655 $ 339,221 $ 3,968 Total derivatives designated as hedging instruments $ 585,573 $ 15,155 $ 534,856 $ 15,025 $ 580,194 $ 5,655 $ 339,221 $ 3,968 Derivatives not designated as hedging instruments: Investment Related Derivatives: Interest rate exposure $ — $ — $ 238,215 $ 726 $ 181,975 $ 423 $ — $ — Foreign currency exposure 33,070 313 336,055 3,674 263,722 6,931 141,300 2,256 Credit exposure 5,000 128 45,000 6,262 5,000 187 45,000 6,784 Financial market exposure — — 40,823 3,873 30,001 1,271 6,998 42 Other Non-Investment Derivatives: Credit exposure 20,242 334 — — — — 25,526 169 Guaranteed minimum income benefit contract 35,288 17,841 35,288 17,841 36,171 18,136 36,171 18,136 Modified coinsurance and funds withheld contracts, including life retrocession embedded derivative (1) 917,921 2,132 4,230,047 — 51,653 — 5,014,284 31,541 Other — — — — 16,000 191 — — Total derivatives not designated as hedging instruments $ 1,011,521 $ 20,748 $ 4,925,428 $ 32,376 $ 584,522 $ 27,139 $ 5,269,279 $ 58,928 Total derivatives $ 35,903 $ 47,401 $ 32,794 $ 62,896 Counterparty netting (7,239 ) (7,239 ) (3,579 ) (3,579 ) Total derivatives net of counterparty netting 28,664 40,162 29,215 59,317 Cash collateral held/paid (2) (6,060 ) (17,338 ) (3,920 ) (1,312 ) Total derivatives as recorded in the Unaudited Consolidated Balance Sheets $ 22,604 $ 22,824 $ 25,295 $ 58,005 ____________ (1) The fair value movements in derivative assets and liabilities relating to modified coinsurance and funds withheld contracts are included within the associated asset or liability at each period end on the face of the Unaudited Consolidated Balance Sheets. Notional amounts associated with reinsurance agreements under which the Company assumes reinsurance risk are recorded as asset derivative notional amounts. Notional amounts associated with the GreyCastle Life Retro Arrangements and other outward reinsurance contracts under which the Company cedes risk are recorded as liability derivative notional amounts. Included in the liability derivative notional amount at March 31, 2018 is the cumulative net realized and unrealized loss on the life retrocession embedded derivative of $1.1 billion . (2) At March 31, 2018 , the Company held cash collateral related to foreign currency derivative positions and certain other derivative positions of $6.1 million for derivatives in an asset position and paid cash collateral of $17.3 million for derivatives in a liability position. At December 31, 2017 , the Company held cash collateral related to a foreign currency derivative position and certain other derivative positions of $3.9 million for derivatives in an asset position and paid cash collateral of $1.3 million for derivatives in a liability position. The assets and liabilities related to the net collateral paid or held were recorded as Other assets and Other liabilities within the Unaudited Consolidated Balance Sheets as the collateral and derivative positions are not intended to be settled on a net basis. Derivative instruments in an asset or liability position are included within "Other assets" or "Other liabilities," respectively, at fair value in the Unaudited Consolidated Balance Sheets on a net basis where the Company has both a legal right of offset and the intention to settle the contracts on a net basis. Certain embedded derivatives within reinsurance contracts are included in "Reinsurance balances payable." The Company often enters into different types of derivative contracts with a single counterparty and these contracts are covered under netting agreements. Changes in the fair values of derivatives are shown in the Unaudited Consolidated Statements of Income as "Net realized and unrealized gains (losses) on derivative instruments," unless the derivatives are designated as hedging instruments. The accounting for derivatives that are designated as hedging instruments is described in Item 8, Note 1(h), "Significant Accounting Policies - Derivative Instruments ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (a) Derivative Instruments Designated as Hedges of a Net Investment in a Foreign Operation The Company utilizes foreign currency contracts to hedge the fair value of certain net investments in foreign operations. During the three months ended March 31, 2018 and 2017 , the Company entered into foreign currency contracts that were formally designated as hedges of investments in foreign subsidiaries, the majority of which have functional currencies of either the British pound or Canadian dollars. There was no ineffectiveness in these transactions. The following table provides the weighted average U.S. dollar equivalent of foreign denominated net assets that were hedged and the resulting derivative gain (loss) that was recorded in the foreign currency translation adjustment, net of tax, account within AOCI for the three months ended March 31, 2018 and 2017 : Derivative Instruments Designated as Hedges of a Net Investment in a Foreign Operation - Summary Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Weighted average of U.S. dollar equivalent of foreign denominated net assets $ 1,094,210 $ 1,677,145 Derivative gains (losses) (1) $ (2,323 ) $ 29,398 ____________ (1) Derivative gains (losses) from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in the cumulative translation adjustment account within AOCI for each period. As described in Note 9, "Notes Payable and Debt and Financing Arrangements ," the Company has issued debt denominated in Euros that is designated and qualifies as a non-derivative hedging instrument against an equal amount of the Company's currency exposure to the Euro resulting from net investments in foreign operations. Accordingly, the foreign currency revaluation of this debt is recorded in AOCI, offsetting the foreign currency translation adjustment of the related net investments that is also recorded in AOCI. (b) Derivative Instruments Not Formally Designated As Hedging Instruments The following table provides the total impact on earnings relating to derivative instruments not formally designated as hedging instruments. The impacts are all recorded through "Net realized and unrealized gains (losses) on derivative instruments" in the Unaudited Consolidated Statements of Income for the three months ended March 31, 2018 and 2017 : Net Realized and Unrealized Gains (Losses) on Derivative Instruments Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Investment Related Derivatives: Interest rate exposure $ 997 $ (214 ) Foreign currency exposure (3,318 ) (745 ) Credit exposure (41 ) (854 ) Financial market exposure (1,348 ) 185 Other Non-Investment Derivatives: Foreign currency exposure — (1,210 ) Credit exposure 615 632 Modified coinsurance and funds withheld contracts, including life retrocession embedded derivative 2,492 (3,925 ) Other 4,824 (938 ) Net realized and unrealized gains (losses) on derivative instruments $ 4,221 $ (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets $ 22,921 $ (50,101 ) The Company's objectives in using these derivatives are explained below. Investment Related Derivatives The Company, either directly or through third-party investment managers, may use derivative instruments within its investment portfolio, including interest rate swaps and options on interest rate swaps, total return swaps, credit derivatives (including single name and index credit default swaps and options on credit default swaps), equity options, forward contracts and futures (including foreign exchange, bond and stock index, interest rate and commodity futures), primarily as a means of reducing investment risk by economically hedging exposures to interest rate, credit spread, equity price changes and foreign currency risk or, in limited instances, for efficient portfolio management. When using exchange-traded or cleared over-the-counter derivatives, the Company is exposed to the credit risk of the applicable clearing house and of the Company's futures commission merchant. When using uncleared over-the-counter derivatives, the Company is exposed to credit risk in the event of non-performance by the counterparties to such derivative contracts. To manage this risk, the Company requires appropriate legal documentation with counterparties that has been reviewed and negotiated by legal counsel on behalf of the Company and complies with the Company's documentation standards, investment guidelines and policies. Investment Related Derivatives – Interest Rate Exposure The Company utilizes risk management and overlay strategies that incorporate the use of derivative financial instruments, primarily to manage its fixed income portfolio duration and net economic exposure to interest rate risks. The Company may also use interest rate swaps to convert certain liabilities from a fixed rate to a variable rate of interest or use them to convert a variable rate of interest from one basis to another. Investment Related Derivatives – Foreign Currency Exposure The Company has exposure to foreign currency exchange rate fluctuations through its operations and in its investment portfolio. The Company uses foreign currency contracts to manage its exposure to the effects of fluctuating foreign currencies on the value of certain of its foreign currency fixed maturities and equities. These contracts are not designated as specific hedges for financial reporting purposes and, therefore, realized and unrealized gains and losses on these contracts are recorded in income in the period in which they occur. These contracts generally have maturities of twelve months or less. In addition, certain of the Company's investment managers may, subject to investment guidelines, enter into forward contracts. Investment Related Derivatives – Credit Exposure Credit derivatives may be purchased within the Company's investment portfolio in the form of single name and basket credit default swaps and swaptions, which are used to mitigate credit exposure through a reduction in credit spread duration (i.e., macro credit strategies rather than single-name credit hedging) or exposure to securities of selected issuers. Credit derivatives may also be used to efficiently gain exposure to credit markets, subject to guidelines that prohibit the introduction of effective leverage. Investment Related Derivatives – Financial Market Exposure Stock index futures may be purchased within the Company's investment portfolio to create synthetic equity exposure and to add value to the portfolio with overlay strategies where market inefficiencies are believed to exist. Stock index futures may be sold to facilitate the timely and efficient reduction of equity exposure. Equity option strategies, including both purchases and sales of options, may be used to add value or reduce exposure with overlay or other strategies. From time to time, the Company may enter into other financial market exposure derivative contracts on various indices and other underlying financial instruments including, but not limited to, equity options, total return swaps, and commodity contracts. Other Non-Investment Derivatives Credit Exposure During the year ended December 31, 2017, the Company entered into a non-investment related credit derivative relating to a number of reference pool mortgage tranches associated with actual mortgage loans that were securitized into agency mortgage-backed securities and sold as Structured Agency Credit Risk Notes. At March 31, 2018 , there was no reported event of default on this obligation. The credit derivative is recorded at fair value based upon models developed by the Company. Significant unobservable inputs considered in the valuation include the impact of changes in interest rates, future defaults, delinquency and prepayment rates, credit spreads, changes in credit quality, and other market factors. Guaranteed Minimum Income Benefit Contract The Company has derivatives embedded in certain reinsurance contracts. For a certain life reinsurance contract, the Company pays the ceding company a fixed amount equal to the estimated present value of the excess of the guaranteed benefit over the account balance upon the policyholder's election to take the income benefit. The fair value of this derivative is determined based on the present value of expected cash flows. Modified Coinsurance and Funds Withheld Contracts, including Life Retrocession Embedded Derivative The Company has modified coinsurance and funds withheld reinsurance agreements that provide for a return to be paid based on a portfolio of fixed income securities. As such, the agreements contain an embedded derivative. The embedded derivative is bifurcated from the funds withheld balance and recorded at fair value, with changes in fair value recognized in earnings through "Net realized and unrealized gains (losses) on derivative instruments." In addition, the Company entered into the GreyCastle Life Retro Arrangements, as described in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ." The embedded derivative related to the GreyCastle Life Retro Arrangements is recorded at fair value with changes in fair value recognized in earnings through "Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets." The impact of the GreyCastle Life Retro Arrangements on the Company's results was as follows: Impact of GreyCastle Life Retro Arrangements Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Underwriting profit (loss) $ — $ — Net investment income - Life Funds Withheld Assets 30,398 33,364 Net realized gains (losses) on investments, trading - Life Funds Withheld Assets 10,358 34,474 Net unrealized gains (losses) on investments, trading - Life Funds Withheld Assets (31,667 ) (1,406 ) OTTI - Life Funds Withheld Assets (1,203 ) — Foreign exchange gains (losses) 10,719 3,294 Other income and expenses (36 ) (70 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets 22,921 (50,101 ) Net income (loss) $ 41,490 $ 19,555 Change in net unrealized gains (losses) on investments AFS - Life Funds Withheld Assets (35,754 ) (20,108 ) Change in adjustments related to future policy benefit reserves 4,164 5,132 Change in cumulative translation adjustment - Life Funds Withheld Assets (9,900 ) (4,579 ) Total changes to other comprehensive income as a result of GreyCastle Life Retro Arrangements $ (41,490 ) $ (19,555 ) Comprehensive income (loss) $ — $ — As shown in the table above, although the Company's net income (loss) is subject to variability related to the GreyCastle Life Retro Arrangements, there is no net impact on the Company's comprehensive income in any period. The life retrocession embedded derivative value includes the interest income, unrealized gains and losses, and realized gains and losses from sale of the Life Funds Withheld Assets. Other The Company has entered into short-term weather derivative swap agreements as the fixed rate payer which provide for a return to be paid to the Company based on the occurrence of certain industry weather events. The derivatives are recorded at fair value with changes in fair value recognized in earnings through "Net realized and unrealized gains (losses) on derivative instruments." (c) Derivative Instruments Designated as Fair Value Hedges The Company may designate certain of its derivative instruments as fair value hedges or cash flow hedges, in which case it formally and contemporaneously documents all relationships between the hedging instruments and hedged items and links the hedging derivatives to specific assets and liabilities. The Company assesses the effectiveness of the hedge both at inception and on an on-going basis, and determines whether the hedge is highly effective in offsetting changes in fair value or cash flows of the linked hedged item. Settlement of Fair Value Hedges During the fourth quarter of 2010 and the third quarter of 2012, the Company settled five interest rate contracts designated as fair value hedges of certain of the Company's structured indemnity contracts. The gain on settlement of these contracts, which represented the effective portion of the hedging relationship, was recorded as an increase in the carrying value of the deposit liabilities and is being amortized through interest expense over the remaining term of the structured indemnity contracts. A summary of the fair value hedges that have been settled and their impact on results up to the indicated periods, as well as the remaining balance of the fair value hedges and average years remaining to maturity at March 31, 2018 and 2017 , are shown below: Settlement of Fair Value Hedges - Summary Fair Value Hedges - Structured Indemnity Contracts March 31, (U.S. dollars in thousands, except years) 2018 2017 Cumulative reduction to interest expense $ 124,255 $ 122,118 Remaining balance $ 108,940 $ 111,077 Weighted average years remaining to maturity 18.3 18.7 (d) Contingent Credit Features Certain derivative agreements entered into by the Company or its subsidiaries contain credit rating downgrade provisions that permit early termination of the agreements by the counterparty if collateral is not posted following failure to maintain certain credit ratings from one or more of the principal credit rating agencies. If the Company were required to terminate such agreements early due to a credit rating downgrade, it could potentially be in a net liability position at the time of settlement of such agreements. The aggregate fair value of all derivative agreements containing such rating downgrade provisions that were in a liability position and any collateral posted under these agreements at March 31, 2018 and December 31, 2017 were as follows: Contingent Credit Features - Summary: (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Aggregate fair value of derivative agreements with downgrade provisions in a net liability position $ (7,872 ) $ 7,464 Collateral posted to counterparty $ 6,720 $ 40 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for the sale of an asset or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The fair values for AFS investments are generally sourced from third parties. The fair value of fixed income securities is based upon quoted market values where available, "evaluated bid" prices provided by third-party pricing services ("pricing services") where quoted market values are not available, or by reference to broker quotes where pricing services do not provide coverage for a particular security. While the Company receives values for the majority of the investment securities it holds from pricing services, it is ultimately management's responsibility to determine whether the values received and recorded in the financial statements are representative of appropriate fair value measurements. The Company performs regular reviews of the prices received from its third-party valuation sources to assess whether the prices represent a reasonable estimate of the fair value. The approaches taken by the Company include, but are not limited to, annual reviews of the controls of the external parties responsible for sourcing valuations that are subjected to automated tolerance checks, quarterly reviews of the valuation sources and dates, comparisons of executed sales prices to prior valuations, regular deep dives on a sample of securities across our major asset classes and monthly reconciliations between the valuations provided by external parties and valuations provided by third-party investment managers at a portfolio level. In addition, the Company assesses the effectiveness of valuation controls performed by external parties responsible for sourcing appropriate valuations from third parties on its behalf. The approaches taken by these external parties to gain comfort include, but are not limited to, comparing valuations between external sources, completing recurring reviews of third-party pricing services' methodologies and reviewing controls of the third-party service providers to support the completeness and accuracy of the prices received. Where broker quotes are the primary source of the valuations, sufficient information regarding the specific inputs utilized by the brokers is generally not available to support a Level 2 classification. The Company obtains the majority of broker quoted values from third-party investment managers who perform independent verifications of these valuations using pricing matrices based upon information gathered by market traders. In addition, for the majority of these securities, the Company compares the broker quotes to independent valuations obtained from pricing services, which may also consist of broker quotes, to assess if the prices received represent reasonable estimates of the fair value. For further information about the Company's fair value measurements, see Item 8, Note 1(b), "Significant Accounting Policies - Fair Value Measurements ," and Item 8, Note 8, "Fair Value Measurements ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (a) Fair Value Summary The following tables set forth the Company's assets and liabilities that were accounted for at fair value at March 31, 2018 and December 31, 2017 by level within the fair value hierarchy: March 31, 2018 (U.S. dollars in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Counterparty Netting Balance at Assets Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ — $ 4,182,925 $ 5,034 $ — $ 4,187,959 U.S. States, municipalities and political subdivisions — 2,013,162 — — 2,013,162 Non-U.S. Governments — 5,306,651 — — 5,306,651 Corporate — 9,740,542 2,128 — 9,742,670 RMBS — 4,522,786 6,937 — 4,529,723 CMBS — 1,259,519 — — 1,259,519 Other asset-backed securities — 1,588,659 19,737 — 1,608,396 Total fixed maturities - AFS - Excluding Funds Withheld Assets, at fair value $ — $ 28,614,244 $ 33,836 $ — $ 28,648,080 Short-term investments, at fair value (1) — 500,170 — — 500,170 Total investments AFS - Excluding Funds Withheld Assets $ — $ 29,114,414 $ 33,836 $ — $ 29,148,250 Fixed maturities - Life Funds Withheld Assets U.S. Government $ — $ 11,616 $ — $ — $ 11,616 Non-U.S. Governments — 584,406 — — 584,406 Corporate — 1,121,203 — — 1,121,203 RMBS — 503 — — 503 CMBS — 130,070 — — 130,070 Other asset-backed securities — 160,750 — — 160,750 Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value $ — $ 2,008,548 $ — $ — $ 2,008,548 Total investments - AFS, at fair value $ — $ 31,122,962 $ 33,836 $ — $ 31,156,798 Fixed maturities trading U.S. Government $ — $ 9,320 $ — $ — $ 9,320 Non-U.S. Governments — 497,108 — — 497,108 Corporate — 1,525,761 — — 1,525,761 RMBS — 893 — — 893 CMBS — 7,472 — — 7,472 Other asset-backed securities — 43,697 — — 43,697 Total fixed maturities trading - Life Funds Withheld Assets, at fair value $ — $ 2,084,251 $ — $ — $ 2,084,251 Short-term investments trading, at fair value (1) — 7,425 — — 7,425 Total investments trading $ — $ 2,091,676 $ — $ — $ 2,091,676 Cash equivalents (2) 522,096 1,409,637 — — 1,931,733 Cash equivalents - Life Funds Withheld Assets (2) 1,514 77,938 — — 79,452 Equity securities, at fair value 474,118 163,754 — — 637,872 Other investments (3) — 580,946 231,368 — 812,314 Other assets (4) — 17,728 18,175 (7,239 ) 28,664 Total assets accounted for at fair value $ 997,728 $ 35,464,641 $ 283,379 $ (7,239 ) $ 36,738,509 Liabilities Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) (5) $ — $ 1,085,099 $ — $ — $ 1,085,099 Other liabilities (4) — 29,560 17,841 (7,239 ) 40,162 Total liabilities accounted for at fair value $ — $ 1,114,659 $ 17,841 $ (7,239 ) $ 1,125,261 December 31, 2017 (U.S. dollars in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Counterparty Netting Balance at December 31, 2017 Assets Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ — $ 4,344,450 $ 18,290 $ — $ 4,362,740 U.S. States, municipalities and political subdivisions — 2,064,640 — — 2,064,640 Non-U.S. Governments — 5,201,581 — — 5,201,581 Corporate — 9,793,841 1,292 — 9,795,133 RMBS — 4,724,402 — — 4,724,402 CMBS — 1,244,017 — — 1,244,017 Other asset-backed securities — 1,504,131 5,232 — 1,509,363 Total fixed maturities - AFS - Excluding Funds Withheld Assets, at fair value $ — $ 28,877,062 $ 24,814 $ — $ 28,901,876 Short-term investments, at fair value (1) — 815,481 — — 815,481 Equity securities, at fair value 557,510 156,457 — — 713,967 Total investments AFS - Excluding Funds Withheld Assets $ 557,510 $ 29,849,000 $ 24,814 $ — $ 30,431,324 Fixed maturities - Life Funds Withheld Assets U.S. Government $ — $ 11,316 $ — $ — $ 11,316 Non-U.S. Governments — 584,534 — — 584,534 Corporate — 1,137,213 — — 1,137,213 RMBS — 515 — — 515 CMBS — 122,272 — — 122,272 Other asset-backed securities — 171,262 — — 171,262 Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value $ — $ 2,027,112 $ — $ — $ 2,027,112 Total investments - AFS, at fair value $ 557,510 $ 31,876,112 $ 24,814 $ — $ 32,458,436 Fixed maturities trading U.S. Government $ — $ 11,042 $ — $ — $ 11,042 U.S. States, municipalities and political subdivisions — 31 — — 31 Non-U.S. Governments — 485,171 — — 485,171 Corporate — 1,460,292 — — 1,460,292 RMBS — 932 — — 932 CMBS — 7,580 — — 7,580 Other asset-backed securities — 41,337 — — 41,337 Total fixed maturities trading - Life Funds Withheld Assets, at fair value $ — $ 2,006,385 $ — $ — $ 2,006,385 Short-term investments trading, at fair value (1) — 14,965 — — 14,965 Total investments trading $ — $ 2,021,350 $ — $ — $ 2,021,350 Cash equivalents (2) 279,224 1,271,483 — — 1,550,707 Cash equivalents - Life Funds Withheld Assets (2) — 67,982 — — 67,982 Other investments (3) — 570,931 221,708 — 792,639 Other assets (4) — 14,467 18,327 (3,579 ) 29,215 Total assets accounted for at fair value $ 836,734 $ 35,822,325 $ 264,849 $ (3,579 ) $ 36,920,329 Liabilities Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) (5) $ — $ 1,112,969 $ — $ — $ 1,112,969 Other liabilities (4) — 44,591 18,305 (3,579 ) 59,317 Total liabilities accounted for at fair value $ — $ 1,157,560 $ 18,305 $ (3,579 ) $ 1,172,286 ____________ (1) Short-term investments consist primarily of U.S. and Non-U.S. Government securities, Corporate securities, and Other asset-backed securities. (2) Cash equivalents balances subject to fair value measurement include certificates of deposit and money market funds. Operating cash balances are not subject to recurring fair value measurement guidance. (3) Excluded from Other Investments are certain investments that are measured using net asset value as a practical expedient in the amount of $201.8 million and $198.2 million at March 31, 2018 and December 31, 2017 , respectively. Under GAAP, these investments are excluded from the fair value hierarchy table. In addition, the Other investments balance excludes loans held at amortized cost, which totaled $172.9 million at March 31, 2018 and $173.0 million at December 31, 2017 . For further information, see Item 8, Note 6, "Other Investments ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (4) Other assets and other liabilities include derivative instruments. The derivative balances included in each category are reported gross of cash collateral by level with a counterparty netting adjustment presented separately in the Counterparty Netting column. The fair values of the individual derivative contracts are reported gross in their respective levels based on the fair value hierarchy. For further details regarding derivative fair values and associated collateral received or paid, see Note 5, "Derivative Instruments ." (5) Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) include balances related to the life retrocession embedded derivative, under which all investment results associated with the Life Funds Withheld Assets related to the GreyCastle Life Retro Arrangements described in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," accrue to the benefit of GCLR. (b) Level 2 Asset Valuations U.S. Government, Corporate and Non-U.S. Governments Transaction activity inputs utilized in the valuation of fair value hierarchy Level 2 securities within these sub-categories include actual trades, dealer posts, results of bids-wanted, institutional secondary offerings, primary market offerings and Trade Reporting and Compliance Engine ("TRACE") trade feeds. As part of the evaluation process, transaction activity is compared to prior evaluations and necessary adjustments are made accordingly. Market-color inputs include actively quoted benchmark issues, buy-side/evaluator dialogue, sell-side/evaluator dialogue and credit derivative indices. U.S. States, municipalities and political subdivisions Transaction activity inputs utilized in the valuation of fair value hierarchy Level 2 securities within this sub-category include actual trades, dealer posts, results of bids-wanted, institutional secondary offerings, primary market offerings, and Municipal Securities Rulemaking trade feeds. As part of the evaluation process, transaction activity is compared to prior evaluations and necessary adjustments are made accordingly. Market-color inputs include bids, offerings, two-sided markets, buy-side/evaluator dialogue and sell-side/evaluator dialogue. Credit information inputs include issuer financial statements, default and material event notices, developer reports and liquidation and restructuring analyses. RMBS, CMBS and Other asset-backed securities As part of the fair valuation process, Level 2 securities in these sub-categories are analyzed by collateral type, deal structure, deal performance and vintage. Market inputs into the valuation process for each sub-category include reported or observed trades, results of bids-wanted, buy-side/evaluator dialogue, sell-side/evaluator dialogue, dealer offerings and market research reports. Cash flow inputs into the evaluation process include conditional prepayment rates, conditional decay rates, delinquency and loss severity rates. This assumptive data is reviewed and updated using third-party reported information to reflect current market convention. Equity securities and other investments Equity securities and other investment securities generally include investments in thinly traded equity funds and fixed income funds (including overseas deposits). Fair value is determined based upon prices received from pricing services as well as from net asset values ("NAV") received from the fund administrators. Other assets and other liabilities Other assets and other liabilities primarily include over-the-counter ("OTC") derivatives, which are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative independent pricing sources where an understanding of the inputs utilized in arriving at the valuations is obtained. Where models are used, the selection of a particular model to value an OTC derivative depends upon the contractual terms and specific risks inherent in the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, interest rate swaps and options, model inputs can generally be verified against observable inputs and model selection does not involve significant management judgment. Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) The calculation of the change in fair value of the embedded derivative associated with the GreyCastle Life Retro Arrangements includes the interest income, realized and unrealized gains and losses on Life Funds Withheld Assets and certain expenses related to the Life Funds Withheld Assets. The fair value of the embedded derivative is included in "Funds withheld on GreyCastle life retrocession arrangements, net of future policy benefit reserves recoverable" on the Unaudited Consolidated Balance Sheets. The fair value of the embedded derivative is considered a Level 2 valuation. There were no significant transfers between Level 1 and Level 2 during each of the three months ended March 31, 2018 and 2017 . (c) Level 3 Assets and Liabilities The tables below present additional information about assets and liabilities measured at fair value on a recurring basis and for which Level 3 inputs were utilized to determine fair value. The tables present a reconciliation of the beginning and ending balances for the three months ended March 31, 2018 and 2017 for all financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3) at March 31, 2018 and 2017 , respectively. The tables do not include gains or losses that were reported in Level 3 in prior periods for assets that were transferred out of Level 3 prior to March 31, 2018 and 2017 , respectively. Gains and losses for assets and liabilities classified within Level 3 in the table below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). Further, the tables below do not take into consideration the effect of offsetting Level 1 and 2 financial instruments entered into by the Company that are either economically hedged by certain exposures to the Level 3 positions or that hedge the exposures in Level 3 positions. In general, Level 3 assets include securities for which values were obtained from brokers where either significant inputs were utilized in determining the values that were difficult to corroborate with observable market data, or sufficient information regarding the specific inputs utilized by the broker was not available to support a Level 2 classification. Transfers into or out of Level 3 primarily arise as a result of the valuations utilized by the Company changing between either those provided by independent pricing services that do not contain significant unobservable inputs and other valuations sourced from brokers that are considered Level 3. Fixed maturities and short-term investments The Company's Level 3 assets consist primarily of U.S. Government securities, Corporates and Other asset-backed securities, for which non-binding broker quotes are the primary source of the valuations. Sufficient information regarding the specific inputs utilized by the brokers was not available to support a Level 2 classification. The Company obtains the majority of broker quotes for these securities from third-party investment managers who perform independent verifications of these valuations using pricing matrices based upon information gathered by market traders. In addition, for the majority of these securities, the Company compares the broker quotes to independent valuations obtained from pricing services, which may also consist of broker quotes, to assess if the prices received represent a reasonable estimate of the fair value. Although the Company does not have access to the specific unobservable inputs that may have been used in the fair value measurements of these securities provided by brokers, we would expect that the significant inputs considered are prepayment rates, probability of default, loss severity in the event of default, recovery rates, liquidity premiums and reinvestment rates. Significant increases (decreases) in any of those inputs in isolation could result in a significantly different fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The remainder of the Level 3 assets relate primarily to private investments (including funds), hedge funds and certain derivative positions as described below. Other investments Included within the other investments component of the Company's Level 3 valuations are private investments (including funds) and hedge funds where the Company is not deemed to have significant influence over the investee. The fair value of these investments is based upon net asset values received from the investment manager or general partner of the respective entity. The underlying investments held by the investee that form the basis of the net asset value include assets such as private business ventures that require significant Level 3 inputs in the determination of the individual underlying holding values. Accordingly, the fair value of the Company's investment in each entity is classified within Level 3. Management reviews the values and incorporates factors such as the most recent financial information received, annual audited financial statements and the values at which capital transactions with the investee take place when applying judgment regarding whether any adjustments should be made to the net asset value received in recording the fair value of each position. Investments in hedge funds included in other investments utilize strategies including arbitrage, directional, event driven and multi-style. The funds potentially have lockup and gate provisions that may limit redemption liquidity. For further details regarding the nature of other investments and related features, see Item 8, Note 6, "Other Investments ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . Derivative instruments Derivative instruments recorded within other liabilities and classified within Level 3 include: credit derivatives sold providing protection on senior tranches of structured finance transactions where the value is obtained directly from the investment bank counterparty and sufficient information regarding the inputs utilized in such valuation was not obtained to support a Level 2 classification, and guaranteed minimum income benefits embedded within one reinsurance contract. The majority of inputs utilized in the valuations of these types of derivative contracts are considered Level 1 or Level 2; however, each valuation includes at least one Level 3 input that was significant to the valuation and, accordingly, the values are disclosed within Level 3. Level 3 Assets and Liabilities - Three Months Ended March 31, 2018 (U.S. dollars in thousands) Balance, beginning of period Realized gains (losses) Movement in unrealized gains (losses) Purchases and Issuances Sales Settlements Net transfers into (out of) Level 3 Balance, end of period Movement in total gains (losses) relating to investments still held U.S. Government $ 18,290 $ (354 ) $ 114 $ — $ (13,016 ) $ — $ — $ 5,034 $ (36 ) Corporate 1,292 — 43 — — (101 ) 894 2,128 44 RMBS — — — 980 — — 5,957 6,937 — Other asset-backed securities 5,232 — (28 ) 15,407 — (874 ) — 19,737 — Other investments 221,708 847 5,191 14,280 — (10,658 ) — 231,368 5,338 Derivative Contracts - Net 22 — 312 — — — — 334 312 Total $ 246,544 $ 493 $ 5,632 $ 30,667 $ (13,016 ) $ (11,633 ) $ 6,851 $ 265,538 $ 5,658 Level 3 Assets and Liabilities - Three Months Ended March 31, 2017 (U.S. dollars in thousands) Balance, beginning of period Realized gains (losses) Movement in unrealized gains (losses) Purchases and Issuances Sales Settlements Net transfers into (out of) Level 3 Balance, end of period Movement in total gains (losses) relating to investments still held U.S. Government $ 24,751 $ (19 ) $ (355 ) $ — $ — $ (311 ) $ (4,758 ) $ 19,308 $ (373 ) Corporate 20,085 — 11 — (10,284 ) (31 ) 118 9,899 11 RMBS — 17 (526 ) — — (173 ) 4,063 3,381 (509 ) CMBS 99 — 2 — — — — 101 2 Other asset-backed securities 1,131 30 101 — — (46 ) 2,734 3,950 131 Short-term investments — — — 11,693 — (28 ) — 11,665 — Other investments 205,528 (5,541 ) 7,102 4,982 — (5,397 ) (2,709 ) 203,965 6,343 Derivative Contracts - Net 2 — 161 — — — — 163 163 Total $ 251,596 $ (5,513 ) $ 6,496 $ 16,675 $ (10,284 ) $ (5,986 ) $ (552 ) $ 252,432 $ 5,768 (d) Financial Instruments Not Carried at Fair Value Authoritative guidance over disclosures about the fair value of financial instruments requires additional disclosure of fair value information for financial instruments not carried at fair value in both interim and annual reporting periods. Certain financial instruments, particularly insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents, accrued investment income, net receivable from investments sold, other assets, net payable for investments purchased, other liabilities and other financial instruments not included below approximated their fair values. The following table includes financial instruments for which the carrying value differs from the estimated fair values at March 31, 2018 and December 31, 2017 . All of these fair value estimates are considered Level 2 fair value measurements. March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Financial Assets - Other investments $ 172,879 $ 181,349 $ 172,982 $ 182,222 Deposit liabilities $ 982,963 $ 1,190,885 $ 1,042,677 $ 1,266,682 Notes payable and debt 3,240,461 3,483,428 3,220,769 3,507,108 Financial Liabilities $ 4,223,424 $ 4,674,313 $ 4,263,446 $ 4,773,790 The Company historically participated in structured transactions, the remaining of which are largely comprised of an investment in a payment obligation with an insurance company. This transaction is carried at amortized cost. The fair value of this investment held by the Company is determined through use of an internal model utilizing benchmark yields, issuer spreads and reference data. Deposit liabilities include obligations under structured insurance and reinsurance transactions. For purposes of fair value disclosures, the Company determined the estimated fair value of the deposit liabilities by assuming a discount rate equal to the appropriate U.S. Treasury rate plus 26.3 basis points and 45.5 basis points at March 31, 2018 and December 31, 2017 , respectively. The discount rate incorporates the Company's own credit risk into the determination of estimated fair value. The fair values of the Company's notes payable and debt outstanding were determined based on quoted market prices. There are no significant concentrations of credit risk within the Company's financial instruments not carried at fair value as defined in the authoritative guidance over necessary disclosures, which excludes certain financial instruments, particularly insurance contracts. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other Intangible Assets | Goodwill and Other Intangible Assets The Company had goodwill and other intangible assets of $2.2 billion at March 31, 2018 and December 31, 2017 . The following table presents an analysis of goodwill, intangible assets with an indefinite life and intangible assets with a definite life for the three months ended March 31, 2018 : (U.S. dollars in thousands) Goodwill Intangible Intangible Total Balance at December 31, 2017 $ 1,234,150 $ 699,014 $ 292,587 $ 2,225,751 Amortization — — (4,944 ) (4,944 ) Foreign Currency Translation 4,850 2,916 1,933 9,699 Balance at March 31, 2018 $ 1,239,000 $ 701,930 $ 289,576 $ 2,230,506 |
Losses and Loss Expenses
Losses and Loss Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Losses and loss expenses | Losses and Loss Expenses The following table represents a reconciliation of the beginning and ending balances of unpaid losses and loss expenses, including an analysis of the Company's paid and unpaid losses and loss expenses incurred for the years indicated: (U.S. dollars in thousands) 2018 2017 Unpaid losses and loss expenses at the beginning of the year $ 29,696,779 $ 25,939,571 Unpaid losses and loss expenses recoverable at the beginning of the year (1) 7,239,446 5,480,300 Net unpaid losses and loss expenses at the beginning of the year $ 22,457,333 $ 20,459,271 Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in: Current year 1,631,142 1,559,452 Prior year (9,136 ) 24,004 Total net incurred losses and loss expenses $ 1,622,006 $ 1,583,456 Foreign exchange and other 262,571 56,244 Less net losses and loss expenses paid in respect of losses occurring in: Current year 128,691 106,472 Prior year 1,774,194 1,222,119 Total net paid losses $ 1,902,885 $ 1,328,591 Net unpaid losses and loss expenses at March 31 22,439,025 20,770,380 Unpaid losses and loss expenses recoverable at March 31 (1) 7,262,543 5,674,744 Unpaid losses and loss expenses at March 31 $ 29,701,568 $ 26,445,124 ____________ (1) P&C business only, net of provision for uncollectible reinsurance. The following table presents the net (favorable) adverse prior year loss development of the Company's loss and loss expense reserves for its P&C operations by operating segment for each of the years indicated: Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Insurance segment $ (5,295 ) $ (4,642 ) Reinsurance segment (3,841 ) 28,646 Total $ (9,136 ) $ 24,004 The significant developments in prior year loss reserve estimates for each of the years indicated within the Company's Insurance and Reinsurance segments are discussed below. Insurance Segment The following table summarizes the net (favorable) adverse prior year reserve development by product type relating to the Insurance segment for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Professional $ (1,830 ) $ (5 ) Casualty (5,115 ) (4,770 ) Property 1,257 81 Specialty 393 52 Total $ (5,295 ) $ (4,642 ) Net favorable prior year reserve development was $5.3 million for the three months ended March 31, 2018 for the Insurance segment. Although movements were small by product type, this was a result of offsetting movements in catastrophe losses, with strengthening on recent 2017 catastrophes offset by releases on more mature events. Net favorable prior year reserve development totaled $4.6 million for the Insurance segment for the three months ended March 31, 2017 . This development was mainly attributable to casualty lines of business. Reinsurance Segment The following table summarizes the net (favorable) adverse prior year reserve development by line of business relating to the Reinsurance segment for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Property and other short-tail lines $ (18,994 ) $ (54,916 ) Casualty and other long-tail lines 15,153 83,562 Total $ (3,841 ) $ 28,646 Net favorable prior year reserve development was $3.8 million for the three months ended March 31, 2018 for the Reinsurance segment, mainly attributable to the following: ▪ Net favorable prior year development for the short-tail lines totaled $19.0 million primarily due to better than expected development on attritional losses on the Property, Marine and Crop books, releases on older catastrophe losses and the general catastrophe IBNR held at the end of the prior year being partially offset by strengthening on Hurricane Irma, the Northern California wildfires and some older large losses. ▪ Net unfavorable prior year development for the long-tail lines totaled $15.2 million driven primarily by unfavorable experience on the 2014 underwriting year for the London professional indemnity and European motor casualty books. Net unfavorable prior year reserve development totaled $28.6 million for the three months ended March 31, 2017 . The net adverse prior year development was primarily due to the impact of the decrease to the discount rate used to calculate lump sum awards in U.K. bodily injury cases. This adverse development was partially offset by better than expected attritional experience in property catastrophe, property treaty and specialty lines. There is no assurance that conditions and trends that have affected the development of liabilities in the past will continue. Accordingly, it may not be appropriate to extrapolate future redundancies or deficiencies based on the Company's historical results. |
Notes Payable and Debt and Fina
Notes Payable and Debt and Financing Arrangements | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable and Debt and Financing Arrangements | Notes Payable and Debt and Financing Arrangements (a) Notes Payable and Debt The following table presents the Company's outstanding notes payable and debt at March 31, 2018 and December 31, 2017 : (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Outstanding (1) Outstanding (1) Debt Issuance: $300 million, 2.30% Senior Notes due December 2018 $ 299,525 $ 299,357 $400 million, 5.75% Senior Notes due October 2021 398,492 398,384 $350 million, 6.375% Senior Notes due November 2024 349,275 349,248 $500 million, 4.45% Subordinated Notes due March 2025 494,340 494,138 $325 million, 6.25% Senior Notes due May 2027 323,571 323,531 $300 million, 5.25% Senior Notes due December 2043 296,593 296,560 $500 million, 5.5% Subordinated Notes due March 2045 (2) 472,928 472,832 €500 million, 3.25% Subordinated Notes due June 2047 (3) 605,737 586,719 Total debt carrying value $ 3,240,461 $ 3,220,769 ____________ (1) "Outstanding" data represent March 31, 2018 and December 31, 2017 accreted values. (2) On July 7, 2017, the Company repurchased and canceled $16.7 million of the original debt issuance. See below for further details. (3) This issuance carries a fixed coupon of 3.25% for a period of ten years, then a floating rate of three-month EURIBOR plus 2.90% from (and including) June 29, 2027 through maturity. The outstanding amount is subject to movement due to foreign exchange. All outstanding debt of the Company at March 31, 2018 and December 31, 2017 , which is identified in the table above, was issued by XLIT, a 100% owned subsidiary of XL Group. XLIT's outstanding debt, other than the Senior Notes due 2024 and due 2027, are listed on the NYSE and are fully and unconditionally guaranteed by XL Group. See Note 16, "Guarantor Financial Information ," for condensed comparative financial information of XL Group and XLIT for the periods ended March 31, 2018 and December 31, 2017 . The ability of XLIT, like that of the Company, to obtain funds from its subsidiaries to satisfy any of its obligations, including under guarantees, is subject to certain contractual restrictions, applicable laws and statutory requirements of the various countries in which the subsidiaries operate, including, among others, Bermuda, the United States, Ireland, Switzerland and the United Kingdom. For details of the required statutory capital and surplus for the principal operating subsidiaries of the Company, see Item 8, Note 24, "Statutory Financial Data ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . On June 29, 2017, XLIT issued €500 million ( $568.8 million ) of fixed to floating rate subordinated notes due June 2047, with a fixed coupon of 3.25% for a period of ten years, then a floating rate of three-month EURIBOR plus 2.90% thereafter. The notes were issued at 99.054% of the face amount and net proceeds were $558.3 million . Related expenses of the offering amounted to approximately $10.5 million . These costs were deferred and are being amortized over the expected life of the subordinated notes. XLIT and the Company were in compliance with all covenants at March 31, 2018 , and XLIT and the Company currently remain in compliance with all covenants. For details regarding the rest of the Company's facilities, see Item 8, Note 14(a), "Notes Payable and Debt and Financing Arrangements - Notes Payable and Debt ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (b) Letter of Credit ("LOC") Facilities and Other Sources of Collateral The Company has several credit facilities provided on both syndicated and bilateral bases from commercial banks. The Company may utilize these credit facilities to issue LOCs in support of non-admitted insurance and reinsurance operations in the U.S. and to meet capital requirements at Lloyd's. Alternatively, under certain of the credit facilities, the Company instead may elect to utilize a stated portion of such facilities' capacity for revolving loans to support other operating or financing needs, which would reduce the amount available for LOCs. XL Group and several of its wholly-owned subsidiaries provide guarantees, on a joint and several basis, for obligations of the Company under certain of these facilities. The following table presents the Company's ten letter of credit facilities and revolving credit facilities at March 31, 2018 and December 31, 2017 : (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Facility Name: Commitment In Use/ Commitment In Use/ 2016 Credit Agricole Facility I 125,000 125,000 125,000 125,000 2016 Credit Agricole Facility II 125,000 125,000 125,000 125,000 2017 Commonwealth Bank Facility 215,000 215,000 215,000 215,000 2017 Credit Suisse Facility 100,000 100,000 100,000 100,000 FAL Facility I 125,000 125,000 125,000 125,000 FAL Facility II 125,000 125,000 125,000 125,000 FAL Facility III 125,000 125,000 125,000 125,000 FAL Facility IV 125,000 125,000 125,000 125,000 Syndicated Unsecured Facility 750,000 105,655 750,000 2,000 2017 Commerzbank Facility 100,000 100,000 100,000 100,000 Total unsecured LOC facilities $ 1,915,000 $ 1,270,655 $ 1,915,000 $ 1,167,000 Facilities collateralized by certain investment assets 1,552,841 1,536,556 1,477,986 1,382,226 Total LOC facilities $ 3,467,841 $ 2,807,211 $ 3,392,986 $ 2,549,226 Percentage of facilities collateralized by certain investment assets 54.7 % 54.2 % Certain credit facilities permit the Company to utilize up to $750.0 million as of March 31, 2018 and December 31, 2017 , respectively, for revolving loans to support general operating and financing needs. At March 31, 2018 and December 31, 2017 , $105.7 million and $2.0 million , respectively, were utilized under these facilities to issue letters of credit, leaving $644.3 million and $ 748.0 million , respectively, available to support other operating and financing needs. For details regarding the Company's facilities, see Item 8, Note 14(b), "Notes Payable and Debt and Financing Arrangements - Letter of Credit Facilities ("LOC") and Other Sources of Collateral ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (a) Investment Manager Affiliates At March 31, 2018 and 2017 , the Company owned minority stakes in two and four independent investment management companies ("Investment Manager Affiliates"), respectively, that are actively managing client capital and seeking growth opportunities. The Company also invests in certain of the funds and limited partnerships and other legal entities managed by these affiliates, and, through these funds and partnerships, pays management fees and, in some instances, performance fees to the Company's Investment Manager Affiliates. In addition, at March 31, 2018 and March 31, 2017 , the Company owned a minority stake in an independent firm that provides technology and other services to alternative asset managers and allocators. The Company's interest in this enterprise is reported as an Investment Manager Affiliate, and the Company pays fees to this Investment Manager Affiliate in exchange for it providing its services to the Company. Investment Manager Affiliate results are reported in the Unaudited Consolidated Statements of Income as "Income (loss) from operating affiliates." See Item 8, Note 5, "Investments in Affiliates ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (b) Assumed Reinsurance Contracts In the normal course of business, the Company enters into assumed reinsurance contracts with certain of its insurance affiliates, or their subsidiaries. During the three months ended March 31, 2018 and 2017 , these contracts resulted in reported net premiums, reported net losses, and reported net acquisition costs as summarized below: (U.S. dollars in thousands) Three months ended March 31, 2018 2017 Reported net premiums $ 15,578 $ 21,715 Reported net losses $ 11,719 $ 11,250 Reported net acquisition costs $ 5,587 $ 9,214 (c) New Ocean Capital Management Limited ("New Ocean") Commencing in 2014, several of the Company's wholly-owned subsidiaries retroceded assumed reinsurance business to special purpose reinsurers that receive capital from funds managed by the Company's subsidiary, New Ocean, as discussed in Note 11, "Variable Interest Entities ." Underwriting administration services are provided to the special purpose reinsurers by other subsidiaries of the Company under service fee agreements, while investment advisory services are provided by New Ocean. During the three months ended March 31, 2018 , ceded premiums earned, ceded losses and loss expenses incurred, ceding commission income, and other fee income related to these retrocessional contracts were not material to the Company. (d) XL Innovate In April 2015, the Company announced the creation and sponsorship of the XL Innovate Fund, LP ("XL Innovate"), a venture capital initiative with a strategic focus on developing new capabilities in the insurance sector. The majority of XL Innovate's initial capital was financed by the Company. XL Innovate primarily seeks investments in equity positions of entities that provide new market opportunities for the Company throughout the world, striving to create partnerships outside of the traditional underwriting space to find ways to underwrite currently uninsured risks. The family trust of an employee of the Company owns a 5.21% non-controlling equity interest in XL Innovate. The employee serves as a member of the board of directors of XL Innovate, and maintains responsibility over the business generated by it. The underlying investments held by XL Innovate are reflected in the Company's Unaudited Consolidated Financial Statements in accordance with the Accounting Policies provided in Item 8, Note 1, "Significant Accounting Policies " to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 , based on the Company's level of investment in, and control over, such entities. Aside from investments made where the employee's family trust maintains non-controlling interest, there were no other material transactions between the Company and this employee or the employee's family trust for the three months ended March 31, 2018 . |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2018 | |
Variable Interest Entities Disclosure [Abstract] | |
Variable Interest Entities | Variable Interest Entities ("VIEs") At times, the Company has utilized VIEs both indirectly and directly in the ordinary course of the Company's business. Within its investment portfolio, the Company has holdings in hedge funds, private equity entities and other investment vehicles. A number of these vehicles are considered VIEs based on their legal form and the generally passive role of their investors. As the Company lacks the ability to control the activities that most significantly impact the economic performance of these VIEs, the Company is not considered the primary beneficiary and does not consolidate these entities. The activities of the entities are generally limited to holding investments. The exposure to loss from these investments is limited to the carrying value of the investments at the balance sheet date. In 2013, the Company, along with other investors, formed New Ocean to act as an investment manager focused on providing third-party investors access to insurance-linked securities, such as catastrophe bonds, and other insurance and reinsurance capital markets products. The Company holds a majority voting interest in New Ocean through its ownership of common shares and, accordingly, the financial statements of New Ocean have been included in the Unaudited Consolidated Financial Statements of the Company. None of the assets, liabilities, revenues or net income of New Ocean were material to the Company as of or for the three months ended March 31, 2018 . The equity interest attributable to third-party investors in New Ocean recorded in the Company's Unaudited Consolidated Balance Sheets as "Non-controlling interest in equity of consolidated subsidiaries" was $0.2 million and $0.5 million at March 31, 2018 and December 31, 2017 , respectively. After the establishment of New Ocean in 2013, the Company, along with other investors, formed a new Bermuda-based investment company, New Ocean Focus Cat Fund Ltd. ("New Ocean FCFL"), which is considered a VIE under GAAP. During the second quarter of 2014, the Company formed another new Bermuda-based investment company, New Ocean Market Value Cat Fund, Ltd. ("New Ocean MVCFL"), which is also considered a VIE under GAAP. New Ocean FCFL and New Ocean MVCFL are both managed by New Ocean. In 2014, New Ocean FCFL invested in a special purpose Bermuda reinsurer, Vector Reinsurance Ltd ("Vector Re"), which was formed for the purpose of underwriting collateralized excess-of-loss reinsurance with a focus on global property catastrophe risks. In the first quarter of 2015, New Ocean MVCFL also invested in Vector Re. Most of Vector Re's current underwriting activity relates to reinsurance business assumed from the Company's subsidiaries. Underwriting administration and claims services are provided to Vector Re by the Company under service fee contracts, while investment advisory services are provided by New Ocean. The Company currently holds a controlling financial interest in Vector Re by way of its controlling financial interests in New Ocean FCFL and New Ocean MVCFL. The total net assets of New Ocean FCFL and New Ocean MVCFL are included in the Unaudited Consolidated Financial Statements of the Company as quantified in the table below. The Company's shares of revenue and net income in its New Ocean-related VIEs were not material to the Company for the three months ended March 31, 2018 . All appropriate inter-company transactions between the Company's consolidated entities have been eliminated. (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Total net assets $ 235,936 $ 242,605 Non-controlling interests 127,650 134,139 Total net assets attributable to XL $ 108,286 $ 108,466 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Financial Guarantee Exposures In February 2017, the Company negotiated the termination of its final outstanding financial guarantee contracts. These contracts provided credit support for a variety of collateral types, including some issued by European financial institutions. The Company did not recognize any financial costs or any security valuation losses as a result of the terminations. (b) Litigation The Company and its subsidiaries are subject to litigation and arbitration in the normal course of business. These lawsuits and arbitrations principally involve claims on policies of insurance and contracts of reinsurance and are typical for the Company and for the property and casualty insurance and reinsurance industry in general. Such claims proceedings are considered in connection with the Company's loss and loss expense reserves. Reserves in varying amounts may or may not be established in respect of particular claims proceedings based on many factors, including the legal merits thereof. In addition to litigation relating to insurance and reinsurance claims, the Company and its subsidiaries are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance or reinsurance policies. This category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct, employment claims, regulatory activity, shareholder disputes or disputes arising from business ventures. The status of these legal actions is actively monitored by management. Legal actions are subject to inherent uncertainties, and future events could change management's assessment of the probability or estimated amount of potential losses from pending or threatened legal actions. Based on available information, it is the opinion of management that the ultimate resolution of pending or threatened legal actions other than claims proceedings, both individually and in the aggregate, will not result in losses having a material adverse effect on the Company's financial position or liquidity at March 31, 2018 . If management believes that, based on available information, it is at least reasonably possible that a material loss (or additional material loss in excess of any accrual) will be incurred in connection with any legal actions other than claims proceedings, the Company discloses an estimate of the possible loss or range of loss, either individually or in the aggregate, as appropriate, if such an estimate can be made, or discloses that an estimate cannot be made. Based on the Company's assessment at March 31, 2018 , no such disclosures were considered necessary. |
Share Capital
Share Capital | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Share Capital | Share Capital (a) Authorized and Issued Buybacks of Common Shares On February 17, 2017, XL Group announced that its Board of Directors approved a new share buyback program, authorizing the purchase of up to $1.0 billion of XL Group shares (the "February 2017 Program"). The Company did not repurchase any shares under the February 2017 Program for the three months ended March 31, 2018 . At March 31, 2018 , $529.1 million remained available for purchase under the February 2017 Program. Other share buybacks, primarily for the purposes of settling employee withholding taxes incurred in connection with the vesting of share-based compensation awards, amounted to $1.7 million for the three months ended March 31, 2018 . (b) Stock Plans The Company's performance incentive programs provide for grants of stock options, restricted stock, equity-classed restricted stock units, liability-classed restricted stock units, liability-classed cash units, performance units and stock appreciation rights. Share-based compensation granted by the Company generally provides for a vesting period of three or four years and certain awards also provide for performance conditions. The Company records compensation expense related to each award over its vesting period, incorporating the best estimate of the expected outcome of performance conditions where applicable. Compensation expense is generally recorded on a straight line basis over the vesting period of an award. See Item 8, Note 19, "Share Capital ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for further information on the Company's performance incentive programs and associated accounting. During the three months ended March 31, 2018 , the Company granted approximately 0.4 million stock options with a weighted-average grant date fair value of $10.34 per option. The fair value of the options issued was estimated on the date of grant using the Black-Scholes option pricing model incorporating the following weighted average assumptions: Dividend yield 2.00 % Risk free interest rate 2.71 % Volatility 27.0 % Expected lives 6.0 years During the three months ended March 31, 2018 , the Company granted 870 restricted stock awards to certain employees and directors of the Company and its subsidiaries with an aggregate grant date fair value of approximately $37,514 . The restricted stock award recipients have the rights and privileges of a shareholder, including the right to receive dividends that are declared and paid and the right to vote such restricted stock. The recipients are not entitled to receive delivery of a stock certificate prior to vesting nor may any restricted stock be sold, transferred, pledged, or otherwise disposed of prior to the satisfaction of all vesting requirements. During the three months ended March 31, 2018 , the Company granted approximately 1.2 million equity-classed restricted stock units to certain employees with an aggregate grant date fair value of approximately $50.9 million . Each equity-classed restricted stock unit represents the Company's obligation to deliver to the holder one common share, and grants may vest in three or four equal installments upon the first, second, third and fourth anniversaries of the date of grant. Equity-classed restricted stock units are granted at the closing market price on the day of grant and entitle the holder to receive dividends that are declared and paid in the form of additional common shares contingent upon vesting. During the three months ended March 31, 2018 , the Company granted approximately 0.3 million performance units (representing a potential maximum share payout of approximately 0.6 million common shares) to certain employees with an aggregate grant date fair value of approximately $13.5 million . Each grant of performance units has a target number of shares, with final payouts ranging from 0% to 200% of the grant amount depending upon the achievement of stated relative and absolute financial performance metrics and stated market metrics along with each employee's continued service through the vesting date. Performance units granted in the current year are granted at the closing market price on the day of grant and entitle the holder to receive dividends that are declared and paid in the form of additional common shares contingent upon vesting. |
Computation of Earnings Per Com
Computation of Earnings Per Common Share and Common Share Equivalent | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Common Share and Common Share Equivalent | Computation of Earnings Per Common Share and Common Share Equivalents The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (In thousands, except per share amounts) 2018 2017 Basic earnings per common share & common share equivalents outstanding: Net income (loss) attributable to common shareholders $ 152,648 $ 152,843 Weighted average common shares outstanding - basic 256,922 265,690 Basic earnings per common share & common share equivalents outstanding $ 0.59 $ 0.58 Diluted earnings per common share & common share equivalents outstanding: Weighted average common shares outstanding - basic 256,922 265,690 Impact of share-based compensation 4,254 4,077 Weighted average common shares outstanding - diluted 261,176 269,767 Diluted earnings per common share & common share equivalents outstanding $ 0.58 $ 0.57 Dividends per common share $ 0.22 $ 0.22 For the three months ended March 31, 2018 and 2017 , common shares available for issuance under share-based compensation plans noted in the table below were not included in the calculation of diluted earnings per common share because the assumed exercise or issuance of such shares would be anti-dilutive. Three Months Ended March 31, (In millions) 2018 2017 Common shares available for issuance under share-based compensation plans 0.6 3.0 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income Loss Note [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in AOCI, net of tax, by component for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 (U.S. dollars in thousands) Unrealized Gains (Losses) on Investments (1) OTTI Losses Recognized in AOCI Foreign Currency Translation Adjustments Underfunded Pension Liability Cash Flow Hedge Total Balance, beginning of period, net of tax $ 870,478 $ (43,527 ) $ 83,042 $ (22,356 ) $ 1,794 $ 889,431 OCI before reclassifications (399,792 ) — (3,112 ) (223 ) — (403,127 ) Amounts reclassified from AOCI 10,875 3,713 — — (48 ) 14,540 Tax benefit (expense) 28,747 (97 ) 680 34 — 29,364 Net current period OCI - net of tax (360,170 ) 3,616 (2,432 ) (189 ) (48 ) (359,223 ) Reclassification due to the adoption of ASU 2016-01 (2) $ (221,856 ) $ — $ — $ — $ — $ (221,856 ) Reclassification due to the adoption of ASU 2018-02 $ 6,357 $ — $ (216 ) $ (2,238 ) $ — $ 3,903 Balance, end of period, net of tax $ 294,809 $ (39,911 ) $ 80,394 $ (24,783 ) $ 1,746 $ 312,255 Three Months Ended March 31, 2017 (U.S. dollars in thousands) Balance, beginning of period, net of tax $ 730,429 $ (50,952 ) $ 58,970 $ (24,887 ) $ 1,986 $ 715,546 OCI before reclassifications 149,959 — 39,204 (341 ) — 188,822 Amounts reclassified from AOCI (52,554 ) 1,455 — — (48 ) (51,147 ) Tax benefit (expense) (10,952 ) (13 ) 2,734 (16 ) — (8,247 ) Net current period OCI - net of tax 86,453 1,442 41,938 (357 ) (48 ) 129,428 Balance, end of period, net of tax $ 816,882 $ (49,510 ) $ 100,908 $ (25,244 ) $ 1,938 $ 844,974 ____________ (1) For certain annuity contracts that are subject to the GreyCastle Life Retro Arrangements, future policy benefit reserves were historically increased for the impact of changes in unrealized gains on investments supporting such contracts as if the gains had been realized, with a corresponding entry to other comprehensive income ("Shadow Adjustments"). Upon completion of the GreyCastle Life Retro Arrangements, no further Shadow Adjustments were recorded. At December 31, 2017, the cumulative impact of the Shadow Adjustments was $184.9 million . During the three months ended March 31, 2018 , net movements of $(4.2) million were recorded, resulting in a total cumulative net impact of Shadow Adjustments on future policy benefit reserves of $180.8 million at March 31, 2018 . (2) The reclassification out of AOCI due to the adoption of ASU 2016-01 includes $233.8 million of net unrealized gains less $11.9 million of deferred tax on net unrealized gains as discussed in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements ." The reclassifications out of AOCI along with the associated Unaudited Consolidated Statements of Income line items affected by component, and the total related tax (expense) benefit for the three months ended March 31, 2018 and 2017 are as follows: Gross Amount Reclassified From AOCI Details About AOCI Components - Affected Line Items in the Unaudited Consolidated Statements of Income (U.S. dollars in thousands) Three months ended March 31, 2018 Three months ended March 31, 2017 Unrealized gains and losses on investments: Net realized gains (losses) on investments AFS $ 17,762 $ (47,020 ) OTTI 2,848 6,874 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets (9,735 ) (12,408 ) Income (loss) from investment affiliates — — Total before tax $ 10,875 $ (52,554 ) Provision (benefit) for income tax (2,002 ) (474 ) Net of tax $ 8,873 $ (53,028 ) OTTI losses recognized in OCI: Net realized gains (losses) on investments AFS $ 3,552 $ 1,455 OTTI transferred to (from) OCI 161 — Total before tax $ 3,713 $ 1,455 Provision (benefit) for income tax (97 ) (13 ) Net of tax $ 3,616 $ 1,442 Gains and losses on cash flow hedges: Interest Expense $ (48 ) $ (48 ) Provision (benefit) for income tax — — Net of tax $ (48 ) $ (48 ) Total reclassifications for the period, gross of tax $ 14,540 $ (51,147 ) Tax benefit (expense) (2,099 ) (487 ) Total reclassifications for the period, net of tax $ 12,441 $ (51,634 ) |
Guarantor Financial Information
Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Information | Guarantor Financial Information The following tables present condensed consolidating balance sheets at March 31, 2018 and December 31, 2017 , condensed consolidating statements of income and comprehensive income for the three months ended March 31, 2018 and 2017 and condensed consolidating statements of cash flows for the three months ended March 31, 2018 and 2017 for XL Group, XLIT, a 100% owned subsidiary of XL Group, and XL Group's other subsidiaries (excluding XL Group plc ("XL-Ireland")), which are all 100% directly or indirectly owned subsidiaries of XLIT. For purposes of this disclosure, the results of XL-Ireland, which is currently in liquidation proceedings and whose assets are otherwise immaterial, at March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017 have been included within the results of XL Group. March 31, 2018 Condensed Consolidating Balance Sheet (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Fixed maturities AFS $ — $ 449,368 $ 30,207,260 $ — $ 30,656,628 Short-term investments AFS — — 500,170 — 500,170 Fixed maturities trading — — 2,084,251 — 2,084,251 Short-term investments trading — — 7,425 — 7,425 Equity securities — — 637,872 — 637,872 Investments in affiliates — — 1,900,105 — 1,900,105 Other investments — — 1,186,983 — 1,186,983 Total investments $ — $ 449,368 $ 36,524,066 $ — $ 36,973,434 Cash and cash equivalents 20,360 233,948 3,230,455 — 3,484,763 Restricted cash — — 155,023 — 155,023 Investments in subsidiaries 9,632,524 13,277,715 — (22,910,239 ) — Accrued investment income 11 2,133 263,557 — 265,701 Deferred acquisition costs and value of business acquired — — 1,317,797 — 1,317,797 Ceded unearned premiums — — 2,950,077 — 2,950,077 Premiums receivable — — 7,988,469 — 7,988,469 Reinsurance balances receivable — — 1,210,620 — 1,210,620 Unpaid losses and loss expenses recoverable — — 7,271,013 — 7,271,013 Receivable from investments sold — 15,000 243,084 — 258,084 Goodwill and other intangible assets — — 2,230,506 — 2,230,506 Deferred tax asset — — 356,667 — 356,667 Amounts due from subsidiaries/parent 57,632 — 70,582 (128,214 ) — Other assets 1,916 27,611 846,282 — 875,809 Total assets $ 9,712,443 $ 14,005,775 $ 64,658,198 $ (23,038,453 ) $ 65,337,963 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 29,701,568 $ — $ 29,701,568 Deposit liabilities — — 982,963 — 982,963 Future policy benefit reserves — — 3,680,958 — 3,680,958 Funds withheld on GreyCastle life retrocession arrangements — — 989,140 — 989,140 Unearned premiums — — 9,687,293 — 9,687,293 Notes payable and debt — 3,240,461 — — 3,240,461 Reinsurance balances payable — — 4,432,331 — 4,432,331 Payable for investments purchased — — 317,339 — 317,339 Deferred tax liability — 1,949 56,046 — 57,995 Amounts due to subsidiaries/parent — 122,328 5,886 (128,214 ) — Other liabilities 83,914 51,592 877,187 — 1,012,693 Total liabilities $ 83,914 $ 3,416,330 $ 50,730,711 $ (128,214 ) $ 54,102,741 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 9,628,529 $ 9,632,524 $ 13,277,715 $ (22,910,239 ) $ 9,628,529 Non-controlling interest in equity of consolidated subsidiaries — 956,921 649,772 — 1,606,693 Total shareholders' equity $ 9,628,529 $ 10,589,445 $ 13,927,487 $ (22,910,239 ) $ 11,235,222 Total liabilities and shareholders' equity $ 9,712,443 $ 14,005,775 $ 64,658,198 $ (23,038,453 ) $ 65,337,963 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. December 31, 2017 Condensed Consolidating Balance Sheet (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Fixed maturities AFS $ — $ 528,152 $ 30,400,836 $ — $ 30,928,988 Short-term investments AFS — — 815,481 — 815,481 Fixed maturities trading — — 2,006,385 — 2,006,385 Short-term investments trading — — 14,965 — 14,965 Equity securities — — 713,967 — 713,967 Investments in affiliates — — 1,911,996 — 1,911,996 Other investments — — 1,163,863 — 1,163,863 Total investments $ — $ 528,152 $ 37,027,493 $ — $ 37,555,645 Cash and cash equivalents 3,950 158,688 3,273,316 — 3,435,954 Restricted cash — — 157,497 — 157,497 Investments in subsidiaries 9,817,979 13,379,083 — (23,197,062 ) — Accrued investment income 11 2,436 269,702 — 272,149 Deferred acquisition costs and value of business acquired — — 1,102,474 — 1,102,474 Ceded unearned premiums — — 2,198,217 — 2,198,217 Premiums receivable — — 6,934,482 — 6,934,482 Reinsurance balances receivable — — 930,114 — 930,114 Unpaid losses and loss expenses recoverable — — 7,247,723 — 7,247,723 Receivable from investments sold — — 201,515 — 201,515 Goodwill and other intangible assets — — 2,225,751 — 2,225,751 Deferred tax asset — — 332,024 — 332,024 Amounts due from subsidiaries/parent 32,301 — 61,976 (94,277 ) — Other assets 14,541 27,244 800,906 — 842,691 Total assets $ 9,868,782 $ 14,095,603 $ 62,763,190 $ (23,291,339 ) $ 63,436,236 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 29,696,779 $ — $ 29,696,779 Deposit liabilities — — 1,042,677 — 1,042,677 Future policy benefit reserves — — 3,610,926 — 3,610,926 Funds withheld on GreyCastle life retrocession arrangements — — 999,219 — 999,219 Unearned premiums — — 8,307,431 — 8,307,431 Notes payable and debt — 3,220,769 — — 3,220,769 Reinsurance balances payable — — 3,706,116 — 3,706,116 Payable for investments purchased — 848 332,141 — 332,989 Deferred tax liability — — 57,574 — 57,574 Amounts due to subsidiaries/parent — 62,111 32,166 (94,277 ) — Other liabilities 20,465 36,975 942,996 — 1,000,436 Total liabilities $ 20,465 $ 3,320,703 $ 48,728,025 $ (94,277 ) $ 51,974,916 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 9,848,317 $ 9,817,979 $ 13,379,083 $ (23,197,062 ) $ 9,848,317 Non-controlling interest in equity of consolidated subsidiaries — 956,921 656,082 — 1,613,003 Total shareholders' equity $ 9,848,317 $ 10,774,900 $ 14,035,165 $ (23,197,062 ) $ 11,461,320 Total liabilities and shareholders' equity $ 9,868,782 $ 14,095,603 $ 62,763,190 $ (23,291,339 ) $ 63,436,236 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. . Three Months Ended March 31, 2018 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 2,600,288 $ — $ 2,600,288 Total net investment income 8 3,287 215,186 — 218,481 Total realized investment gains (losses) — (1,586 ) (81,769 ) — (83,355 ) Net realized and unrealized gains (losses) on derivative instruments — — 4,221 — 4,221 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — 22,921 — 22,921 Income (loss) from investment affiliates — — 45,669 — 45,669 Fee income and other 4 — 6,713 — 6,717 Total revenues $ 12 $ 1,701 $ 2,813,229 $ — $ 2,814,942 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,622,006 $ — $ 1,622,006 Claims and policy benefits — — 10,307 — 10,307 Acquisition costs — — 463,827 — 463,827 Operating expenses 30,862 842 440,859 — 472,563 Foreign exchange (gains) losses 1,270 510 8,061 — 9,841 Interest expense — 40,039 13,506 — 53,545 Total expenses $ 32,132 $ 41,391 $ 2,558,566 $ — $ 2,632,089 Income (loss) before income tax and income (loss) from operating affiliates $ (32,120 ) $ (39,690 ) $ 254,663 $ — $ 182,853 Income (loss) from operating affiliates — — 10,282 — 10,282 Equity in net earnings (losses) of subsidiaries 184,768 234,278 — (419,046 ) — Provision (benefit) for income tax — — 31,902 — 31,902 Net income (loss) $ 152,648 $ 194,588 $ 233,043 $ (419,046 ) $ 161,233 Non-controlling interests — 9,820 (1,235 ) — 8,585 Net income (loss) attributable to common shareholders $ 152,648 $ 184,768 $ 234,278 $ (419,046 ) $ 152,648 Comprehensive income (loss) $ (206,575 ) $ (174,455 ) $ (124,945 ) $ 299,400 $ (206,575 ) ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. Three Months Ended March 31, 2017 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 2,522,791 $ — $ 2,522,791 Total net investment income 83 2,313 198,219 (83 ) 200,532 Total realized investment gains (losses) — (777 ) 38,063 — 37,286 Net realized and unrealized gains (losses) on derivative instruments — — (7,069 ) — (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (50,101 ) — (50,101 ) Income (loss) from investment affiliates — — 38,261 — 38,261 Fee income and other — — 13,661 — 13,661 Total revenues $ 83 $ 1,536 $ 2,753,825 $ (83 ) $ 2,755,361 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,583,456 $ — $ 1,583,456 Claims and policy benefits — — 7,291 — 7,291 Acquisition costs — — 435,869 — 435,869 Operating expenses 16,180 509 451,349 — 468,038 Foreign exchange (gains) losses 176 1 (3,513 ) — (3,336 ) Interest expense — 35,147 15,564 — 50,711 Total expenses $ 16,356 $ 35,657 $ 2,490,016 $ — $ 2,542,029 Income (loss) before income tax and income (loss) from operating affiliates $ (16,273 ) $ (34,121 ) $ 263,809 $ (83 ) $ 213,332 Income (loss) from operating affiliates — — 13,609 — 13,609 Equity in net earnings (losses) of subsidiaries 169,116 239,526 — (408,642 ) — Provision (benefit) for income tax — — 13,092 — 13,092 Net income (loss) $ 152,843 $ 205,405 $ 264,326 $ (408,725 ) $ 213,849 Non-controlling interests — 36,289 24,800 (83 ) 61,006 Net income (loss) attributable to common shareholders $ 152,843 $ 169,116 $ 239,526 $ (408,642 ) $ 152,843 Comprehensive income (loss) $ 282,271 $ 298,544 $ 368,954 $ (667,498 ) $ 282,271 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. Three Months Ended March 31, 2018 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ (39,431 ) $ 38,440 $ (237,133 ) $ — $ (238,124 ) Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 127,615 $ 4,241,584 $ — $ 4,369,199 Proceeds from redemption of fixed maturities and short-term investments — 37,790 663,614 — 701,404 Proceeds from sale of equity securities — — 78,716 — 78,716 Purchases of fixed maturities and short-term investments — (107,765 ) (4,809,426 ) — (4,917,191 ) Purchases of equity securities — — (33,230 ) — (33,230 ) Proceeds from sale of affiliates — — 244,340 — 244,340 Purchases of affiliates — — (76,014 ) — (76,014 ) Returns of capital from subsidiaries 11,000 — — (11,000 ) — Other, net — — (26,782 ) (26,782 ) Net cash provided by (used in) investing activities $ 11,000 $ 57,640 $ 282,802 $ (11,000 ) $ 340,442 Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 46,504 $ — $ — $ — $ 46,504 Buybacks of common shares (1,663 ) — — — (1,663 ) Employee withholding on share-based compensation — — (16,696 ) — (16,696 ) Return of capital — (11,000 ) — 11,000 — Distributions to non-controlling interests — (9,820 ) (6,126 ) — (15,946 ) Contributions from non-controlling interests — — 439 — 439 Contingent consideration paid on business combination — — (5,000 ) — (5,000 ) Deposit liabilities — — (71,124 ) — (71,124 ) Net cash provided by (used in) financing activities $ 44,841 $ (20,820 ) $ (98,507 ) $ 11,000 $ (63,486 ) Effects of exchange rate changes on foreign currency cash — — 7,503 — 7,503 Increase (decrease) in cash, cash equivalents and restricted cash $ 16,410 $ 75,260 $ (45,335 ) $ — $ 46,335 Cash, cash equivalents and restricted cash - beginning of year 3,950 158,688 3,430,813 — 3,593,451 Cash, cash equivalents and restricted cash - end of period $ 20,360 $ 233,948 $ 3,385,478 $ — $ 3,639,786 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. Three Months Ended March 31, 2017 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ 235,642 $ 118,694 $ (1,833 ) $ (400,000 ) $ (47,497 ) Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 547 $ 2,491,458 $ — $ 2,492,005 Proceeds from redemption of fixed maturities and short-term investments — 44,453 1,183,903 — 1,228,356 Proceeds from sale of equity securities — 677 45,702 — 46,379 Purchases of fixed maturities and short-term investments — (3,098 ) (3,629,909 ) — (3,633,007 ) Purchases of equity securities — — (47,967 ) — (47,967 ) Proceeds from sale of affiliates — — 168,237 — 168,237 Purchases of affiliates — — (35,926 ) — (35,926 ) Other, net — — 23,429 — 23,429 Net cash provided by (used in) investing activities $ — $ 42,579 $ 198,927 $ — $ 241,506 Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 23,296 $ — $ — $ — $ 23,296 Buybacks of common shares (200,488 ) — — — (200,488 ) Employee withholding on share-based compensation — — (22,871 ) — (22,871 ) Dividends paid on common shares (58,392 ) — (400,000 ) 400,000 (58,392 ) Distributions to non-controlling interests — (3,701 ) (21,699 ) — (25,400 ) Contributions from non-controlling interests — — 26 — 26 Deposit liabilities — — (7,771 ) — (7,771 ) Net cash provided by (used in) financing activities $ (235,584 ) $ (3,701 ) $ (452,315 ) $ 400,000 $ (291,600 ) Effects of exchange rate changes on foreign currency cash — — 30,273 — 30,273 Increase (decrease) in cash, cash equivalents and restricted cash $ 58 $ 157,572 $ (224,948 ) $ — $ (67,318 ) Cash, cash equivalents and restricted cash - beginning of year 1,022 84,286 3,495,184 — 3,580,492 Cash, cash equivalents and restricted cash - end of period $ 1,080 $ 241,858 $ 3,270,236 $ — $ 3,513,174 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Significant Accounting Polici24
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of accounting | Basis of Preparation and Consolidation Unless the context otherwise indicates, references herein to the "Company" include the accounts of XL Group Ltd, a Bermuda exempted company ("XL Group"), together with its consolidated subsidiaries. These Unaudited Consolidated Financial Statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In addition, the year-end balance sheet data was derived from audited financial statements but do not include all disclosures required by GAAP. In the opinion of management, these unaudited financial statements reflect all adjustments considered necessary for a fair statement of financial position and results of operations at the end of and for the periods presented. The results of operations for any interim period are not necessarily indicative of the results for a full year. All inter-company accounts and transactions have been eliminated. 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, the disclosure about contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. For further information, see Item 8, Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . In May 2014, the Company ceded the majority of its life reinsurance business to GreyCastle Life Reinsurance ("GCLR") via 100% quota share reinsurance (the "GreyCastle Life Retro Arrangements"). Under the terms of the transaction, the Company continues to own, on a funds withheld basis, assets supporting the GreyCastle Life Retro Arrangements consisting of cash, fixed maturity securities and accrued interest (the "Life Funds Withheld Assets"). The Life Funds Withheld Assets are managed pursuant to agreed investment guidelines that meet the contractual commitments of the XL ceding companies and applicable laws and regulations. All of the investment results associated with the Life Funds Withheld Assets ultimately accrue to GCLR. Because the Company no longer shares in the risks and rewards of the underlying performance of the supporting invested assets, disclosures within the financial statement notes included herein separate the Life Funds Withheld Assets from the rest of the Company's investments. For further information, see Item 8, Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . To facilitate period-to-period comparisons, certain reclassifications have been made to prior period consolidated financial statement amounts to conform to current period presentation. |
Recent accounting pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted in 2018 ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued an accounting standards update concerning the accounting for financial instruments. The guidance retains the basic existing framework for accounting for financial instruments under GAAP, while achieving limited convergence with IFRS in this area. The guidance: (1) requires equity investments (except consolidated entities and those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income; (2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (3) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for non-public business entities; (4) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet; (5) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (6) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial statements; (7) requires separate presentation of financial assets and financial liabilities by measurement category and form of asset in the financial statements; and (8) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to AFS securities in combination with the entity's other deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption is required to be applied by means of a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, except the amendments related to impairment of equity securities without readily determinable fair values. The Company adopted this guidance as of January 1, 2018. As of that date, accumulated unrealized gains and losses relating to investments in equity securities and certain of our other investments, net of tax, which were included in accumulated other comprehensive income, were reclassified to retained earnings. At January 1, 2018 the amount of the reclassification was a net unrealized gain of $233.8 million , less deferred tax of $11.9 million . Adoption of this update has an effect on results of operations going forward, as mark-to-market movements on equity securities now impact net income; however, it does not have a material impact on the Company's cash flows. ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued an accounting standards update concerning the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in this update are intended to address areas where GAAP is unclear and diversity in practice exists. The following areas are covered in this update: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments; (3) contingent consideration payments following a business combination; (4) proceeds from settlement of insurance claims; (5) proceeds from settlement of corporate-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separation of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance as of January 1, 2018 using the retrospective transition method required by these amendments. As required in adopting this standard, the Company made a formal accounting policy election regarding classification of distributions received from equity method investees, choosing to use the Nature of Distribution approach. This approach is consistent with historical practice utilized by the Company in classifying these distributions. Overall, adoption of the guidance did not have a material impact on the Company's cash flows, and had no impact on the Company's financial position or results of operations. ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued an accounting standards update concerning the tax effects of intra-entity asset transfers within a group. The guidance requires an entity to reflect the income tax consequences of an intra-entity transfer of an asset other than inventory when that transfer occurs. This is a departure from previous GAAP, which prohibited recognition of tax on such transfers until the asset had been sold to an external party or otherwise realized. The amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. The amendments are required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance as of January 1, 2018. This guidance did not have a material impact on the Company's financial condition, results of operations, or cash flows. ASU 2016-18, Statement of Cash Flows: Restricted Cash In November 2016, the FASB issued an accounting standards update concerning the presentation of restricted cash within the statement of cash flows. Previous GAAP did not provide guidance on the presentation or classification of movements in restricted cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included as a component of cash and cash equivalents when reconciling beginning-of-period and end-of-period totals within the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The guidance is required to be applied retrospectively to all periods presented in the statements of cash flows. The Company adopted this guidance as of January 1, 2018. As result, the net amount of the change in the restricted cash balances during each reporting period is no longer being presented as a discrete line item "Change in restricted cash" within investing cash flows for each applicable period, as was previously reported in the Company's Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2017 . This guidance did not have an impact on the Company's financial position or results of operations. ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued an accounting standards update concerning the presentation of costs related to defined benefit pension plans and similar plans. The amendments in this ASU principally require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by relevant employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in the update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments relating to presentation in the income statement are required to be applied retrospectively. Disclosures of the nature of and reason for the change in accounting principle are required in the first interim and annual periods of adoption. The Company adopted this guidance as of January 1, 2018. The impact of this guidance on the Company is disclosure-related only, and it does not have an impact on the Company's financial position, results of operations or cash flows. As the impact of adopting this standard is not material, updated disclosure on the Company's defined benefit pension plans has not been provided for the current quarterly period. For the Company’s most recent disclosures, see Item 8, Note 17, "Retirement Plans " to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued an accounting standards update concerning the stranded tax effects resulting from tax rate changes legislated by the U.S. Tax Cuts and Jobs Act. Under GAAP, the effects of all changes in tax rates on deferred tax balances are reflected in income, even if the tax balances relate to items of accumulated other comprehensive income. This update permits companies to make an election to reclassify from accumulated other comprehensive income to retained earnings such stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. Certain disclosures are also required by the update. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those financial years. For public business entities, early adoption is permitted, including adoption in any interim period for reporting periods for which financial statements have not yet been issued. The amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. Tax Cuts and Jobs Act is recognized. The Company early-adopted this guidance by making the permitted election in the first quarter of 2018, recognizing a reclassification of $3.9 million from accumulated other comprehensive income to retained earnings in the period of adoption. I n general, in accounting for the release of income tax effects from accumulated other comprehensive income, the Company applies the individual item approach with respect to available-for-sale debt securities, and the portfolio approach with respect to pension, postretirement benefit plan obligations and currency translation matters. ASU 2018-05, Income Taxes: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In March 2018, the FASB issued an accounting standards update concerning the income tax accounting implications of the U.S. Tax Cuts and Jobs Act. The update codifies SEC-related material within the Accounting Standards Codification pursuant to the issuance of SEC Staff Accounting Bulletin No. 118 (‘SAB 118’). SAB 118 provided clarifying guidance for how a public business entity should address the situation in which the accounting for certain income tax effects of the U.S. Tax Cuts and Jobs Act was not completed by the time financial statements were issued for the reporting period in which the legislation was enacted. In such circumstances, the incomplete effects are reported when a reasonable estimate can be determined, based on that estimate. Provisional amounts can be updated during a measurement period not exceeding one year. Disclosures concerning any incomplete effects and adjustments are required. The Company complied with the requirements of SAB 118 in its Form 10-K for the year ended December 31, 2017 and no further changes were required to comply with this update when adopted in the three months ended March 31, 2018. During the three months ended March 31, 2018, there were no changes to any outstanding items as reported in Item 8, Note 23, "Taxation" to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting, by segment | The following tables summarize the segment results for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 (U.S. dollars in thousands) Insurance Reinsurance Total P&C Corporate and Other (1) Total Gross premiums written $ 2,866,539 $ 2,060,601 $ 4,927,140 $ 52,595 $ 4,979,735 Net premiums written 1,481,867 1,670,744 3,152,611 3,107 3,155,718 Net premiums earned 1,665,789 931,392 2,597,181 3,107 2,600,288 Less: Net losses and loss expenses (2) 1,064,992 557,014 1,622,006 10,307 1,632,313 Less: Acquisition costs 221,962 240,854 462,816 1,011 463,827 Less: Operating expenses (3) 316,380 73,539 389,919 141 390,060 Underwriting profit (loss) $ 62,455 $ 59,985 $ 122,440 $ (8,352 ) $ 114,088 Net investment income - excluding Life Funds Withheld Assets (4) 168,253 7,519 175,772 Net investment income - Life Funds Withheld Assets 30,398 30,398 Net results from structured products (5) 2,103 1,308 3,411 — 3,411 Net fee income and other (6) (6,703 ) 892 (5,811 ) 69 (5,742 ) Net realized investment gains (losses) - excluding Life Funds Withheld Assets (60,957 ) 114 (60,843 ) Net realized investment gains (losses) - Life Funds Withheld Assets — (22,512 ) (22,512 ) Net realized and unrealized gains (losses) on derivative instruments — 4,221 4,221 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — 22,921 22,921 Net income (loss) from investment affiliates and operating affiliates — 55,951 55,951 Less: Foreign exchange (gains) losses — 9,841 9,841 Less: Corporate operating expenses — 70,043 70,043 Contribution from P&C and Corporate and Other 227,336 10,445 237,781 Less: Interest expense (7) 44,646 44,646 Less: Income tax expense 31,902 31,902 Less: Non-controlling interests 8,585 8,585 Net income (loss) attributable to common shareholders $ 152,648 Ratios – P&C operations: (8) Loss and loss expense ratio 63.9 % 59.8 % 62.5 % Underwriting expense ratio 32.4 % 33.8 % 32.8 % Combined ratio 96.3 % 93.6 % 95.3 % ____________ (1) Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. (2) The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. (3) Operating expenses of the segments exclude Corporate operating expenses, shown separately. (4) Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products. (5) The net results from P&C structured products include net investment income and interest expense of $12.3 million and $8.9 million , respectively. (6) Net fee income and other includes operating expenses of $12.5 million from the Company's loss prevention consulting services business. (7) Interest expense excludes interest expense related to structured products recorded in the Insurance and Reinsurance segments. (8) Ratios are based on net premiums earned from P&C operations. Three Months Ended March 31, 2017 (U.S. dollars in thousands) Insurance Reinsurance Total P&C Corporate Total Gross premiums written $ 2,694,216 $ 1,927,390 $ 4,621,606 $ 56,811 $ 4,678,417 Net premiums written 1,508,591 1,471,169 2,979,760 3,310 2,983,070 Net premiums earned 1,635,315 884,166 2,519,481 3,310 2,522,791 Less: Net losses and loss expenses (2) 1,060,363 523,093 1,583,456 7,291 1,590,747 Less: Acquisition costs (2) 210,483 224,079 434,562 1,307 435,869 Less: Operating expenses (3) 285,729 71,757 357,486 233 357,719 Underwriting profit (loss) $ 78,740 $ 65,237 $ 143,977 $ (5,521 ) $ 138,456 Net investment income - excluding Life Funds Withheld Assets (4) 146,566 7,227 153,793 Net investment income - Life Funds Withheld Assets 33,364 33,364 Net results from structured products (5) 2,269 645 2,914 — 2,914 Net fee income and other (6) 1,967 686 2,653 (438 ) 2,215 Net realized investment gains (losses) - excluding Life Funds Withheld Assets 4,831 (613 ) 4,218 Net realized investment gains (losses) - Life Funds Withheld Assets — 33,068 33,068 Net realized and unrealized gains (losses) on derivative instruments — (7,069 ) (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — (50,101 ) (50,101 ) Net income (loss) from investment affiliates and operating affiliates — 51,870 51,870 Less: Foreign exchange (gains) losses — (3,336 ) (3,336 ) Less: Corporate operating expenses — 98,873 98,873 Contribution from P&C and Corporate and Other 300,941 (33,750 ) 267,191 Less: Interest expense (7) 40,250 40,250 Less: Income tax expense 13,092 13,092 Less: Non-controlling interests 61,006 61,006 Net income (loss) attributable to common shareholders $ 152,843 Ratios – P&C operations: (8) Loss and loss expense ratio 64.8 % 59.2 % 62.8 % Underwriting expense ratio 30.4 % 33.4 % 31.5 % Combined ratio 95.2 % 92.6 % 94.3 % ____________ (1) Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. (2) The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments. (3) Operating expenses of the segments exclude Corporate operating expenses, shown separately. (4) Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products. (5) The net results from P&C structured products include net investment income and interest expense of $13.4 million and $10.5 million , respectively. (6) Net fee income and other includes operating expenses of $11.4 million from the Company's loss prevention consulting services business. (7) Interest expense excludes interest expense related to structured products recorded in the Insurance and Reinsurance segments. (8) Ratios are based on net premiums earned from P&C operations. |
Schedule of net premiums earned by line of business | The following tables summarize the Company's net premiums earned by product type for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 (U.S. dollars in thousands) Insurance Reinsurance Corporate Total P&C Operations: Professional $ 320,717 $ 64,608 $ — $ 385,325 Casualty 481,010 149,963 — 630,973 Property catastrophe — 136,503 — 136,503 Property 406,778 258,089 — 664,867 Specialty 457,650 44,261 — 501,911 Other (1) (366 ) 277,968 — 277,602 Total P&C Operations $ 1,665,789 $ 931,392 $ — $ 2,597,181 Corporate and Other: Run-off Life operations - Other Life — — 3,107 3,107 Total Corporate and Other $ — $ — $ 3,107 $ 3,107 Total $ 1,665,789 $ 931,392 $ 3,107 $ 2,600,288 Three Months Ended March 31, 2017 (U.S. dollars in thousands) Insurance (2) Reinsurance Corporate Total P&C Operations: Professional $ 305,482 $ 52,926 $ — $ 358,408 Casualty 474,195 156,634 — 630,829 Property catastrophe — 148,406 — 148,406 Property 450,503 272,346 — 722,849 Specialty 402,687 36,626 — 439,313 Other (1) 2,448 217,228 — 219,676 Total P&C Operations $ 1,635,315 $ 884,166 $ — $ 2,519,481 Corporate and Other: Run-off Life operations - Other Life — — 3,310 3,310 Total Corporate and Other $ — $ — $ 3,310 $ 3,310 Total $ 1,635,315 $ 884,166 $ 3,310 $ 2,522,791 ____________ (1) Other within the Insurance segment includes: surety and certain discontinued lines. Other within the Reinsurance segment includes multiline, whole account contracts, credit and surety, accident and health and other lines. (2) Amounts from the prior year have been re-presented to reflect current mapping of underlying lines of business to be consistent with the manner in which they are reflected in the current period. The most significant movements include movements out of Other are in the Insurance segment, and include: livestock business into Specialty; and credit surety into Casualty. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost and fair value summary | The cost (amortized cost for fixed maturities and short-term investments), fair value, gross unrealized gains and gross unrealized (losses), including non-credit related OTTI recorded in accumulated other comprehensive income ("AOCI"), of the Company's investments AFS at March 31, 2018 and December 31, 2017 were as follows: Included in AOCI March 31, 2018 (U.S. dollars in thousands) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit Related OTTI (1) Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government and Government Agencies ("U.S. Government") $ 4,207,380 $ 29,290 $ (48,711 ) $ 4,187,959 $ — U.S. States, municipalities and political subdivisions 1,953,202 63,586 (3,626 ) 2,013,162 — Non-U.S. Governments 5,260,650 98,496 (52,495 ) 5,306,651 — Corporate 9,759,732 131,175 (148,237 ) 9,742,670 — Residential mortgage-backed securities ("RMBS") 4,606,275 26,883 (103,435 ) 4,529,723 (8,434 ) Commercial mortgage-backed securities ("CMBS") 1,292,559 2,263 (35,303 ) 1,259,519 (736 ) Other asset-backed securities 1,588,637 26,172 (6,413 ) 1,608,396 (30,764 ) Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,668,435 $ 377,865 $ (398,220 ) $ 28,648,080 $ (39,934 ) Total short-term investments - Excluding Life Funds Withheld Assets 500,844 773 (1,447 ) 500,170 — Total investments - AFS - Excluding Life Funds Withheld Assets $ 29,169,279 $ 378,638 $ (399,667 ) $ 29,148,250 $ (39,934 ) Fixed maturities - AFS - Life Funds Withheld Assets U.S. Government $ 9,420 $ 2,196 $ — $ 11,616 $ — Non-U.S. Governments 432,390 152,016 — 584,406 — Corporate 919,151 202,052 — 1,121,203 — RMBS 455 48 — 503 — CMBS 105,505 24,565 — 130,070 — Other asset-backed securities 132,990 27,760 — 160,750 — Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,599,911 $ 408,637 $ — $ 2,008,548 $ — Total investments - AFS $ 30,769,190 $ 787,275 $ (399,667 ) $ 31,156,798 $ (39,934 ) ____________ (1) Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. Included in AOCI December 31, 2017 (U.S. dollars in thousands) Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit Related OTTI (1) Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ 4,358,503 $ 37,782 $ (33,545 ) $ 4,362,740 $ — U.S. States, municipalities and political subdivisions 1,977,796 87,832 (988 ) 2,064,640 — Non-U.S. Governments 5,135,526 114,918 (48,863 ) 5,201,581 — Corporate 9,644,799 207,668 (57,334 ) 9,795,133 (18 ) RMBS 4,717,542 41,983 (35,123 ) 4,724,402 (8,795 ) CMBS 1,246,406 7,468 (9,857 ) 1,244,017 (817 ) Other asset-backed securities 1,488,958 26,877 (6,472 ) 1,509,363 (34,016 ) Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,569,530 $ 524,528 $ (192,182 ) $ 28,901,876 $ (43,646 ) Total short-term investments - Excluding Life Funds Withheld Assets 816,638 744 (1,901 ) 815,481 — Total equity securities - Excluding Life Funds Withheld Assets 638,455 80,679 (5,167 ) 713,967 — Total investments - AFS - Excluding Life Funds Withheld Assets $ 30,024,623 $ 605,951 $ (199,250 ) $ 30,431,324 $ (43,646 ) Fixed maturities - AFS - Life Funds Withheld Assets U.S. Government $ 9,050 $ 2,266 $ — $ 11,316 $ — Non-U.S. Governments 433,664 150,870 — 584,534 — Corporate 909,589 227,624 — 1,137,213 — RMBS 448 67 — 515 — CMBS 97,356 24,916 — 122,272 — Other asset-backed securities 137,944 33,318 — 171,262 — Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,588,051 $ 439,061 $ — $ 2,027,112 $ — Total investments - AFS $ 31,612,674 $ 1,045,012 $ (199,250 ) $ 32,458,436 $ (43,646 ) ____________ (1) Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. The amortized cost and fair value of trading investments at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 (U.S. dollars in thousands) Amortized Fair Value Fixed maturities trading - Life Funds Withheld Assets U.S. Government $ 9,729 $ 9,320 Non-U.S. Governments 485,495 497,108 Corporate 1,507,879 1,525,761 RMBS 1,023 893 CMBS 7,358 7,472 Other asset-backed securities 44,238 43,697 Total fixed maturities trading - Life Funds Withheld Assets $ 2,055,722 $ 2,084,251 Total short-term investments trading - Life Funds Withheld Assets $ 7,428 $ 7,425 Total investments trading - Life Funds Withheld Assets $ 2,063,150 $ 2,091,676 December 31, 2017 (U.S. dollars in thousands) Amortized Fair Value Fixed maturities trading - Life Funds Withheld Assets U.S. Government $ 11,640 $ 11,042 U.S. States, municipalities and political subdivisions 30 31 Non-U.S. Governments 473,849 485,171 Corporate 1,412,846 1,460,292 RMBS 1,020 932 CMBS 7,345 7,580 Other asset-backed securities 39,771 41,337 Total fixed maturities trading - Life Funds Withheld Assets $ 1,946,501 $ 2,006,385 Total short-term investments trading - Life Funds Withheld Assets $ 14,969 $ 14,965 Total investments trading - Life Funds Withheld Assets $ 1,961,470 $ 2,021,350 |
Contractual maturities summary | The contractual maturities of AFS fixed maturity securities at March 31, 2018 and December 31, 2017 are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Fixed maturities - AFS - Excluding Life Funds Withheld Assets Due less than one year $ 1,716,039 $ 1,717,129 $ 1,556,688 $ 1,564,360 Due after 1 through 5 years 12,520,942 12,501,887 12,243,590 12,309,732 Due after 5 through 10 years 5,882,207 5,876,041 6,268,217 6,362,314 Due after 10 years 1,061,776 1,155,385 1,048,129 1,187,688 $ 21,180,964 $ 21,250,442 $ 21,116,624 $ 21,424,094 RMBS 4,606,275 4,529,723 4,717,542 4,724,402 CMBS 1,292,559 1,259,519 1,246,406 1,244,017 Other asset-backed securities 1,588,637 1,608,396 1,488,958 1,509,363 Total mortgage and asset-backed securities $ 7,487,471 $ 7,397,638 $ 7,452,906 $ 7,477,782 Total fixed maturities - AFS - Excluding Life Funds Withheld Assets $ 28,668,435 $ 28,648,080 $ 28,569,530 $ 28,901,876 Fixed maturities - AFS - Life Funds Withheld Assets Due less than one year $ 66,237 $ 68,315 $ 47,143 $ 49,233 Due after 1 through 5 years 274,247 296,715 286,524 313,227 Due after 5 through 10 years 167,949 201,133 168,897 205,536 Due after 10 years 852,528 1,151,062 849,739 1,165,067 $ 1,360,961 $ 1,717,225 $ 1,352,303 $ 1,733,063 RMBS 455 503 448 515 CMBS 105,505 130,070 97,356 122,272 Other asset-backed securities 132,990 160,750 137,944 171,262 Total mortgage and asset-backed securities $ 238,950 $ 291,323 $ 235,748 $ 294,049 Total fixed maturities - AFS - Life Funds Withheld Assets $ 1,599,911 $ 2,008,548 $ 1,588,051 $ 2,027,112 Total fixed maturities - AFS $ 30,268,346 $ 30,656,628 $ 30,157,581 $ 30,928,988 March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Fixed maturities trading - Life Funds Withheld Assets Due less than one year $ 66,532 $ 65,428 $ 59,962 $ 59,605 Due after 1 through 5 years 493,369 495,899 486,847 492,998 Due after 5 through 10 years 691,074 690,354 645,573 657,093 Due after 10 years 752,128 780,508 705,983 746,840 $ 2,003,103 $ 2,032,189 $ 1,898,365 $ 1,956,536 RMBS 1,023 893 1,020 932 CMBS 7,358 7,472 7,345 7,580 Other asset-backed securities 44,238 43,697 39,771 41,337 Total mortgage and asset-backed securities $ 52,619 $ 52,062 $ 48,136 $ 49,849 Total fixed maturities trading - Life Funds Withheld Assets $ 2,055,722 $ 2,084,251 $ 1,946,501 $ 2,006,385 |
Summary of unrealized losses | The following is an analysis of how long the AFS securities at March 31, 2018 and December 31, 2017 had been in a continual unrealized loss position: Less than 12 months Equal to or greater than 12 months March 31, 2018 (U.S. dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities and short-term investments - AFS U.S. Government $ 3,080,855 $ (38,758 ) $ 515,999 $ (11,350 ) U.S. States, municipalities and political subdivisions 278,946 (3,222 ) 15,869 (404 ) Non-U.S. Governments 2,061,869 (25,703 ) 487,103 (26,836 ) Corporate 5,509,770 (114,092 ) 510,757 (34,148 ) RMBS 2,973,309 (68,157 ) 846,423 (35,278 ) CMBS 991,765 (26,681 ) 131,116 (8,622 ) Other asset-backed securities 396,287 (2,502 ) 132,119 (3,914 ) Total fixed maturities and short-term investments - AFS $ 15,292,801 $ (279,115 ) $ 2,639,386 $ (120,552 ) Less than 12 months Equal to or greater than 12 months December 31, 2017 (U.S. dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities and short-term investments - AFS U.S. Government $ 2,687,083 $ (21,514 ) $ 727,246 $ (13,902 ) U.S. States, municipalities and political subdivisions 88,235 (622 ) 19,583 (366 ) Non-U.S. Governments 1,527,323 (14,959 ) 560,648 (33,931 ) Corporate 2,959,416 (25,757 ) 543,973 (31,577 ) RMBS 2,198,391 (14,030 ) 925,191 (21,093 ) CMBS 583,656 (4,117 ) 138,065 (5,740 ) Other asset-backed securities 256,823 (1,111 ) 175,146 (5,364 ) Total fixed maturities and short-term investments - AFS $ 10,300,927 $ (82,110 ) $ 3,089,852 $ (111,973 ) |
Analysis of net realized gains (losses) on investments | The following represents an analysis of net realized and unrealized gains (losses) on investments: Net Realized Investment Gains (Losses) Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Net realized gains (losses) on investments AFS - excluding Life Funds Withheld Assets: (1) Gross realized gains $ 19,330 $ 39,397 Gross realized losses (51,002 ) (28,305 ) OTTI, net of amounts transferred to other comprehensive income (1,806 ) (6,874 ) Total $ (33,478 ) $ 4,218 Net realized and change in net unrealized gains (losses) on equities securities - excluding Life Funds Withheld Assets: Gross realized gains $ 9,693 $ — Gross realized losses (126 ) — Change in net unrealized gains (losses) on equity securities (45,581 ) — Total $ (36,014 ) $ — Net realized and change in net unrealized gains (losses) on other investments - excluding Life Funds Withheld Assets: Gross realized gains $ 3,004 $ — Gross realized losses (1,163 ) — Change in net unrealized gains (losses) on other investments 6,808 — Total $ 8,649 $ — Net realized gains (losses) on investments and change in net unrealized gains (losses) on investments on trading securities - Life Funds Withheld Assets: Gross realized gains $ 12,909 $ 35,151 Gross realized losses (2,551 ) (677 ) OTTI, net of amounts transferred to other comprehensive income (1,203 ) — Change in net unrealized gains (losses) on trading securities $ (31,667 ) $ (1,406 ) Total $ (22,512 ) $ 33,068 Total realized investment gains (losses) $ (83,355 ) $ 37,286 ____________ (1) AFS in the prior year includes net realized gains (losses) on equity securities and other investments. Due to the implementation of ASU 2016-01, as described in in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements ," the net realized gains (losses) on these investments are shown separately. |
Schedule of other than temporary impairments | The components of OTTI charges for the three months ended March 31, 2018 and 2017 , as defined in Note 1(g), "Significant Accounting Policies - Other-Than-Temporary Impairments of Available for Sale ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 , for investments excluding Life Funds Withheld Assets were: Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Fixed maturities: Credit loss impairments $ 765 $ 226 Equities and other investments: Impaired more than 11 months or more than 50% — 4,975 Currency Losses 1,041 1,673 OTTI, net of amounts transferred to other comprehensive income $ 1,806 $ 6,874 |
Credit loss impairments on fixed inmcome securities rollforward | The following table sets forth the amount of credit loss impairments on fixed income securities, for which a portion of the OTTI loss was recognized in Other Comprehensive Income ("OCI"), held by the Company at the dates or for the periods indicated and the corresponding changes in such amounts: Credit Loss Impairments Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Opening balance at beginning of indicated period $ 43,332 $ 61,595 Credit loss impairment recognized in the current period on securities not previously impaired 590 124 Credit loss impairments previously recognized on securities that matured or were paid down, prepaid or sold during the period (1,156 ) (836 ) Additional credit loss impairments recognized in the current period on securities previously impaired 175 102 Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected (1,475 ) (2,357 ) Closing balance at end of indicated period $ 41,466 $ 58,628 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of location and gross amounts of derivative fair values | The following table summarizes information on the notional amounts and gross amounts of derivative fair values contained in the Unaudited Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Asset Derivative Notional Amount Asset Derivative Fair Value Liability Derivative Notional Amount Liability Derivative Fair Value Asset Derivative Notional Amount Asset Derivative Fair Value Liability Derivative Notional Amount Liability Derivative Fair Value Derivatives designated as hedging instruments: Foreign currency exposure $ 585,573 $ 15,155 $ 534,856 $ 15,025 $ 580,194 $ 5,655 $ 339,221 $ 3,968 Total derivatives designated as hedging instruments $ 585,573 $ 15,155 $ 534,856 $ 15,025 $ 580,194 $ 5,655 $ 339,221 $ 3,968 Derivatives not designated as hedging instruments: Investment Related Derivatives: Interest rate exposure $ — $ — $ 238,215 $ 726 $ 181,975 $ 423 $ — $ — Foreign currency exposure 33,070 313 336,055 3,674 263,722 6,931 141,300 2,256 Credit exposure 5,000 128 45,000 6,262 5,000 187 45,000 6,784 Financial market exposure — — 40,823 3,873 30,001 1,271 6,998 42 Other Non-Investment Derivatives: Credit exposure 20,242 334 — — — — 25,526 169 Guaranteed minimum income benefit contract 35,288 17,841 35,288 17,841 36,171 18,136 36,171 18,136 Modified coinsurance and funds withheld contracts, including life retrocession embedded derivative (1) 917,921 2,132 4,230,047 — 51,653 — 5,014,284 31,541 Other — — — — 16,000 191 — — Total derivatives not designated as hedging instruments $ 1,011,521 $ 20,748 $ 4,925,428 $ 32,376 $ 584,522 $ 27,139 $ 5,269,279 $ 58,928 Total derivatives $ 35,903 $ 47,401 $ 32,794 $ 62,896 Counterparty netting (7,239 ) (7,239 ) (3,579 ) (3,579 ) Total derivatives net of counterparty netting 28,664 40,162 29,215 59,317 Cash collateral held/paid (2) (6,060 ) (17,338 ) (3,920 ) (1,312 ) Total derivatives as recorded in the Unaudited Consolidated Balance Sheets $ 22,604 $ 22,824 $ 25,295 $ 58,005 ____________ (1) The fair value movements in derivative assets and liabilities relating to modified coinsurance and funds withheld contracts are included within the associated asset or liability at each period end on the face of the Unaudited Consolidated Balance Sheets. Notional amounts associated with reinsurance agreements under which the Company assumes reinsurance risk are recorded as asset derivative notional amounts. Notional amounts associated with the GreyCastle Life Retro Arrangements and other outward reinsurance contracts under which the Company cedes risk are recorded as liability derivative notional amounts. Included in the liability derivative notional amount at March 31, 2018 is the cumulative net realized and unrealized loss on the life retrocession embedded derivative of $1.1 billion . (2) At March 31, 2018 , the Company held cash collateral related to foreign currency derivative positions and certain other derivative positions of $6.1 million for derivatives in an asset position and paid cash collateral of $17.3 million for derivatives in a liability position. At December 31, 2017 , the Company held cash collateral related to a foreign currency derivative position and certain other derivative positions of $3.9 million for derivatives in an asset position and paid cash collateral of $1.3 million for derivatives in a liability position. The assets and liabilities related to the net collateral paid or held were recorded as Other assets and Other liabilities within the Unaudited Consolidated Balance Sheets as the collateral and derivative positions are not intended to be settled on a net basis. |
Summary of hedges of net investment in foreign operation | The following table provides the weighted average U.S. dollar equivalent of foreign denominated net assets that were hedged and the resulting derivative gain (loss) that was recorded in the foreign currency translation adjustment, net of tax, account within AOCI for the three months ended March 31, 2018 and 2017 : Derivative Instruments Designated as Hedges of a Net Investment in a Foreign Operation - Summary Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Weighted average of U.S. dollar equivalent of foreign denominated net assets $ 1,094,210 $ 1,677,145 Derivative gains (losses) (1) $ (2,323 ) $ 29,398 ____________ (1) Derivative gains (losses) from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in the cumulative translation adjustment account within AOCI for each period. |
Summary of net realized and unrealized gains (losses) on derivative instruments | The following table provides the total impact on earnings relating to derivative instruments not formally designated as hedging instruments. The impacts are all recorded through "Net realized and unrealized gains (losses) on derivative instruments" in the Unaudited Consolidated Statements of Income for the three months ended March 31, 2018 and 2017 : Net Realized and Unrealized Gains (Losses) on Derivative Instruments Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Investment Related Derivatives: Interest rate exposure $ 997 $ (214 ) Foreign currency exposure (3,318 ) (745 ) Credit exposure (41 ) (854 ) Financial market exposure (1,348 ) 185 Other Non-Investment Derivatives: Foreign currency exposure — (1,210 ) Credit exposure 615 632 Modified coinsurance and funds withheld contracts, including life retrocession embedded derivative 2,492 (3,925 ) Other 4,824 (938 ) Net realized and unrealized gains (losses) on derivative instruments $ 4,221 $ (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets $ 22,921 $ (50,101 ) |
Summary of impact of Life Retro Arrangements | The impact of the GreyCastle Life Retro Arrangements on the Company's results was as follows: Impact of GreyCastle Life Retro Arrangements Three months ended March 31, (U.S. dollars in thousands) 2018 2017 Underwriting profit (loss) $ — $ — Net investment income - Life Funds Withheld Assets 30,398 33,364 Net realized gains (losses) on investments, trading - Life Funds Withheld Assets 10,358 34,474 Net unrealized gains (losses) on investments, trading - Life Funds Withheld Assets (31,667 ) (1,406 ) OTTI - Life Funds Withheld Assets (1,203 ) — Foreign exchange gains (losses) 10,719 3,294 Other income and expenses (36 ) (70 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets 22,921 (50,101 ) Net income (loss) $ 41,490 $ 19,555 Change in net unrealized gains (losses) on investments AFS - Life Funds Withheld Assets (35,754 ) (20,108 ) Change in adjustments related to future policy benefit reserves 4,164 5,132 Change in cumulative translation adjustment - Life Funds Withheld Assets (9,900 ) (4,579 ) Total changes to other comprehensive income as a result of GreyCastle Life Retro Arrangements $ (41,490 ) $ (19,555 ) Comprehensive income (loss) $ — $ — |
Summary of fair value hedges that have been settled and their impact on results | A summary of the fair value hedges that have been settled and their impact on results up to the indicated periods, as well as the remaining balance of the fair value hedges and average years remaining to maturity at March 31, 2018 and 2017 , are shown below: Settlement of Fair Value Hedges - Summary Fair Value Hedges - Structured Indemnity Contracts March 31, (U.S. dollars in thousands, except years) 2018 2017 Cumulative reduction to interest expense $ 124,255 $ 122,118 Remaining balance $ 108,940 $ 111,077 Weighted average years remaining to maturity 18.3 18.7 |
Summary of contingent credit features | The aggregate fair value of all derivative agreements containing such rating downgrade provisions that were in a liability position and any collateral posted under these agreements at March 31, 2018 and December 31, 2017 were as follows: Contingent Credit Features - Summary: (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Aggregate fair value of derivative agreements with downgrade provisions in a net liability position $ (7,872 ) $ 7,464 Collateral posted to counterparty $ 6,720 $ 40 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy | The following tables set forth the Company's assets and liabilities that were accounted for at fair value at March 31, 2018 and December 31, 2017 by level within the fair value hierarchy: March 31, 2018 (U.S. dollars in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Counterparty Netting Balance at Assets Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ — $ 4,182,925 $ 5,034 $ — $ 4,187,959 U.S. States, municipalities and political subdivisions — 2,013,162 — — 2,013,162 Non-U.S. Governments — 5,306,651 — — 5,306,651 Corporate — 9,740,542 2,128 — 9,742,670 RMBS — 4,522,786 6,937 — 4,529,723 CMBS — 1,259,519 — — 1,259,519 Other asset-backed securities — 1,588,659 19,737 — 1,608,396 Total fixed maturities - AFS - Excluding Funds Withheld Assets, at fair value $ — $ 28,614,244 $ 33,836 $ — $ 28,648,080 Short-term investments, at fair value (1) — 500,170 — — 500,170 Total investments AFS - Excluding Funds Withheld Assets $ — $ 29,114,414 $ 33,836 $ — $ 29,148,250 Fixed maturities - Life Funds Withheld Assets U.S. Government $ — $ 11,616 $ — $ — $ 11,616 Non-U.S. Governments — 584,406 — — 584,406 Corporate — 1,121,203 — — 1,121,203 RMBS — 503 — — 503 CMBS — 130,070 — — 130,070 Other asset-backed securities — 160,750 — — 160,750 Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value $ — $ 2,008,548 $ — $ — $ 2,008,548 Total investments - AFS, at fair value $ — $ 31,122,962 $ 33,836 $ — $ 31,156,798 Fixed maturities trading U.S. Government $ — $ 9,320 $ — $ — $ 9,320 Non-U.S. Governments — 497,108 — — 497,108 Corporate — 1,525,761 — — 1,525,761 RMBS — 893 — — 893 CMBS — 7,472 — — 7,472 Other asset-backed securities — 43,697 — — 43,697 Total fixed maturities trading - Life Funds Withheld Assets, at fair value $ — $ 2,084,251 $ — $ — $ 2,084,251 Short-term investments trading, at fair value (1) — 7,425 — — 7,425 Total investments trading $ — $ 2,091,676 $ — $ — $ 2,091,676 Cash equivalents (2) 522,096 1,409,637 — — 1,931,733 Cash equivalents - Life Funds Withheld Assets (2) 1,514 77,938 — — 79,452 Equity securities, at fair value 474,118 163,754 — — 637,872 Other investments (3) — 580,946 231,368 — 812,314 Other assets (4) — 17,728 18,175 (7,239 ) 28,664 Total assets accounted for at fair value $ 997,728 $ 35,464,641 $ 283,379 $ (7,239 ) $ 36,738,509 Liabilities Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) (5) $ — $ 1,085,099 $ — $ — $ 1,085,099 Other liabilities (4) — 29,560 17,841 (7,239 ) 40,162 Total liabilities accounted for at fair value $ — $ 1,114,659 $ 17,841 $ (7,239 ) $ 1,125,261 December 31, 2017 (U.S. dollars in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Counterparty Netting Balance at December 31, 2017 Assets Fixed maturities - AFS - Excluding Life Funds Withheld Assets U.S. Government $ — $ 4,344,450 $ 18,290 $ — $ 4,362,740 U.S. States, municipalities and political subdivisions — 2,064,640 — — 2,064,640 Non-U.S. Governments — 5,201,581 — — 5,201,581 Corporate — 9,793,841 1,292 — 9,795,133 RMBS — 4,724,402 — — 4,724,402 CMBS — 1,244,017 — — 1,244,017 Other asset-backed securities — 1,504,131 5,232 — 1,509,363 Total fixed maturities - AFS - Excluding Funds Withheld Assets, at fair value $ — $ 28,877,062 $ 24,814 $ — $ 28,901,876 Short-term investments, at fair value (1) — 815,481 — — 815,481 Equity securities, at fair value 557,510 156,457 — — 713,967 Total investments AFS - Excluding Funds Withheld Assets $ 557,510 $ 29,849,000 $ 24,814 $ — $ 30,431,324 Fixed maturities - Life Funds Withheld Assets U.S. Government $ — $ 11,316 $ — $ — $ 11,316 Non-U.S. Governments — 584,534 — — 584,534 Corporate — 1,137,213 — — 1,137,213 RMBS — 515 — — 515 CMBS — 122,272 — — 122,272 Other asset-backed securities — 171,262 — — 171,262 Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value $ — $ 2,027,112 $ — $ — $ 2,027,112 Total investments - AFS, at fair value $ 557,510 $ 31,876,112 $ 24,814 $ — $ 32,458,436 Fixed maturities trading U.S. Government $ — $ 11,042 $ — $ — $ 11,042 U.S. States, municipalities and political subdivisions — 31 — — 31 Non-U.S. Governments — 485,171 — — 485,171 Corporate — 1,460,292 — — 1,460,292 RMBS — 932 — — 932 CMBS — 7,580 — — 7,580 Other asset-backed securities — 41,337 — — 41,337 Total fixed maturities trading - Life Funds Withheld Assets, at fair value $ — $ 2,006,385 $ — $ — $ 2,006,385 Short-term investments trading, at fair value (1) — 14,965 — — 14,965 Total investments trading $ — $ 2,021,350 $ — $ — $ 2,021,350 Cash equivalents (2) 279,224 1,271,483 — — 1,550,707 Cash equivalents - Life Funds Withheld Assets (2) — 67,982 — — 67,982 Other investments (3) — 570,931 221,708 — 792,639 Other assets (4) — 14,467 18,327 (3,579 ) 29,215 Total assets accounted for at fair value $ 836,734 $ 35,822,325 $ 264,849 $ (3,579 ) $ 36,920,329 Liabilities Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) (5) $ — $ 1,112,969 $ — $ — $ 1,112,969 Other liabilities (4) — 44,591 18,305 (3,579 ) 59,317 Total liabilities accounted for at fair value $ — $ 1,157,560 $ 18,305 $ (3,579 ) $ 1,172,286 ____________ (1) Short-term investments consist primarily of U.S. and Non-U.S. Government securities, Corporate securities, and Other asset-backed securities. (2) Cash equivalents balances subject to fair value measurement include certificates of deposit and money market funds. Operating cash balances are not subject to recurring fair value measurement guidance. (3) Excluded from Other Investments are certain investments that are measured using net asset value as a practical expedient in the amount of $201.8 million and $198.2 million at March 31, 2018 and December 31, 2017 , respectively. Under GAAP, these investments are excluded from the fair value hierarchy table. In addition, the Other investments balance excludes loans held at amortized cost, which totaled $172.9 million at March 31, 2018 and $173.0 million at December 31, 2017 . For further information, see Item 8, Note 6, "Other Investments ," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . (4) Other assets and other liabilities include derivative instruments. The derivative balances included in each category are reported gross of cash collateral by level with a counterparty netting adjustment presented separately in the Counterparty Netting column. The fair values of the individual derivative contracts are reported gross in their respective levels based on the fair value hierarchy. For further details regarding derivative fair values and associated collateral received or paid, see Note 5, "Derivative Instruments ." (5) Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) include balances related to the life retrocession embedded derivative, under which all investment results associated with the Life Funds Withheld Assets related to the GreyCastle Life Retro Arrangements described in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation ," accrue to the benefit of GCLR. |
Level 3 Roll Forward | Level 3 Assets and Liabilities - Three Months Ended March 31, 2018 (U.S. dollars in thousands) Balance, beginning of period Realized gains (losses) Movement in unrealized gains (losses) Purchases and Issuances Sales Settlements Net transfers into (out of) Level 3 Balance, end of period Movement in total gains (losses) relating to investments still held U.S. Government $ 18,290 $ (354 ) $ 114 $ — $ (13,016 ) $ — $ — $ 5,034 $ (36 ) Corporate 1,292 — 43 — — (101 ) 894 2,128 44 RMBS — — — 980 — — 5,957 6,937 — Other asset-backed securities 5,232 — (28 ) 15,407 — (874 ) — 19,737 — Other investments 221,708 847 5,191 14,280 — (10,658 ) — 231,368 5,338 Derivative Contracts - Net 22 — 312 — — — — 334 312 Total $ 246,544 $ 493 $ 5,632 $ 30,667 $ (13,016 ) $ (11,633 ) $ 6,851 $ 265,538 $ 5,658 Level 3 Assets and Liabilities - Three Months Ended March 31, 2017 (U.S. dollars in thousands) Balance, beginning of period Realized gains (losses) Movement in unrealized gains (losses) Purchases and Issuances Sales Settlements Net transfers into (out of) Level 3 Balance, end of period Movement in total gains (losses) relating to investments still held U.S. Government $ 24,751 $ (19 ) $ (355 ) $ — $ — $ (311 ) $ (4,758 ) $ 19,308 $ (373 ) Corporate 20,085 — 11 — (10,284 ) (31 ) 118 9,899 11 RMBS — 17 (526 ) — — (173 ) 4,063 3,381 (509 ) CMBS 99 — 2 — — — — 101 2 Other asset-backed securities 1,131 30 101 — — (46 ) 2,734 3,950 131 Short-term investments — — — 11,693 — (28 ) — 11,665 — Other investments 205,528 (5,541 ) 7,102 4,982 — (5,397 ) (2,709 ) 203,965 6,343 Derivative Contracts - Net 2 — 161 — — — — 163 163 Total $ 251,596 $ (5,513 ) $ 6,496 $ 16,675 $ (10,284 ) $ (5,986 ) $ (552 ) $ 252,432 $ 5,768 |
Financial Instruments Not Carried at Fair Value | The following table includes financial instruments for which the carrying value differs from the estimated fair values at March 31, 2018 and December 31, 2017 . All of these fair value estimates are considered Level 2 fair value measurements. March 31, 2018 December 31, 2017 (U.S. dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Financial Assets - Other investments $ 172,879 $ 181,349 $ 172,982 $ 182,222 Deposit liabilities $ 982,963 $ 1,190,885 $ 1,042,677 $ 1,266,682 Notes payable and debt 3,240,461 3,483,428 3,220,769 3,507,108 Financial Liabilities $ 4,223,424 $ 4,674,313 $ 4,263,446 $ 4,773,790 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Analysis of goodwill and intangible assets | The following table presents an analysis of goodwill, intangible assets with an indefinite life and intangible assets with a definite life for the three months ended March 31, 2018 : (U.S. dollars in thousands) Goodwill Intangible Intangible Total Balance at December 31, 2017 $ 1,234,150 $ 699,014 $ 292,587 $ 2,225,751 Amortization — — (4,944 ) (4,944 ) Foreign Currency Translation 4,850 2,916 1,933 9,699 Balance at March 31, 2018 $ 1,239,000 $ 701,930 $ 289,576 $ 2,230,506 |
Losses and Loss Expenses (Table
Losses and Loss Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Reconciliation of the beginning and ending balances of unpaid losses and loss expenses | The following table represents a reconciliation of the beginning and ending balances of unpaid losses and loss expenses, including an analysis of the Company's paid and unpaid losses and loss expenses incurred for the years indicated: (U.S. dollars in thousands) 2018 2017 Unpaid losses and loss expenses at the beginning of the year $ 29,696,779 $ 25,939,571 Unpaid losses and loss expenses recoverable at the beginning of the year (1) 7,239,446 5,480,300 Net unpaid losses and loss expenses at the beginning of the year $ 22,457,333 $ 20,459,271 Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in: Current year 1,631,142 1,559,452 Prior year (9,136 ) 24,004 Total net incurred losses and loss expenses $ 1,622,006 $ 1,583,456 Foreign exchange and other 262,571 56,244 Less net losses and loss expenses paid in respect of losses occurring in: Current year 128,691 106,472 Prior year 1,774,194 1,222,119 Total net paid losses $ 1,902,885 $ 1,328,591 Net unpaid losses and loss expenses at March 31 22,439,025 20,770,380 Unpaid losses and loss expenses recoverable at March 31 (1) 7,262,543 5,674,744 Unpaid losses and loss expenses at March 31 $ 29,701,568 $ 26,445,124 ____________ (1) P&C business only, net of provision for uncollectible reinsurance. |
Segment Reporting Information [Line Items] | |
Net (favorable) adverse prior year loss development | The following table presents the net (favorable) adverse prior year loss development of the Company's loss and loss expense reserves for its P&C operations by operating segment for each of the years indicated: Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Insurance segment $ (5,295 ) $ (4,642 ) Reinsurance segment (3,841 ) 28,646 Total $ (9,136 ) $ 24,004 |
Insurance Segment | |
Segment Reporting Information [Line Items] | |
Net (favorable) adverse prior year loss development | The following table summarizes the net (favorable) adverse prior year reserve development by product type relating to the Insurance segment for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Professional $ (1,830 ) $ (5 ) Casualty (5,115 ) (4,770 ) Property 1,257 81 Specialty 393 52 Total $ (5,295 ) $ (4,642 ) |
Reinsurance Segment | |
Segment Reporting Information [Line Items] | |
Net (favorable) adverse prior year loss development | The following table summarizes the net (favorable) adverse prior year reserve development by line of business relating to the Reinsurance segment for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (U.S. dollars in thousands) 2018 2017 Property and other short-tail lines $ (18,994 ) $ (54,916 ) Casualty and other long-tail lines 15,153 83,562 Total $ (3,841 ) $ 28,646 |
Notes Payable and Debt and Fi31
Notes Payable and Debt and Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Line of Credit Facility [Line Items] | |
Schedule of financing structure | The following table presents the Company's outstanding notes payable and debt at March 31, 2018 and December 31, 2017 : (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Outstanding (1) Outstanding (1) Debt Issuance: $300 million, 2.30% Senior Notes due December 2018 $ 299,525 $ 299,357 $400 million, 5.75% Senior Notes due October 2021 398,492 398,384 $350 million, 6.375% Senior Notes due November 2024 349,275 349,248 $500 million, 4.45% Subordinated Notes due March 2025 494,340 494,138 $325 million, 6.25% Senior Notes due May 2027 323,571 323,531 $300 million, 5.25% Senior Notes due December 2043 296,593 296,560 $500 million, 5.5% Subordinated Notes due March 2045 (2) 472,928 472,832 €500 million, 3.25% Subordinated Notes due June 2047 (3) 605,737 586,719 Total debt carrying value $ 3,240,461 $ 3,220,769 ____________ (1) "Outstanding" data represent March 31, 2018 and December 31, 2017 accreted values. (2) On July 7, 2017, the Company repurchased and canceled $16.7 million of the original debt issuance. See below for further details. (3) This issuance carries a fixed coupon of 3.25% for a period of ten years, then a floating rate of three-month EURIBOR plus 2.90% from (and including) June 29, 2027 through maturity. The outstanding amount is subject to movement due to foreign exchange |
Letter of Credit Summary | The following table presents the Company's ten letter of credit facilities and revolving credit facilities at March 31, 2018 and December 31, 2017 : (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Facility Name: Commitment In Use/ Commitment In Use/ 2016 Credit Agricole Facility I 125,000 125,000 125,000 125,000 2016 Credit Agricole Facility II 125,000 125,000 125,000 125,000 2017 Commonwealth Bank Facility 215,000 215,000 215,000 215,000 2017 Credit Suisse Facility 100,000 100,000 100,000 100,000 FAL Facility I 125,000 125,000 125,000 125,000 FAL Facility II 125,000 125,000 125,000 125,000 FAL Facility III 125,000 125,000 125,000 125,000 FAL Facility IV 125,000 125,000 125,000 125,000 Syndicated Unsecured Facility 750,000 105,655 750,000 2,000 2017 Commerzbank Facility 100,000 100,000 100,000 100,000 Total unsecured LOC facilities $ 1,915,000 $ 1,270,655 $ 1,915,000 $ 1,167,000 Facilities collateralized by certain investment assets 1,552,841 1,536,556 1,477,986 1,382,226 Total LOC facilities $ 3,467,841 $ 2,807,211 $ 3,392,986 $ 2,549,226 Percentage of facilities collateralized by certain investment assets 54.7 % 54.2 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of related party transactions | During the three months ended March 31, 2018 and 2017 , these contracts resulted in reported net premiums, reported net losses, and reported net acquisition costs as summarized below: (U.S. dollars in thousands) Three months ended March 31, 2018 2017 Reported net premiums $ 15,578 $ 21,715 Reported net losses $ 11,719 $ 11,250 Reported net acquisition costs $ 5,587 $ 9,214 |
Variable Interest Entities - (T
Variable Interest Entities - (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Variable Interest Entities Disclosure [Abstract] | |
Schedule of variable interest entities | The Company currently holds a controlling financial interest in Vector Re by way of its controlling financial interests in New Ocean FCFL and New Ocean MVCFL. The total net assets of New Ocean FCFL and New Ocean MVCFL are included in the Unaudited Consolidated Financial Statements of the Company as quantified in the table below. The Company's shares of revenue and net income in its New Ocean-related VIEs were not material to the Company for the three months ended March 31, 2018 . All appropriate inter-company transactions between the Company's consolidated entities have been eliminated. (U.S. dollars in thousands) March 31, 2018 December 31, 2017 Total net assets $ 235,936 $ 242,605 Non-controlling interests 127,650 134,139 Total net assets attributable to XL $ 108,286 $ 108,466 |
Share Capital (Tables)
Share Capital (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Valuation Assumptions - Stock Options | The fair value of the options issued was estimated on the date of grant using the Black-Scholes option pricing model incorporating the following weighted average assumptions: Dividend yield 2.00 % Risk free interest rate 2.71 % Volatility 27.0 % Expected lives 6.0 years |
Computation of Earnings Per C35
Computation of Earnings Per Common Share and Common Share Equivalent (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of earnings per share | The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (In thousands, except per share amounts) 2018 2017 Basic earnings per common share & common share equivalents outstanding: Net income (loss) attributable to common shareholders $ 152,648 $ 152,843 Weighted average common shares outstanding - basic 256,922 265,690 Basic earnings per common share & common share equivalents outstanding $ 0.59 $ 0.58 Diluted earnings per common share & common share equivalents outstanding: Weighted average common shares outstanding - basic 256,922 265,690 Impact of share-based compensation 4,254 4,077 Weighted average common shares outstanding - diluted 261,176 269,767 Diluted earnings per common share & common share equivalents outstanding $ 0.58 $ 0.57 Dividends per common share $ 0.22 $ 0.22 |
Antidilutive securities excluded from the computation of earnings per share | For the three months ended March 31, 2018 and 2017 , common shares available for issuance under share-based compensation plans noted in the table below were not included in the calculation of diluted earnings per common share because the assumed exercise or issuance of such shares would be anti-dilutive. Three Months Ended March 31, (In millions) 2018 2017 Common shares available for issuance under share-based compensation plans 0.6 3.0 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income Loss Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in AOCI, net of tax, by component for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 (U.S. dollars in thousands) Unrealized Gains (Losses) on Investments (1) OTTI Losses Recognized in AOCI Foreign Currency Translation Adjustments Underfunded Pension Liability Cash Flow Hedge Total Balance, beginning of period, net of tax $ 870,478 $ (43,527 ) $ 83,042 $ (22,356 ) $ 1,794 $ 889,431 OCI before reclassifications (399,792 ) — (3,112 ) (223 ) — (403,127 ) Amounts reclassified from AOCI 10,875 3,713 — — (48 ) 14,540 Tax benefit (expense) 28,747 (97 ) 680 34 — 29,364 Net current period OCI - net of tax (360,170 ) 3,616 (2,432 ) (189 ) (48 ) (359,223 ) Reclassification due to the adoption of ASU 2016-01 (2) $ (221,856 ) $ — $ — $ — $ — $ (221,856 ) Reclassification due to the adoption of ASU 2018-02 $ 6,357 $ — $ (216 ) $ (2,238 ) $ — $ 3,903 Balance, end of period, net of tax $ 294,809 $ (39,911 ) $ 80,394 $ (24,783 ) $ 1,746 $ 312,255 Three Months Ended March 31, 2017 (U.S. dollars in thousands) Balance, beginning of period, net of tax $ 730,429 $ (50,952 ) $ 58,970 $ (24,887 ) $ 1,986 $ 715,546 OCI before reclassifications 149,959 — 39,204 (341 ) — 188,822 Amounts reclassified from AOCI (52,554 ) 1,455 — — (48 ) (51,147 ) Tax benefit (expense) (10,952 ) (13 ) 2,734 (16 ) — (8,247 ) Net current period OCI - net of tax 86,453 1,442 41,938 (357 ) (48 ) 129,428 Balance, end of period, net of tax $ 816,882 $ (49,510 ) $ 100,908 $ (25,244 ) $ 1,938 $ 844,974 ____________ (1) For certain annuity contracts that are subject to the GreyCastle Life Retro Arrangements, future policy benefit reserves were historically increased for the impact of changes in unrealized gains on investments supporting such contracts as if the gains had been realized, with a corresponding entry to other comprehensive income ("Shadow Adjustments"). Upon completion of the GreyCastle Life Retro Arrangements, no further Shadow Adjustments were recorded. At December 31, 2017, the cumulative impact of the Shadow Adjustments was $184.9 million . During the three months ended March 31, 2018 , net movements of $(4.2) million were recorded, resulting in a total cumulative net impact of Shadow Adjustments on future policy benefit reserves of $180.8 million at March 31, 2018 . (2) The reclassification out of AOCI due to the adoption of ASU 2016-01 includes $233.8 million of net unrealized gains less $11.9 million of deferred tax on net unrealized gains as discussed in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements ." |
Reclassification out of Accumulated Other Comprehensive Income | The reclassifications out of AOCI along with the associated Unaudited Consolidated Statements of Income line items affected by component, and the total related tax (expense) benefit for the three months ended March 31, 2018 and 2017 are as follows: Gross Amount Reclassified From AOCI Details About AOCI Components - Affected Line Items in the Unaudited Consolidated Statements of Income (U.S. dollars in thousands) Three months ended March 31, 2018 Three months ended March 31, 2017 Unrealized gains and losses on investments: Net realized gains (losses) on investments AFS $ 17,762 $ (47,020 ) OTTI 2,848 6,874 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets (9,735 ) (12,408 ) Income (loss) from investment affiliates — — Total before tax $ 10,875 $ (52,554 ) Provision (benefit) for income tax (2,002 ) (474 ) Net of tax $ 8,873 $ (53,028 ) OTTI losses recognized in OCI: Net realized gains (losses) on investments AFS $ 3,552 $ 1,455 OTTI transferred to (from) OCI 161 — Total before tax $ 3,713 $ 1,455 Provision (benefit) for income tax (97 ) (13 ) Net of tax $ 3,616 $ 1,442 Gains and losses on cash flow hedges: Interest Expense $ (48 ) $ (48 ) Provision (benefit) for income tax — — Net of tax $ (48 ) $ (48 ) Total reclassifications for the period, gross of tax $ 14,540 $ (51,147 ) Tax benefit (expense) (2,099 ) (487 ) Total reclassifications for the period, net of tax $ 12,441 $ (51,634 ) |
Guarantor Financial Informati37
Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Income Statements, Captions [Line Items] | |
Guarantor balance sheet | March 31, 2018 Condensed Consolidating Balance Sheet (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Fixed maturities AFS $ — $ 449,368 $ 30,207,260 $ — $ 30,656,628 Short-term investments AFS — — 500,170 — 500,170 Fixed maturities trading — — 2,084,251 — 2,084,251 Short-term investments trading — — 7,425 — 7,425 Equity securities — — 637,872 — 637,872 Investments in affiliates — — 1,900,105 — 1,900,105 Other investments — — 1,186,983 — 1,186,983 Total investments $ — $ 449,368 $ 36,524,066 $ — $ 36,973,434 Cash and cash equivalents 20,360 233,948 3,230,455 — 3,484,763 Restricted cash — — 155,023 — 155,023 Investments in subsidiaries 9,632,524 13,277,715 — (22,910,239 ) — Accrued investment income 11 2,133 263,557 — 265,701 Deferred acquisition costs and value of business acquired — — 1,317,797 — 1,317,797 Ceded unearned premiums — — 2,950,077 — 2,950,077 Premiums receivable — — 7,988,469 — 7,988,469 Reinsurance balances receivable — — 1,210,620 — 1,210,620 Unpaid losses and loss expenses recoverable — — 7,271,013 — 7,271,013 Receivable from investments sold — 15,000 243,084 — 258,084 Goodwill and other intangible assets — — 2,230,506 — 2,230,506 Deferred tax asset — — 356,667 — 356,667 Amounts due from subsidiaries/parent 57,632 — 70,582 (128,214 ) — Other assets 1,916 27,611 846,282 — 875,809 Total assets $ 9,712,443 $ 14,005,775 $ 64,658,198 $ (23,038,453 ) $ 65,337,963 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 29,701,568 $ — $ 29,701,568 Deposit liabilities — — 982,963 — 982,963 Future policy benefit reserves — — 3,680,958 — 3,680,958 Funds withheld on GreyCastle life retrocession arrangements — — 989,140 — 989,140 Unearned premiums — — 9,687,293 — 9,687,293 Notes payable and debt — 3,240,461 — — 3,240,461 Reinsurance balances payable — — 4,432,331 — 4,432,331 Payable for investments purchased — — 317,339 — 317,339 Deferred tax liability — 1,949 56,046 — 57,995 Amounts due to subsidiaries/parent — 122,328 5,886 (128,214 ) — Other liabilities 83,914 51,592 877,187 — 1,012,693 Total liabilities $ 83,914 $ 3,416,330 $ 50,730,711 $ (128,214 ) $ 54,102,741 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 9,628,529 $ 9,632,524 $ 13,277,715 $ (22,910,239 ) $ 9,628,529 Non-controlling interest in equity of consolidated subsidiaries — 956,921 649,772 — 1,606,693 Total shareholders' equity $ 9,628,529 $ 10,589,445 $ 13,927,487 $ (22,910,239 ) $ 11,235,222 Total liabilities and shareholders' equity $ 9,712,443 $ 14,005,775 $ 64,658,198 $ (23,038,453 ) $ 65,337,963 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. December 31, 2017 Condensed Consolidating Balance Sheet (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Fixed maturities AFS $ — $ 528,152 $ 30,400,836 $ — $ 30,928,988 Short-term investments AFS — — 815,481 — 815,481 Fixed maturities trading — — 2,006,385 — 2,006,385 Short-term investments trading — — 14,965 — 14,965 Equity securities — — 713,967 — 713,967 Investments in affiliates — — 1,911,996 — 1,911,996 Other investments — — 1,163,863 — 1,163,863 Total investments $ — $ 528,152 $ 37,027,493 $ — $ 37,555,645 Cash and cash equivalents 3,950 158,688 3,273,316 — 3,435,954 Restricted cash — — 157,497 — 157,497 Investments in subsidiaries 9,817,979 13,379,083 — (23,197,062 ) — Accrued investment income 11 2,436 269,702 — 272,149 Deferred acquisition costs and value of business acquired — — 1,102,474 — 1,102,474 Ceded unearned premiums — — 2,198,217 — 2,198,217 Premiums receivable — — 6,934,482 — 6,934,482 Reinsurance balances receivable — — 930,114 — 930,114 Unpaid losses and loss expenses recoverable — — 7,247,723 — 7,247,723 Receivable from investments sold — — 201,515 — 201,515 Goodwill and other intangible assets — — 2,225,751 — 2,225,751 Deferred tax asset — — 332,024 — 332,024 Amounts due from subsidiaries/parent 32,301 — 61,976 (94,277 ) — Other assets 14,541 27,244 800,906 — 842,691 Total assets $ 9,868,782 $ 14,095,603 $ 62,763,190 $ (23,291,339 ) $ 63,436,236 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 29,696,779 $ — $ 29,696,779 Deposit liabilities — — 1,042,677 — 1,042,677 Future policy benefit reserves — — 3,610,926 — 3,610,926 Funds withheld on GreyCastle life retrocession arrangements — — 999,219 — 999,219 Unearned premiums — — 8,307,431 — 8,307,431 Notes payable and debt — 3,220,769 — — 3,220,769 Reinsurance balances payable — — 3,706,116 — 3,706,116 Payable for investments purchased — 848 332,141 — 332,989 Deferred tax liability — — 57,574 — 57,574 Amounts due to subsidiaries/parent — 62,111 32,166 (94,277 ) — Other liabilities 20,465 36,975 942,996 — 1,000,436 Total liabilities $ 20,465 $ 3,320,703 $ 48,728,025 $ (94,277 ) $ 51,974,916 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 9,848,317 $ 9,817,979 $ 13,379,083 $ (23,197,062 ) $ 9,848,317 Non-controlling interest in equity of consolidated subsidiaries — 956,921 656,082 — 1,613,003 Total shareholders' equity $ 9,848,317 $ 10,774,900 $ 14,035,165 $ (23,197,062 ) $ 11,461,320 Total liabilities and shareholders' equity $ 9,868,782 $ 14,095,603 $ 62,763,190 $ (23,291,339 ) $ 63,436,236 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Guarantor income statement | Three Months Ended March 31, 2018 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 2,600,288 $ — $ 2,600,288 Total net investment income 8 3,287 215,186 — 218,481 Total realized investment gains (losses) — (1,586 ) (81,769 ) — (83,355 ) Net realized and unrealized gains (losses) on derivative instruments — — 4,221 — 4,221 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — 22,921 — 22,921 Income (loss) from investment affiliates — — 45,669 — 45,669 Fee income and other 4 — 6,713 — 6,717 Total revenues $ 12 $ 1,701 $ 2,813,229 $ — $ 2,814,942 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,622,006 $ — $ 1,622,006 Claims and policy benefits — — 10,307 — 10,307 Acquisition costs — — 463,827 — 463,827 Operating expenses 30,862 842 440,859 — 472,563 Foreign exchange (gains) losses 1,270 510 8,061 — 9,841 Interest expense — 40,039 13,506 — 53,545 Total expenses $ 32,132 $ 41,391 $ 2,558,566 $ — $ 2,632,089 Income (loss) before income tax and income (loss) from operating affiliates $ (32,120 ) $ (39,690 ) $ 254,663 $ — $ 182,853 Income (loss) from operating affiliates — — 10,282 — 10,282 Equity in net earnings (losses) of subsidiaries 184,768 234,278 — (419,046 ) — Provision (benefit) for income tax — — 31,902 — 31,902 Net income (loss) $ 152,648 $ 194,588 $ 233,043 $ (419,046 ) $ 161,233 Non-controlling interests — 9,820 (1,235 ) — 8,585 Net income (loss) attributable to common shareholders $ 152,648 $ 184,768 $ 234,278 $ (419,046 ) $ 152,648 Comprehensive income (loss) $ (206,575 ) $ (174,455 ) $ (124,945 ) $ 299,400 $ (206,575 ) ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. Three Months Ended March 31, 2017 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 2,522,791 $ — $ 2,522,791 Total net investment income 83 2,313 198,219 (83 ) 200,532 Total realized investment gains (losses) — (777 ) 38,063 — 37,286 Net realized and unrealized gains (losses) on derivative instruments — — (7,069 ) — (7,069 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (50,101 ) — (50,101 ) Income (loss) from investment affiliates — — 38,261 — 38,261 Fee income and other — — 13,661 — 13,661 Total revenues $ 83 $ 1,536 $ 2,753,825 $ (83 ) $ 2,755,361 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,583,456 $ — $ 1,583,456 Claims and policy benefits — — 7,291 — 7,291 Acquisition costs — — 435,869 — 435,869 Operating expenses 16,180 509 451,349 — 468,038 Foreign exchange (gains) losses 176 1 (3,513 ) — (3,336 ) Interest expense — 35,147 15,564 — 50,711 Total expenses $ 16,356 $ 35,657 $ 2,490,016 $ — $ 2,542,029 Income (loss) before income tax and income (loss) from operating affiliates $ (16,273 ) $ (34,121 ) $ 263,809 $ (83 ) $ 213,332 Income (loss) from operating affiliates — — 13,609 — 13,609 Equity in net earnings (losses) of subsidiaries 169,116 239,526 — (408,642 ) — Provision (benefit) for income tax — — 13,092 — 13,092 Net income (loss) $ 152,843 $ 205,405 $ 264,326 $ (408,725 ) $ 213,849 Non-controlling interests — 36,289 24,800 (83 ) 61,006 Net income (loss) attributable to common shareholders $ 152,843 $ 169,116 $ 239,526 $ (408,642 ) $ 152,843 Comprehensive income (loss) $ 282,271 $ 298,544 $ 368,954 $ (667,498 ) $ 282,271 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Guarantor cash flow | Three Months Ended March 31, 2018 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ (39,431 ) $ 38,440 $ (237,133 ) $ — $ (238,124 ) Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 127,615 $ 4,241,584 $ — $ 4,369,199 Proceeds from redemption of fixed maturities and short-term investments — 37,790 663,614 — 701,404 Proceeds from sale of equity securities — — 78,716 — 78,716 Purchases of fixed maturities and short-term investments — (107,765 ) (4,809,426 ) — (4,917,191 ) Purchases of equity securities — — (33,230 ) — (33,230 ) Proceeds from sale of affiliates — — 244,340 — 244,340 Purchases of affiliates — — (76,014 ) — (76,014 ) Returns of capital from subsidiaries 11,000 — — (11,000 ) — Other, net — — (26,782 ) (26,782 ) Net cash provided by (used in) investing activities $ 11,000 $ 57,640 $ 282,802 $ (11,000 ) $ 340,442 Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 46,504 $ — $ — $ — $ 46,504 Buybacks of common shares (1,663 ) — — — (1,663 ) Employee withholding on share-based compensation — — (16,696 ) — (16,696 ) Return of capital — (11,000 ) — 11,000 — Distributions to non-controlling interests — (9,820 ) (6,126 ) — (15,946 ) Contributions from non-controlling interests — — 439 — 439 Contingent consideration paid on business combination — — (5,000 ) — (5,000 ) Deposit liabilities — — (71,124 ) — (71,124 ) Net cash provided by (used in) financing activities $ 44,841 $ (20,820 ) $ (98,507 ) $ 11,000 $ (63,486 ) Effects of exchange rate changes on foreign currency cash — — 7,503 — 7,503 Increase (decrease) in cash, cash equivalents and restricted cash $ 16,410 $ 75,260 $ (45,335 ) $ — $ 46,335 Cash, cash equivalents and restricted cash - beginning of year 3,950 158,688 3,430,813 — 3,593,451 Cash, cash equivalents and restricted cash - end of period $ 20,360 $ 233,948 $ 3,385,478 $ — $ 3,639,786 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. Three Months Ended March 31, 2017 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ 235,642 $ 118,694 $ (1,833 ) $ (400,000 ) $ (47,497 ) Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 547 $ 2,491,458 $ — $ 2,492,005 Proceeds from redemption of fixed maturities and short-term investments — 44,453 1,183,903 — 1,228,356 Proceeds from sale of equity securities — 677 45,702 — 46,379 Purchases of fixed maturities and short-term investments — (3,098 ) (3,629,909 ) — (3,633,007 ) Purchases of equity securities — — (47,967 ) — (47,967 ) Proceeds from sale of affiliates — — 168,237 — 168,237 Purchases of affiliates — — (35,926 ) — (35,926 ) Other, net — — 23,429 — 23,429 Net cash provided by (used in) investing activities $ — $ 42,579 $ 198,927 $ — $ 241,506 Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 23,296 $ — $ — $ — $ 23,296 Buybacks of common shares (200,488 ) — — — (200,488 ) Employee withholding on share-based compensation — — (22,871 ) — (22,871 ) Dividends paid on common shares (58,392 ) — (400,000 ) 400,000 (58,392 ) Distributions to non-controlling interests — (3,701 ) (21,699 ) — (25,400 ) Contributions from non-controlling interests — — 26 — 26 Deposit liabilities — — (7,771 ) — (7,771 ) Net cash provided by (used in) financing activities $ (235,584 ) $ (3,701 ) $ (452,315 ) $ 400,000 $ (291,600 ) Effects of exchange rate changes on foreign currency cash — — 30,273 — 30,273 Increase (decrease) in cash, cash equivalents and restricted cash $ 58 $ 157,572 $ (224,948 ) $ — $ (67,318 ) Cash, cash equivalents and restricted cash - beginning of year 1,022 84,286 3,495,184 — 3,580,492 Cash, cash equivalents and restricted cash - end of period $ 1,080 $ 241,858 $ 3,270,236 $ — $ 3,513,174 ____________ (1) Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Significant Accounting Polici38
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | May 30, 2014 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Cumulative Effect on Retained Earnings, before Tax | $ 233,800 | ||
Cumulative Effect on Retained Earnings, Tax | (11,900) | ||
Grey Castle Life Reinsurance SAC Ltd | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Quota share reinsurance agreement, percentage | 100.00% | ||
Accounting Standards Update 2018-02 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification due to adoption of new accounting pronouncement | (3,903) | ||
Accounting Standards Update 2018-02 | AOCI Attributable to Parent [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reclassification due to adoption of new accounting pronouncement | $ (3,903) | $ 0 |
Acquisition and Disposals - Mer
Acquisition and Disposals - Merger with AXA (Details) - AXA SA [Member] $ / shares in Units, $ in Billions | Mar. 05, 2018USD ($)$ / shares |
Business Acquisition [Line Items] | |
Percentage acquired | 100.00% |
Share price | $ 57.60 |
Estimated aggregate consideration | $ | $ 15.3 |
Maximum dividend permitted per share | $ 0.22 |
Segment Information - Statement
Segment Information - Statement of earnings by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | ||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | $ 4,979,735 | $ 4,678,417 | |||
Net premiums written | 3,155,718 | 2,983,070 | |||
Net premiums earned | 2,600,288 | 2,522,791 | |||
Net losses and loss expenses | [1] | 1,632,313 | 1,590,747 | ||
Acquisition costs | 463,827 | 435,869 | [1] | ||
Operating expenses | [2] | 390,060 | 357,719 | ||
Underwriting profit (loss) | 114,088 | 138,456 | |||
Net results from structured products | 3,411 | [3] | 2,914 | [4] | |
Net fee income and other | (5,742) | [5] | 2,215 | [6] | |
Net realized and unrealized gains (losses) on derivative instruments | 4,221 | (7,069) | |||
Net income (loss) from investment fund affiliates and operating affiliates | 55,951 | 51,870 | |||
Foreign exchange (gains) losses | 9,841 | (3,336) | |||
Corporate operating expenses | 70,043 | 98,873 | |||
Contribution from P&C and Corporate and Other | 237,781 | 267,191 | |||
Interest expense | [7] | 44,646 | 40,250 | ||
Income tax | 31,902 | 13,092 | |||
Non-controlling interests | 8,585 | 61,006 | |||
Net income (loss) attributable to common shareholders | 152,648 | 152,843 | |||
Excluding Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | [8] | 175,772 | 153,793 | ||
Net realized investment gains (losses) | (60,843) | 4,218 | |||
Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | 30,398 | 33,364 | |||
Net realized investment gains (losses) | (22,512) | 33,068 | |||
Net realized and unrealized gains (losses) on derivative instruments | 22,921 | (50,101) | |||
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | [9] | 52,595 | 56,811 | ||
Net premiums written | [9] | 3,107 | 3,310 | ||
Net premiums earned | [9] | 3,107 | 3,310 | ||
Net losses and loss expenses | [1],[9] | 10,307 | 7,291 | ||
Acquisition costs | [9] | 1,011 | 1,307 | [1] | |
Operating expenses | [2],[9] | 141 | 233 | ||
Underwriting profit (loss) | [9] | (8,352) | (5,521) | ||
Net results from structured products | [9] | 0 | [3] | 0 | [4] |
Net fee income and other | [9] | 69 | [5] | (438) | [6] |
Net realized and unrealized gains (losses) on derivative instruments | [9] | 4,221 | (7,069) | ||
Net income (loss) from investment fund affiliates and operating affiliates | [9] | 55,951 | 51,870 | ||
Foreign exchange (gains) losses | [9] | 9,841 | (3,336) | ||
Corporate operating expenses | [9] | 70,043 | 98,873 | ||
Contribution from P&C and Corporate and Other | [9] | 10,445 | (33,750) | ||
Interest expense | [7],[9] | 44,646 | 40,250 | ||
Income tax | [9] | 31,902 | 13,092 | ||
Non-controlling interests | [9] | 8,585 | 61,006 | ||
Corporate and Other | Excluding Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | [8],[9] | 7,519 | 7,227 | ||
Net realized investment gains (losses) | [9] | 114 | (613) | ||
Corporate and Other | Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | [9] | 30,398 | 33,364 | ||
Net realized investment gains (losses) | (22,512) | 33,068 | |||
Net realized and unrealized gains (losses) on derivative instruments | [9] | 22,921 | (50,101) | ||
Operating segments | Total P&C | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 4,927,140 | 4,621,606 | |||
Net premiums written | 3,152,611 | 2,979,760 | |||
Net premiums earned | 2,597,181 | 2,519,481 | |||
Net losses and loss expenses | [1] | 1,622,006 | 1,583,456 | ||
Acquisition costs | 462,816 | 434,562 | [1] | ||
Operating expenses | [2] | 389,919 | 357,486 | ||
Underwriting profit (loss) | 122,440 | 143,977 | |||
Net results from structured products | 3,411 | [3] | 2,914 | [4] | |
Net fee income and other | (5,811) | [5] | 2,653 | [6] | |
Net realized and unrealized gains (losses) on derivative instruments | 0 | ||||
Contribution from P&C and Corporate and Other | $ 227,336 | $ 300,941 | |||
Ratios - P&C operations | |||||
Loss and loss expense ratio | [10] | 62.50% | 62.80% | ||
Underwriting expense ratio | [10] | 32.80% | 31.50% | ||
Combined ratio | [10] | 95.30% | 94.30% | ||
Operating segments | Total P&C | Excluding Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | [8] | $ 168,253 | $ 146,566 | ||
Net realized investment gains (losses) | (60,957) | 4,831 | |||
Operating segments | Total P&C | Life Funds Withheld Assets | |||||
Segment Reporting Information [Line Items] | |||||
Net realized investment gains (losses) | 0 | 0 | |||
Operating segments | Insurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 2,866,539 | 2,694,216 | |||
Net premiums written | 1,481,867 | 1,508,591 | |||
Net premiums earned | 1,665,789 | 1,635,315 | |||
Net losses and loss expenses | [1] | 1,064,992 | 1,060,363 | ||
Acquisition costs | 221,962 | 210,483 | [1] | ||
Operating expenses | [2] | 316,380 | 285,729 | ||
Underwriting profit (loss) | 62,455 | 78,740 | |||
Net results from structured products | 2,103 | [3] | 2,269 | [4] | |
Net fee income and other | $ (6,703) | [5] | $ 1,967 | [6] | |
Ratios - P&C operations | |||||
Loss and loss expense ratio | [10] | 63.90% | 64.80% | ||
Underwriting expense ratio | [10] | 32.40% | 30.40% | ||
Combined ratio | [10] | 96.30% | 95.20% | ||
Operating segments | Reinsurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | $ 2,060,601 | $ 1,927,390 | |||
Net premiums written | 1,670,744 | 1,471,169 | |||
Net premiums earned | 931,392 | 884,166 | |||
Net losses and loss expenses | [1] | 557,014 | 523,093 | ||
Acquisition costs | 240,854 | 224,079 | [1] | ||
Operating expenses | [2] | 73,539 | 71,757 | ||
Underwriting profit (loss) | 59,985 | 65,237 | |||
Net results from structured products | 1,308 | [3] | 645 | [4] | |
Net fee income and other | $ 892 | [5] | $ 686 | [6] | |
Ratios - P&C operations | |||||
Loss and loss expense ratio | [10] | 59.80% | 59.20% | ||
Underwriting expense ratio | [10] | 33.80% | 33.40% | ||
Combined ratio | [10] | 93.60% | 92.60% | ||
[1] | The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. | ||||
[2] | Operating expenses of the segments exclude Corporate operating expenses, shown separately. | ||||
[3] | The net results from P&C structured products include net investment income and interest expense of $12.3 million and $8.9 million, respectively. | ||||
[4] | The net results from P&C structured products include net investment income and interest expense of $13.4 million and $10.5 million, respectively. | ||||
[5] | Net fee income and other includes operating expenses of $12.5 million from the Company's loss prevention consulting services business. | ||||
[6] | Net fee income and other includes operating expenses of $11.4 million from the Company's loss prevention consulting services business. | ||||
[7] | Interest expense excludes interest expense related to structured products recorded in the Insurance and Reinsurance segments. | ||||
[8] | Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products. | ||||
[9] | Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. | ||||
[10] | Ratios are based on net premiums earned from P&C operations. |
Segment Information - Net Premi
Segment Information - Net Premiums Earned by Line of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | ||||
Net premiums earned by line of business: | |||||
P&C Operations | $ 2,597,181 | $ 2,519,481 | |||
Life Operations | 3,107 | 3,310 | |||
Total | 2,600,288 | 2,522,791 | |||
Life insurance product line | |||||
Net premiums earned by line of business: | |||||
Life Operations | 3,107 | 3,310 | |||
Total P&C | Professional | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 385,325 | 358,408 | |||
Total P&C | Casualty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 630,973 | 630,829 | |||
Total P&C | Property catastrophe | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 136,503 | 148,406 | |||
Total P&C | Property | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 664,867 | 722,849 | |||
Total P&C | Specialty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 501,911 | 439,313 | |||
Total P&C | Other | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 277,602 | [1] | 219,676 | ||
Corporate and Other | |||||
Net premiums earned by line of business: | |||||
Life Operations | 3,107 | 3,310 | |||
Total | [2] | 3,107 | 3,310 | ||
Corporate and Other | Life insurance product line | |||||
Net premiums earned by line of business: | |||||
Life Operations | 3,107 | 3,310 | |||
Operating segments | Total P&C | |||||
Net premiums earned by line of business: | |||||
Total | 2,597,181 | 2,519,481 | |||
Operating segments | Insurance Segment | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 1,665,789 | 1,635,315 | |||
Total | 1,665,789 | 1,635,315 | |||
Operating segments | Insurance Segment | Professional | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 320,717 | 305,482 | [3] | ||
Operating segments | Insurance Segment | Casualty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 481,010 | 474,195 | [3] | ||
Operating segments | Insurance Segment | Property catastrophe | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 0 | 0 | [3] | ||
Operating segments | Insurance Segment | Property | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 406,778 | 450,503 | [3] | ||
Operating segments | Insurance Segment | Specialty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 457,650 | 402,687 | [3] | ||
Operating segments | Insurance Segment | Other | |||||
Net premiums earned by line of business: | |||||
P&C Operations | (366) | [1] | 2,448 | [3] | |
Operating segments | Reinsurance Segment | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 931,392 | 884,166 | |||
Total | 931,392 | 884,166 | |||
Operating segments | Reinsurance Segment | Professional | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 64,608 | 52,926 | |||
Operating segments | Reinsurance Segment | Casualty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 149,963 | 156,634 | |||
Operating segments | Reinsurance Segment | Property catastrophe | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 136,503 | 148,406 | |||
Operating segments | Reinsurance Segment | Property | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 258,089 | 272,346 | |||
Operating segments | Reinsurance Segment | Specialty | |||||
Net premiums earned by line of business: | |||||
P&C Operations | 44,261 | 36,626 | |||
Operating segments | Reinsurance Segment | Other | |||||
Net premiums earned by line of business: | |||||
P&C Operations | $ 277,968 | [1] | $ 217,228 | ||
[1] | Other within the Insurance segment includes: surety and certain discontinued lines. Other within the Reinsurance segment includes multiline, whole account contracts, credit and surety, accident and health and other lines. | ||||
[2] | Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit (loss) and its components within this section are predominantly driven from the Company's run-off life operations. | ||||
[3] | Amounts from the prior year have been re-presented to reflect current mapping of underlying lines of business to be consistent with the manner in which they are reflected in the current period. The most significant movements include movements out of Other are in the Insurance segment, and include: livestock business into Specialty; and credit surety into Casualty. |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($)segments | Mar. 31, 2017USD ($) | |||
Segment Reporting Information [Line Items] | ||||
Number of segments | segments | 2 | |||
Net results from structured products | $ 3,411 | [1] | $ 2,914 | [2] |
Net fee income and other | (5,742) | [3] | 2,215 | [4] |
Other operating expense | ||||
Segment Reporting Information [Line Items] | ||||
Net fee income and other | (12,500) | (11,400) | ||
Total P&C | Net investment income | ||||
Segment Reporting Information [Line Items] | ||||
Net results from structured products | 12,300 | 13,400 | ||
Total P&C | Interest expense | ||||
Segment Reporting Information [Line Items] | ||||
Net results from structured products | $ (8,900) | $ (10,500) | ||
[1] | The net results from P&C structured products include net investment income and interest expense of $12.3 million and $8.9 million, respectively. | |||
[2] | The net results from P&C structured products include net investment income and interest expense of $13.4 million and $10.5 million, respectively. | |||
[3] | Net fee income and other includes operating expenses of $12.5 million from the Company's loss prevention consulting services business. | |||
[4] | Net fee income and other includes operating expenses of $11.4 million from the Company's loss prevention consulting services business. |
Investments - Cost (amortized c
Investments - Cost (amortized cost for fixed maturities and short-term investments), fair value, gross unrealized gains, gross unrealized (losses), and OTTI recorded in AOCI (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | $ 30,268,346 | $ 30,157,581 | |
Fixed maturities AFS | 30,656,628 | 30,928,988 | |
Non-credit Related OTTI | [1] | (39,934) | (43,646) |
Amortized cost of short-term investments, available for sale | 500,844 | 816,638 | |
Short-term investments, at fair value | 500,170 | 815,481 | |
Available-for-sale Securities, Amortized Cost Basis | 30,769,190 | 31,612,674 | |
Available for sale securities, Gross unrealized gains | 787,275 | 1,045,012 | |
Available for sale securities, Gross unrealized losses | (399,667) | (199,250) | |
Total investments available for sale | 31,156,798 | 32,458,436 | |
Excluding Life Funds Withheld Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 28,668,435 | 28,569,530 | |
Gross unrealized gains on Fixed maturities | 377,865 | 524,528 | |
Gross unrealized losses on Fixed maturities | (398,220) | (192,182) | |
Fixed maturities AFS | 28,648,080 | 28,901,876 | |
Non-credit Related OTTI | [1] | (39,934) | (43,646) |
Amortized cost of short-term investments, available for sale | 500,844 | 816,638 | |
Short term investments, gross unrealized gains | 773 | 744 | |
Short term investments, gross unrealized losses | (1,447) | (1,901) | |
Short-term investments, at fair value | 500,170 | 815,481 | |
Cost of equity securities | 638,455 | ||
Equity securities, gross unrealized gains | 80,679 | ||
Equity securities, gross unrealized losses | (5,167) | ||
Equity securities, at fair value | 713,967 | ||
Available-for-sale Securities, Amortized Cost Basis | 29,169,279 | 30,024,623 | |
Available for sale securities, Gross unrealized gains | 378,638 | 605,951 | |
Available for sale securities, Gross unrealized losses | (399,667) | (199,250) | |
Total investments available for sale | 29,148,250 | 30,431,324 | |
Excluding Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 4,207,380 | 4,358,503 | |
Gross unrealized gains on Fixed maturities | 29,290 | 37,782 | |
Gross unrealized losses on Fixed maturities | (48,711) | (33,545) | |
Fixed maturities AFS | 4,187,959 | 4,362,740 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Excluding Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 1,953,202 | 1,977,796 | |
Gross unrealized gains on Fixed maturities | 63,586 | 87,832 | |
Gross unrealized losses on Fixed maturities | (3,626) | (988) | |
Fixed maturities AFS | 2,013,162 | 2,064,640 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Excluding Life Funds Withheld Assets | Non-U.S. Governments | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 5,260,650 | 5,135,526 | |
Gross unrealized gains on Fixed maturities | 98,496 | 114,918 | |
Gross unrealized losses on Fixed maturities | (52,495) | (48,863) | |
Fixed maturities AFS | 5,306,651 | 5,201,581 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Excluding Life Funds Withheld Assets | Corporate | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 9,759,732 | 9,644,799 | |
Gross unrealized gains on Fixed maturities | 131,175 | 207,668 | |
Gross unrealized losses on Fixed maturities | (148,237) | (57,334) | |
Fixed maturities AFS | 9,742,670 | 9,795,133 | |
Non-credit Related OTTI | [1] | 0 | (18) |
Excluding Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 4,606,275 | 4,717,542 | |
Gross unrealized gains on Fixed maturities | 26,883 | 41,983 | |
Gross unrealized losses on Fixed maturities | (103,435) | (35,123) | |
Fixed maturities AFS | 4,529,723 | 4,724,402 | |
Non-credit Related OTTI | [1] | (8,434) | (8,795) |
Excluding Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 1,292,559 | 1,246,406 | |
Gross unrealized gains on Fixed maturities | 2,263 | 7,468 | |
Gross unrealized losses on Fixed maturities | (35,303) | (9,857) | |
Fixed maturities AFS | 1,259,519 | 1,244,017 | |
Non-credit Related OTTI | [1] | (736) | (817) |
Excluding Life Funds Withheld Assets | Other asset-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 1,588,637 | 1,488,958 | |
Gross unrealized gains on Fixed maturities | 26,172 | 26,877 | |
Gross unrealized losses on Fixed maturities | (6,413) | (6,472) | |
Fixed maturities AFS | 1,608,396 | 1,509,363 | |
Non-credit Related OTTI | [1] | (30,764) | (34,016) |
Life Funds Withheld Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 1,599,911 | 1,588,051 | |
Gross unrealized gains on Fixed maturities | 408,637 | 439,061 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 2,008,548 | 2,027,112 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 9,420 | 9,050 | |
Gross unrealized gains on Fixed maturities | 2,196 | 2,266 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 11,616 | 11,316 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | Non-U.S. Governments | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 432,390 | 433,664 | |
Gross unrealized gains on Fixed maturities | 152,016 | 150,870 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 584,406 | 584,534 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | Corporate | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 919,151 | 909,589 | |
Gross unrealized gains on Fixed maturities | 202,052 | 227,624 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 1,121,203 | 1,137,213 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 455 | 448 | |
Gross unrealized gains on Fixed maturities | 48 | 67 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 503 | 515 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 105,505 | 97,356 | |
Gross unrealized gains on Fixed maturities | 24,565 | 24,916 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 130,070 | 122,272 | |
Non-credit Related OTTI | [1] | 0 | 0 |
Life Funds Withheld Assets | Other asset-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost of fixed maturities | 132,990 | 137,944 | |
Gross unrealized gains on Fixed maturities | 27,760 | 33,318 | |
Gross unrealized losses on Fixed maturities | 0 | 0 | |
Fixed maturities AFS | 160,750 | 171,262 | |
Non-credit Related OTTI | [1] | $ 0 | $ 0 |
[1] | Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. |
Investments - Amortized cost an
Investments - Amortized cost and fair value of trading securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | $ 2,055,722 | $ 1,946,501 |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 |
Amortized cost of short-term investments, trading | 7,428 | 14,969 |
Short-term investments, trading at fair value | 7,425 | 14,965 |
Life Funds Withheld Assets | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 2,055,722 | 1,946,501 |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 |
Amortized cost of short-term investments, trading | 7,428 | 14,969 |
Short-term investments, trading at fair value | 7,425 | 14,965 |
Trading securities, cost | 2,063,150 | 1,961,470 |
Total investments trading | 2,091,676 | 2,021,350 |
Life Funds Withheld Assets | U.S. Government and Government Agencies | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 9,729 | 11,640 |
Fixed maturities, trading at fair value | 9,320 | 11,042 |
Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 30 | |
Fixed maturities, trading at fair value | 31 | |
Life Funds Withheld Assets | Non-U.S. Governments | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 485,495 | 473,849 |
Fixed maturities, trading at fair value | 497,108 | 485,171 |
Life Funds Withheld Assets | Corporate | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 1,507,879 | 1,412,846 |
Fixed maturities, trading at fair value | 1,525,761 | 1,460,292 |
Life Funds Withheld Assets | Residential mortgage-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 1,023 | 1,020 |
Fixed maturities, trading at fair value | 893 | 932 |
Life Funds Withheld Assets | Commercial mortgage-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 7,358 | 7,345 |
Fixed maturities, trading at fair value | 7,472 | 7,580 |
Life Funds Withheld Assets | Other asset-backed securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized cost of fixed maturities, trading | 44,238 | 39,771 |
Fixed maturities, trading at fair value | $ 43,697 | $ 41,337 |
Investments - Contractual matur
Investments - Contractual maturities of available for sale securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fixed Maturities - AFS | ||
Amortized cost of fixed maturities | $ 30,268,346 | $ 30,157,581 |
Fixed maturities, at fair value | 30,656,628 | 30,928,988 |
Trading Securities [Abstract] | ||
Amortized cost of fixed maturities, trading | 2,055,722 | 1,946,501 |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 |
Excluding Life Funds Withheld Assets | ||
Fixed Maturities - AFS | ||
Due less than one year, amortized cost | 1,716,039 | 1,556,688 |
Due less than one year, fair value | 1,717,129 | 1,564,360 |
Due after 1 through 5 years, amortized cost | 12,520,942 | 12,243,590 |
Due after 1 through 5 years, fair value | 12,501,887 | 12,309,732 |
Due after 5 through 10 years, amortized cost | 5,882,207 | 6,268,217 |
Due after 5 through 10 years, fair value | 5,876,041 | 6,362,314 |
Due after 10 years, amortized cost | 1,061,776 | 1,048,129 |
Due after 10 years, fair value | 1,155,385 | 1,187,688 |
Subtotal - amortized cost | 21,180,964 | 21,116,624 |
Subtotal - fair value | 21,250,442 | 21,424,094 |
Mortgage and asset backed securities - amortized cost | 7,487,471 | 7,452,906 |
Mortgage and asset backed securities - fair value | 7,397,638 | 7,477,782 |
Amortized cost of fixed maturities | 28,668,435 | 28,569,530 |
Fixed maturities, at fair value | 28,648,080 | 28,901,876 |
Excluding Life Funds Withheld Assets | Residential mortgage-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 4,606,275 | 4,717,542 |
Mortgage and asset backed securities - fair value | 4,529,723 | 4,724,402 |
Amortized cost of fixed maturities | 4,606,275 | 4,717,542 |
Fixed maturities, at fair value | 4,529,723 | 4,724,402 |
Excluding Life Funds Withheld Assets | Commercial mortgage-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 1,292,559 | 1,246,406 |
Mortgage and asset backed securities - fair value | 1,259,519 | 1,244,017 |
Amortized cost of fixed maturities | 1,292,559 | 1,246,406 |
Fixed maturities, at fair value | 1,259,519 | 1,244,017 |
Excluding Life Funds Withheld Assets | Other asset-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 1,588,637 | 1,488,958 |
Mortgage and asset backed securities - fair value | 1,608,396 | 1,509,363 |
Amortized cost of fixed maturities | 1,588,637 | 1,488,958 |
Fixed maturities, at fair value | 1,608,396 | 1,509,363 |
Life Funds Withheld Assets | ||
Fixed Maturities - AFS | ||
Due less than one year, amortized cost | 66,237 | 47,143 |
Due less than one year, fair value | 68,315 | 49,233 |
Due after 1 through 5 years, amortized cost | 274,247 | 286,524 |
Due after 1 through 5 years, fair value | 296,715 | 313,227 |
Due after 5 through 10 years, amortized cost | 167,949 | 168,897 |
Due after 5 through 10 years, fair value | 201,133 | 205,536 |
Due after 10 years, amortized cost | 852,528 | 849,739 |
Due after 10 years, fair value | 1,151,062 | 1,165,067 |
Subtotal - amortized cost | 1,360,961 | 1,352,303 |
Subtotal - fair value | 1,717,225 | 1,733,063 |
Mortgage and asset backed securities - amortized cost | 238,950 | 235,748 |
Mortgage and asset backed securities - fair value | 291,323 | 294,049 |
Amortized cost of fixed maturities | 1,599,911 | 1,588,051 |
Fixed maturities, at fair value | 2,008,548 | 2,027,112 |
Trading Securities [Abstract] | ||
Amortized cost of fixed maturities, trading | 2,055,722 | 1,946,501 |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 |
Life Funds Withheld Assets | Residential mortgage-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 455 | 448 |
Mortgage and asset backed securities - fair value | 503 | 515 |
Amortized cost of fixed maturities | 455 | 448 |
Fixed maturities, at fair value | 503 | 515 |
Trading Securities [Abstract] | ||
Amortized cost of fixed maturities, trading | 1,023 | 1,020 |
Fixed maturities, trading at fair value | 893 | 932 |
Life Funds Withheld Assets | Commercial mortgage-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 105,505 | 97,356 |
Mortgage and asset backed securities - fair value | 130,070 | 122,272 |
Amortized cost of fixed maturities | 105,505 | 97,356 |
Fixed maturities, at fair value | 130,070 | 122,272 |
Trading Securities [Abstract] | ||
Amortized cost of fixed maturities, trading | 7,358 | 7,345 |
Fixed maturities, trading at fair value | 7,472 | 7,580 |
Life Funds Withheld Assets | Other asset-backed securities | ||
Fixed Maturities - AFS | ||
Mortgage and asset backed securities - amortized cost | 132,990 | 137,944 |
Mortgage and asset backed securities - fair value | 160,750 | 171,262 |
Amortized cost of fixed maturities | 132,990 | 137,944 |
Fixed maturities, at fair value | 160,750 | 171,262 |
Trading Securities [Abstract] | ||
Amortized cost of fixed maturities, trading | 44,238 | 39,771 |
Fixed maturities, trading at fair value | 43,697 | 41,337 |
Life Funds Withheld Assets | Cost | ||
Trading Securities [Abstract] | ||
Due less than one year | 66,532 | 59,962 |
Due after 1 through 5 years | 493,369 | 486,847 |
Due after 5 through 10 years | 691,074 | 645,573 |
Due after 10 years | 752,128 | 705,983 |
Subtotal | 2,003,103 | 1,898,365 |
Mortgage and asset-backed securities | 52,619 | 48,136 |
Amortized cost of fixed maturities, trading | 2,055,722 | 1,946,501 |
Life Funds Withheld Assets | Cost | Residential mortgage-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | 1,023 | 1,020 |
Life Funds Withheld Assets | Cost | Commercial mortgage-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | 7,358 | 7,345 |
Life Funds Withheld Assets | Cost | Other asset-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | 44,238 | 39,771 |
Life Funds Withheld Assets | Fair value | ||
Trading Securities [Abstract] | ||
Due less than one year | 65,428 | 59,605 |
Due after 1 through 5 years | 495,899 | 492,998 |
Due after 5 through 10 years | 690,354 | 657,093 |
Due after 10 years | 780,508 | 746,840 |
Subtotal | 2,032,189 | 1,956,536 |
Mortgage and asset-backed securities | 52,062 | 49,849 |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 |
Life Funds Withheld Assets | Fair value | Residential mortgage-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | 893 | 932 |
Life Funds Withheld Assets | Fair value | Commercial mortgage-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | 7,472 | 7,580 |
Life Funds Withheld Assets | Fair value | Other asset-backed securities | ||
Trading Securities [Abstract] | ||
Mortgage and asset-backed securities | $ 43,697 | $ 41,337 |
Investments - Analysis of conti
Investments - Analysis of continual unrealized loss position (Details) - Excluding Life Funds Withheld Assets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Total fixed maturities and short-term investments AFS | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | $ 15,292,801 | $ 10,300,927 |
Less than 12 months Gross Unrealized Losses | (279,115) | (82,110) |
Equal to or greater than 12 months Fair Value | 2,639,386 | 3,089,852 |
Equal to greater than 12 months Gross Unrealized Losses | (120,552) | (111,973) |
U.S. Government and Government Agencies | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 3,080,855 | 2,687,083 |
Less than 12 months Gross Unrealized Losses | (38,758) | (21,514) |
Equal to or greater than 12 months Fair Value | 515,999 | 727,246 |
Equal to greater than 12 months Gross Unrealized Losses | (11,350) | (13,902) |
US States, municipalities and political subdivisions of the States | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 278,946 | 88,235 |
Less than 12 months Gross Unrealized Losses | (3,222) | (622) |
Equal to or greater than 12 months Fair Value | 15,869 | 19,583 |
Equal to greater than 12 months Gross Unrealized Losses | (404) | (366) |
Non-U.S. Governments | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 2,061,869 | 1,527,323 |
Less than 12 months Gross Unrealized Losses | (25,703) | (14,959) |
Equal to or greater than 12 months Fair Value | 487,103 | 560,648 |
Equal to greater than 12 months Gross Unrealized Losses | (26,836) | (33,931) |
Corporate | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 5,509,770 | 2,959,416 |
Less than 12 months Gross Unrealized Losses | (114,092) | (25,757) |
Equal to or greater than 12 months Fair Value | 510,757 | 543,973 |
Equal to greater than 12 months Gross Unrealized Losses | (34,148) | (31,577) |
Residential mortgage-backed securities | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 2,973,309 | 2,198,391 |
Less than 12 months Gross Unrealized Losses | (68,157) | (14,030) |
Equal to or greater than 12 months Fair Value | 846,423 | 925,191 |
Equal to greater than 12 months Gross Unrealized Losses | (35,278) | (21,093) |
Commercial mortgage-backed securities | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 991,765 | 583,656 |
Less than 12 months Gross Unrealized Losses | (26,681) | (4,117) |
Equal to or greater than 12 months Fair Value | 131,116 | 138,065 |
Equal to greater than 12 months Gross Unrealized Losses | (8,622) | (5,740) |
Other asset-backed securities | ||
Fixed maturities and short-term investments - AFS: | ||
Less than 12 months Fair Value | 396,287 | 256,823 |
Less than 12 months Gross Unrealized Losses | (2,502) | (1,111) |
Equal to or greater than 12 months Fair Value | 132,119 | 175,146 |
Equal to greater than 12 months Gross Unrealized Losses | $ (3,914) | $ (5,364) |
Investments - Analysis of net r
Investments - Analysis of net realized gains (losses) and the change in unrealized (losses) gains on investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Realized investment gains (losses): | |||
OTTI on investments, net of amounts transferred to other comprehensive income | $ (1,806) | $ (6,874) | |
Total realized investment gains (losses) | (83,355) | 37,286 | |
Excluding Life Funds Withheld Assets | |||
Realized investment gains (losses): | |||
Gross realized gains | 19,330 | 39,397 | [1] |
Gross realized losses | (51,002) | (28,305) | [1] |
OTTI on investments, net of amounts transferred to other comprehensive income | (1,806) | (6,874) | [1] |
Total realized investment gains (losses) | (33,478) | 4,218 | [1] |
Equity Securities, FV-NI, Realized Gain | 9,693 | 0 | |
Equity Securities, FV-NI, Realized Loss | (126) | 0 | |
Equity Securities, FV-NI, Unrealized Gain (Loss) | (45,581) | 0 | |
Net realized and change in net unrealized gains (losses) on equity securities | (36,014) | 0 | |
Other Investments, FV-NI, Realized Gain | 3,004 | 0 | |
Other Investments, FV-NI, Realized Loss | (1,163) | 0 | |
Other Investments, FV-NI, Unrealized Gain (Loss) | 6,808 | 0 | |
Net realized and change in net unrealized gains (losses) on other investments | 8,649 | 0 | |
Life Funds Withheld Assets | |||
Realized investment gains (losses): | |||
Gross realized gains | 12,909 | 35,151 | |
Gross realized losses | (2,551) | (677) | |
OTTI on investments, net of amounts transferred to other comprehensive income | (1,203) | 0 | |
Change in net unrealized gains (losses) on trading securities | (31,667) | (1,406) | |
Total realized investment gains (losses) | $ (22,512) | $ 33,068 | |
[1] | AFS in the prior year includes net realized gains (losses) on equity securities and other investments. Due to the implementation of ASU 2016-01, as described in in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements," the net realized gains (losses) on these investments are shown separately. |
Investments - Schedule of other
Investments - Schedule of other than temporary impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI on investments, net of amounts transferred to other comprehensive income | $ 1,806 | $ 6,874 | |
Credit loss impairments | Fixed maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI on investments, net of amounts transferred to other comprehensive income | 765 | 226 | |
Impaired more than 11 months or more than 50% | Equities and other investments | |||
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI on investments, net of amounts transferred to other comprehensive income | 0 | 4,975 | |
Excluding Life Funds Withheld Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI on investments, net of amounts transferred to other comprehensive income | 1,806 | 6,874 | [1] |
Excluding Life Funds Withheld Assets | Currency losses | |||
Schedule of Available-for-sale Securities [Line Items] | |||
OTTI on investments, net of amounts transferred to other comprehensive income | $ 1,041 | $ 1,673 | |
[1] | AFS in the prior year includes net realized gains (losses) on equity securities and other investments. Due to the implementation of ASU 2016-01, as described in in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements," the net realized gains (losses) on these investments are shown separately. |
Investments - Credit loss impai
Investments - Credit loss impairments on fixed income securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Balance, beginning of period | $ 43,332 | $ 61,595 |
Credit loss impairment recognized in the current period on securities not previously impaired | 590 | 124 |
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period | (1,156) | (836) |
Additional credit loss impairments recognized in the current period on securities previously impaired | 175 | 102 |
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected | (1,475) | (2,357) |
Balance, end of period | $ 41,466 | $ 58,628 |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | Mar. 31, 2018USD ($)positions | Dec. 31, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | ||
Percentage of Fixed Income Investment portfolio invested in below investment grade or not rated | 3.50% | 3.30% |
Percentage of Gross Unrealized losses in Fixed income securities portfolio related to securities below investment grade or not rated | 3.50% | 4.20% |
Pledged Assets Separately Reported, Other Debt Securities Available-for-sale or Held-for-investment | $ 17,900,000 | $ 18,800,000 |
Available for sale securities, Gross unrealized losses | 399,667 | 199,250 |
Excluding Life Funds Withheld Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale securities, Gross unrealized losses | $ 399,667 | $ 199,250 |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | positions | 4,061 | |
Available-for-sale Securities, Qualitative Disclosure, Number of Positions | positions | 7,851 |
Derivative Instruments - Gross
Derivative Instruments - Gross amounts of derivative fair values contained in the consolidated balance sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Derivatives, Fair Value [Line Items] | |||
Gross amounts recognized in balance sheet | $ 35,903 | $ 32,794 | |
Gross amounts recognized in balance sheet | 47,401 | 62,896 | |
Counterparty netting, assets | (7,239) | (3,579) | |
Counterparty netting, liabilities | (7,239) | (3,579) | |
Asset derivative fair value | 28,664 | 29,215 | |
Liability derivative fair value | 40,162 | 59,317 | |
Gross amounts not offset in the balance sheet - cash collateral | [1] | (6,060) | (3,920) |
Derivative, Collateral, Right to Reclaim Cash | [1] | (17,338) | (1,312) |
Derivative Asset | 22,604 | 25,295 | |
Derivative Liability | 22,824 | 58,005 | |
Derivatives designated as hedging instruments | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 585,573 | 580,194 | |
Gross amounts recognized in balance sheet | 15,155 | 5,655 | |
Liability derivative notional amount | 534,856 | 339,221 | |
Gross amounts recognized in balance sheet | 15,025 | 3,968 | |
Derivatives designated as hedging instruments | Foreign currency exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 585,573 | 580,194 | |
Gross amounts recognized in balance sheet | 15,155 | 5,655 | |
Liability derivative notional amount | 534,856 | 339,221 | |
Gross amounts recognized in balance sheet | 15,025 | 3,968 | |
Derivatives not designated as hedging instruments | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 1,011,521 | 584,522 | |
Gross amounts recognized in balance sheet | 20,748 | 27,139 | |
Liability derivative notional amount | 4,925,428 | 5,269,279 | |
Gross amounts recognized in balance sheet | 32,376 | 58,928 | |
Derivatives not designated as hedging instruments | Investment related derivatives | Interest rate exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 0 | 181,975 | |
Gross amounts recognized in balance sheet | 0 | 423 | |
Liability derivative notional amount | 238,215 | 0 | |
Gross amounts recognized in balance sheet | 726 | 0 | |
Derivatives not designated as hedging instruments | Investment related derivatives | Foreign currency exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 33,070 | 263,722 | |
Gross amounts recognized in balance sheet | 313 | 6,931 | |
Liability derivative notional amount | 336,055 | 141,300 | |
Gross amounts recognized in balance sheet | 3,674 | 2,256 | |
Derivatives not designated as hedging instruments | Investment related derivatives | Credit exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 5,000 | 5,000 | |
Gross amounts recognized in balance sheet | 128 | 187 | |
Liability derivative notional amount | 45,000 | 45,000 | |
Gross amounts recognized in balance sheet | 6,262 | 6,784 | |
Derivatives not designated as hedging instruments | Investment related derivatives | Financial market exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 0 | 30,001 | |
Gross amounts recognized in balance sheet | 0 | 1,271 | |
Liability derivative notional amount | 40,823 | 6,998 | |
Gross amounts recognized in balance sheet | 3,873 | 42 | |
Derivatives not designated as hedging instruments | Other non-investment derivatives | Credit exposure | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 20,242 | 0 | |
Gross amounts recognized in balance sheet | 334 | 0 | |
Liability derivative notional amount | 0 | 25,526 | |
Gross amounts recognized in balance sheet | 0 | 169 | |
Derivatives not designated as hedging instruments | Other non-investment derivatives | Guaranteed minimum income benefit contract | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 35,288 | 36,171 | |
Gross amounts recognized in balance sheet | 17,841 | 18,136 | |
Liability derivative notional amount | 35,288 | 36,171 | |
Gross amounts recognized in balance sheet | 17,841 | 18,136 | |
Derivatives not designated as hedging instruments | Other non-investment derivatives | Modified coinsurance and funds withheld contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | [2] | 917,921 | 51,653 |
Gross amounts recognized in balance sheet | [2] | 2,132 | 0 |
Liability derivative notional amount | [2] | 4,230,047 | 5,014,284 |
Gross amounts recognized in balance sheet | [2] | 0 | 31,541 |
Derivatives not designated as hedging instruments | Other non-investment derivatives | Other | |||
Derivatives, Fair Value [Line Items] | |||
Asset derivative notional amount | 0 | 16,000 | |
Gross amounts recognized in balance sheet | 0 | 191 | |
Liability derivative notional amount | 0 | 0 | |
Gross amounts recognized in balance sheet | $ 0 | $ 0 | |
[1] | At March 31, 2018, the Company held cash collateral related to foreign currency derivative positions and certain other derivative positions of $6.1 million for derivatives in an asset position and paid cash collateral of $17.3 million for derivatives in a liability position. At December 31, 2017, the Company held cash collateral related to a foreign currency derivative position and certain other derivative positions of $3.9 million for derivatives in an asset position and paid cash collateral of $1.3 million for derivatives in a liability position. The assets and liabilities related to the net collateral paid or held were recorded as Other assets and Other liabilities within the Unaudited Consolidated Balance Sheets as the collateral and derivative positions are not intended to be settled on a net basis. | ||
[2] | The fair value movements in derivative assets and liabilities relating to modified coinsurance and funds withheld contracts are included within the associated asset or liability at each period end on the face of the Unaudited Consolidated Balance Sheets. Notional amounts associated with reinsurance agreements under which the Company assumes reinsurance risk are recorded as asset derivative notional amounts. Notional amounts associated with the GreyCastle Life Retro Arrangements and other outward reinsurance contracts under which the Company cedes risk are recorded as liability derivative notional amounts. Included in the liability derivative notional amount at March 31, 2018 is the cumulative net realized and unrealized loss on the life retrocession embedded derivative of $1.1 billion |
Derivative Instruments - Deriva
Derivative Instruments - Derivative instruments designated as hedges of the net investment in a foreign operation - Summary (Details) - Derivatives designated as hedging instruments - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Derivative [Line Items] | |||
Weighted average of U.S. dollar equivalent of foreign denominated net assets | $ 1,094,210 | $ 1,677,145 | |
Derivative gains (losses) | [1] | $ (2,323) | $ 29,398 |
[1] | Derivative gains (losses) from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in the cumulative translation adjustment account within AOCI for each period. |
Derivative Instruments - Net Re
Derivative Instruments - Net Realized and unrealized gains (losses) on derivative instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Net realized and unrealized gains (losses) on derivative instruments | $ 4,221 | $ (7,069) |
Derivatives not designated as hedging instruments | Investment related derivatives | ||
Derivative [Line Items] | ||
Interest rate exposure | 997 | (214) |
Foreign currency exposure | (3,318) | (745) |
Credit exposure | (41) | (854) |
Financial market exposure | (1,348) | 185 |
Derivatives not designated as hedging instruments | Other non-investment derivatives | ||
Derivative [Line Items] | ||
Foreign currency exposure | 0 | (1,210) |
Credit exposure | 615 | 632 |
Modified coinsurance and funds withheld contracts, including life retrocession embedded derivative | 2,492 | (3,925) |
Other | 4,824 | (938) |
Life Funds Withheld Assets | ||
Derivative [Line Items] | ||
Net realized and unrealized gains (losses) on derivative instruments | $ 22,921 | $ (50,101) |
Derivative Instruments - Impact
Derivative Instruments - Impact of life retro arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Derivative [Line Items] | ||||
Underwriting profit (loss) | $ 114,088 | $ 138,456 | ||
Net investment income | 218,481 | 200,532 | ||
Foreign exchange gains (losses) | (9,841) | 3,336 | ||
Other income and expenses | (5,742) | [1] | 2,215 | [2] |
Net realized and unrealized gains (losses) on life retrocession embedded derivative | 4,221 | (7,069) | ||
Net income (loss) | 161,233 | 213,849 | ||
Change in adjustments related to future policy benefit reserves, net of tax | 4,164 | 5,132 | ||
Foreign currency translation adjustments, net of tax | (2,432) | 41,938 | ||
Comprehensive income (loss) | (359,223) | 129,428 | ||
Life Funds Withheld Assets | ||||
Derivative [Line Items] | ||||
Net investment income | 30,398 | 33,364 | ||
Net unrealized gains (losses) on investments, trading | (31,667) | (1,406) | ||
Other-than-temporary impairments | (1,203) | 0 | ||
Net realized and unrealized gains (losses) on life retrocession embedded derivative | 22,921 | (50,101) | ||
Change in net unrealized gains (losses) on investments AFS, net of tax | (35,754) | (20,108) | ||
Grey Castle Life Reinsurance SAC Ltd | Life Funds Withheld Assets | ||||
Derivative [Line Items] | ||||
Underwriting profit (loss) | 0 | 0 | ||
Net investment income | 30,398 | 33,364 | ||
Net realized gains (losses) on investments AFS | 10,358 | 34,474 | ||
Net unrealized gains (losses) on investments, trading | (31,667) | (1,406) | ||
Other-than-temporary impairments | (1,203) | 0 | ||
Foreign exchange gains (losses) | 10,719 | 3,294 | ||
Other income and expenses | (36) | (70) | ||
Net realized and unrealized gains (losses) on life retrocession embedded derivative | 22,921 | (50,101) | ||
Net income (loss) | 41,490 | 19,555 | ||
Change in net unrealized gains (losses) on investments AFS, net of tax | (35,754) | (20,108) | ||
Change in adjustments related to future policy benefit reserves, net of tax | 4,164 | 5,132 | ||
Foreign currency translation adjustments, net of tax | (9,900) | (4,579) | ||
Total changes to other comprehensive income as a result of GreyCastle Life Retro Arrangements | (41,490) | (19,555) | ||
Comprehensive income (loss) | $ 0 | $ 0 | ||
[1] | Net fee income and other includes operating expenses of $12.5 million from the Company's loss prevention consulting services business. | |||
[2] | Net fee income and other includes operating expenses of $11.4 million from the Company's loss prevention consulting services business. |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of settlement of fair value hedges (Details) - Fair value hedging - Deposit liabilities - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Cumulative reduction to interest expense | $ 124,255 | $ 122,118 |
Remaining balance | $ 108,940 | $ 111,077 |
Weighted average years remaining to maturity | 18 years 3 months | 18 years 8 months 12 days |
Derivative Instruments - Summar
Derivative Instruments - Summary of contingent credit features (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Collateral posted to counterparty | [1] | $ 17,338 | $ 1,312 |
Contracts with downgrade provisions [Member] | |||
Derivative [Line Items] | |||
Aggregate fair value of derivative agreements with downgrade provisions in a net liability position | (7,872) | 7,464 | |
Collateral posted to counterparty | $ 6,720 | $ 40 | |
[1] | At March 31, 2018, the Company held cash collateral related to foreign currency derivative positions and certain other derivative positions of $6.1 million for derivatives in an asset position and paid cash collateral of $17.3 million for derivatives in a liability position. At December 31, 2017, the Company held cash collateral related to a foreign currency derivative position and certain other derivative positions of $3.9 million for derivatives in an asset position and paid cash collateral of $1.3 million for derivatives in a liability position. The assets and liabilities related to the net collateral paid or held were recorded as Other assets and Other liabilities within the Unaudited Consolidated Balance Sheets as the collateral and derivative positions are not intended to be settled on a net basis. |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Thousands | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2012Contracts | |
Derivative [Line Items] | ||||
Gross amounts not offset in the balance sheet - cash collateral | [1] | $ 6,060 | $ 3,920 | |
Derivative, Collateral, Right to Reclaim Cash | [1] | 17,338 | $ 1,312 | |
Number of Derivative Contracts Settled | Contracts | 5 | |||
Life Funds Withheld Assets | ||||
Derivative [Line Items] | ||||
Cumulative net realized and unrealized loss on life retrocession embedded derivative | $ 1,100,000 | |||
[1] | At March 31, 2018, the Company held cash collateral related to foreign currency derivative positions and certain other derivative positions of $6.1 million for derivatives in an asset position and paid cash collateral of $17.3 million for derivatives in a liability position. At December 31, 2017, the Company held cash collateral related to a foreign currency derivative position and certain other derivative positions of $3.9 million for derivatives in an asset position and paid cash collateral of $1.3 million for derivatives in a liability position. The assets and liabilities related to the net collateral paid or held were recorded as Other assets and Other liabilities within the Unaudited Consolidated Balance Sheets as the collateral and derivative positions are not intended to be settled on a net basis. |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of assets and liabilities that were accounted for at fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Assets | |||
Fixed maturities AFS | $ 30,656,628 | $ 30,928,988 | |
Short-term investments, at fair value | 500,170 | 815,481 | |
Total investments available for sale | 31,156,798 | 32,458,436 | |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |
Short-term investments, trading at fair value | 7,425 | 14,965 | |
Equity securities, at fair value | 637,872 | 713,967 | |
Counterparty netting, assets | (7,239) | (3,579) | |
Liabilities | |||
Funds withheld on GreyCastle life retrocession arrangements | 989,140 | 999,219 | |
Counterparty netting, liabilities | (7,239) | (3,579) | |
Excluding Life Funds Withheld Assets | |||
Assets | |||
Fixed maturities AFS | 28,648,080 | 28,901,876 | |
Short-term investments, at fair value | 500,170 | 815,481 | |
Equity securities, at fair value | 713,967 | ||
Total investments available for sale | 29,148,250 | 30,431,324 | |
Excluding Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 4,187,959 | 4,362,740 | |
Excluding Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities AFS | 2,013,162 | 2,064,640 | |
Excluding Life Funds Withheld Assets | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 5,306,651 | 5,201,581 | |
Excluding Life Funds Withheld Assets | Corporate | |||
Assets | |||
Fixed maturities AFS | 9,742,670 | 9,795,133 | |
Excluding Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 4,529,723 | 4,724,402 | |
Excluding Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,259,519 | 1,244,017 | |
Excluding Life Funds Withheld Assets | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,608,396 | 1,509,363 | |
Life Funds Withheld Assets | |||
Assets | |||
Fixed maturities AFS | 2,008,548 | 2,027,112 | |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |
Short-term investments, trading at fair value | 7,425 | 14,965 | |
Total investments trading | 2,091,676 | 2,021,350 | |
Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 11,616 | 11,316 | |
Fixed maturities, trading at fair value | 9,320 | 11,042 | |
Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities, trading at fair value | 31 | ||
Life Funds Withheld Assets | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 584,406 | 584,534 | |
Fixed maturities, trading at fair value | 497,108 | 485,171 | |
Life Funds Withheld Assets | Corporate | |||
Assets | |||
Fixed maturities AFS | 1,121,203 | 1,137,213 | |
Fixed maturities, trading at fair value | 1,525,761 | 1,460,292 | |
Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 503 | 515 | |
Fixed maturities, trading at fair value | 893 | 932 | |
Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 130,070 | 122,272 | |
Fixed maturities, trading at fair value | 7,472 | 7,580 | |
Life Funds Withheld Assets | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 160,750 | 171,262 | |
Fixed maturities, trading at fair value | 43,697 | 41,337 | |
Recurring | |||
Assets | |||
Total investments available for sale | 31,156,798 | 32,458,436 | |
Cash equivalents | [1] | 1,931,733 | 1,550,707 |
Other investments | [2] | 812,314 | 792,639 |
Other assets | [3] | 28,664 | 29,215 |
Total assets accounted for at fair value | 36,738,509 | 36,920,329 | |
Counterparty netting, assets | [3] | (7,239) | (3,579) |
Liabilities | |||
Funds withheld on GreyCastle life retrocession arrangements | [4] | 1,085,099 | 1,112,969 |
Other liabilities | [3] | 40,162 | 59,317 |
Total liabilities accounted for at fair value | 1,125,261 | 1,172,286 | |
Counterparty netting, liabilities | [3] | (7,239) | (3,579) |
Recurring | Quoted prices in active markets for identical assets (Level 1) | |||
Assets | |||
Total investments available for sale | 0 | 557,510 | |
Cash equivalents | [1] | 522,096 | 279,224 |
Other investments | [2] | 0 | 0 |
Other assets | [3] | 0 | 0 |
Total assets accounted for at fair value | 997,728 | 836,734 | |
Liabilities | |||
Funds withheld on GreyCastle life retrocession arrangements | [4] | 0 | 0 |
Other liabilities | [3] | 0 | 0 |
Total liabilities accounted for at fair value | 0 | 0 | |
Recurring | Significant other observable inputs (Level 2) | |||
Assets | |||
Total investments available for sale | 31,122,962 | 31,876,112 | |
Cash equivalents | [1] | 1,409,637 | 1,271,483 |
Other investments | [2] | 580,946 | 570,931 |
Other assets | [3] | 17,728 | 14,467 |
Total assets accounted for at fair value | 35,464,641 | 35,822,325 | |
Liabilities | |||
Funds withheld on GreyCastle life retrocession arrangements | [4] | 1,085,099 | 1,112,969 |
Other liabilities | [3] | 29,560 | 44,591 |
Total liabilities accounted for at fair value | 1,114,659 | 1,157,560 | |
Recurring | Significant other unobservable inputs (Level 3) | |||
Assets | |||
Total investments available for sale | 33,836 | 24,814 | |
Cash equivalents | [1] | 0 | 0 |
Other investments | [2] | 231,368 | 221,708 |
Other assets | [3] | 18,175 | 18,327 |
Total assets accounted for at fair value | 283,379 | 264,849 | |
Liabilities | |||
Funds withheld on GreyCastle life retrocession arrangements | [4] | 0 | 0 |
Other liabilities | [3] | 17,841 | 18,305 |
Total liabilities accounted for at fair value | 17,841 | 18,305 | |
Recurring | Excluding Life Funds Withheld Assets | |||
Assets | |||
Fixed maturities AFS | 28,648,080 | 28,901,876 | |
Short-term investments, at fair value | [5] | 500,170 | 815,481 |
Equity securities, at fair value | 713,967 | ||
Total investments available for sale | 29,148,250 | 30,431,324 | |
Equity securities, at fair value | 637,872 | ||
Recurring | Excluding Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 4,187,959 | 4,362,740 | |
Recurring | Excluding Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities AFS | 2,013,162 | 2,064,640 | |
Recurring | Excluding Life Funds Withheld Assets | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 5,306,651 | 5,201,581 | |
Recurring | Excluding Life Funds Withheld Assets | Corporate | |||
Assets | |||
Fixed maturities AFS | 9,742,670 | 9,795,133 | |
Recurring | Excluding Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 4,529,723 | 4,724,402 | |
Recurring | Excluding Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,259,519 | 1,244,017 | |
Recurring | Excluding Life Funds Withheld Assets | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,608,396 | 1,509,363 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Short-term investments, at fair value | [5] | 0 | 0 |
Equity securities, at fair value | 557,510 | ||
Total investments available for sale | 0 | 557,510 | |
Equity securities, at fair value | 474,118 | ||
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Corporate | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | |||
Assets | |||
Fixed maturities AFS | 28,614,244 | 28,877,062 | |
Short-term investments, at fair value | [5] | 500,170 | 815,481 |
Equity securities, at fair value | 156,457 | ||
Total investments available for sale | 29,114,414 | 29,849,000 | |
Equity securities, at fair value | 163,754 | ||
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 4,182,925 | 4,344,450 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities AFS | 2,013,162 | 2,064,640 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 5,306,651 | 5,201,581 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Corporate | |||
Assets | |||
Fixed maturities AFS | 9,740,542 | 9,793,841 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 4,522,786 | 4,724,402 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,259,519 | 1,244,017 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 1,588,659 | 1,504,131 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | |||
Assets | |||
Fixed maturities AFS | 33,836 | 24,814 | |
Short-term investments, at fair value | [5] | 0 | 0 |
Equity securities, at fair value | 0 | ||
Total investments available for sale | 33,836 | 24,814 | |
Equity securities, at fair value | 0 | ||
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 5,034 | 18,290 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Corporate | |||
Assets | |||
Fixed maturities AFS | 2,128 | 1,292 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 6,937 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Recurring | Excluding Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 19,737 | 5,232 | |
Recurring | Life Funds Withheld Assets | |||
Assets | |||
Fixed maturities AFS | 2,008,548 | 2,027,112 | |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |
Short-term investments, trading at fair value | [5] | 7,425 | 14,965 |
Total investments trading | 2,091,676 | 2,021,350 | |
Cash equivalents | [1] | 79,452 | 67,982 |
Recurring | Life Funds Withheld Assets | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 11,616 | 11,316 | |
Fixed maturities, trading at fair value | 9,320 | 11,042 | |
Recurring | Life Funds Withheld Assets | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities, trading at fair value | 31 | ||
Recurring | Life Funds Withheld Assets | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 584,406 | 584,534 | |
Fixed maturities, trading at fair value | 497,108 | 485,171 | |
Recurring | Life Funds Withheld Assets | Corporate | |||
Assets | |||
Fixed maturities AFS | 1,121,203 | 1,137,213 | |
Fixed maturities, trading at fair value | 1,525,761 | 1,460,292 | |
Recurring | Life Funds Withheld Assets | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 503 | 515 | |
Fixed maturities, trading at fair value | 893 | 932 | |
Recurring | Life Funds Withheld Assets | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 130,070 | 122,272 | |
Fixed maturities, trading at fair value | 7,472 | 7,580 | |
Recurring | Life Funds Withheld Assets | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 160,750 | 171,262 | |
Fixed maturities, trading at fair value | 43,697 | 41,337 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Short-term investments, trading at fair value | [5] | 0 | 0 |
Total investments trading | 0 | 0 | |
Cash equivalents | [1] | 1,514 | 0 |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities, trading at fair value | 0 | ||
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Corporate | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Quoted prices in active markets for identical assets (Level 1) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | |||
Assets | |||
Fixed maturities AFS | 2,008,548 | 2,027,112 | |
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |
Short-term investments, trading at fair value | [5] | 7,425 | 14,965 |
Total investments trading | 2,091,676 | 2,021,350 | |
Cash equivalents | [1] | 77,938 | 67,982 |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 11,616 | 11,316 | |
Fixed maturities, trading at fair value | 9,320 | 11,042 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities, trading at fair value | 31 | ||
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 584,406 | 584,534 | |
Fixed maturities, trading at fair value | 497,108 | 485,171 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Corporate | |||
Assets | |||
Fixed maturities AFS | 1,121,203 | 1,137,213 | |
Fixed maturities, trading at fair value | 1,525,761 | 1,460,292 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 503 | 515 | |
Fixed maturities, trading at fair value | 893 | 932 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 130,070 | 122,272 | |
Fixed maturities, trading at fair value | 7,472 | 7,580 | |
Recurring | Life Funds Withheld Assets | Significant other observable inputs (Level 2) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 160,750 | 171,262 | |
Fixed maturities, trading at fair value | 43,697 | 41,337 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Short-term investments, trading at fair value | [5] | 0 | 0 |
Total investments trading | 0 | 0 | |
Cash equivalents | [1] | 0 | 0 |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | U.S. Government and Government Agencies | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | US States, municipalities and political subdivisions of the States | |||
Assets | |||
Fixed maturities, trading at fair value | 0 | ||
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Non-U.S. Governments | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Corporate | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Residential mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Commercial mortgage-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | 0 | 0 | |
Recurring | Life Funds Withheld Assets | Significant other unobservable inputs (Level 3) | Other asset-backed securities | |||
Assets | |||
Fixed maturities AFS | 0 | 0 | |
Fixed maturities, trading at fair value | $ 0 | $ 0 | |
[1] | Cash equivalents balances subject to fair value measurement include certificates of deposit and money market funds. Operating cash balances are not subject to recurring fair value measurement guidance. | ||
[2] | Excluded from Other Investments are certain investments that are measured using net asset value as a practical expedient in the amount of $201.8 million and $198.2 million at March 31, 2018 and December 31, 2017, respectively. Under GAAP, these investments are excluded from the fair value hierarchy table. In addition, the Other investments balance excludes loans held at amortized cost, which totaled $172.9 million at March 31, 2018 and $173.0 million at December 31, 2017. For further information, see Item 8, Note 6, "Other Investments," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. | ||
[3] | Other assets and other liabilities include derivative instruments. The derivative balances included in each category are reported gross of cash collateral by level with a counterparty netting adjustment presented separately in the Counterparty Netting column. The fair values of the individual derivative contracts are reported gross in their respective levels based on the fair value hierarchy. For further details regarding derivative fair values and associated collateral received or paid, see Note 5, "Derivative Instruments. | ||
[4] | Funds withheld on GreyCastle Life Retro Arrangements (net of future policy benefit reserves recoverable) include balances related to the life retrocession embedded derivative, under which all investment results associated with the Life Funds Withheld Assets related to the GreyCastle Life Retro Arrangements described in Note 1(a), "Significant Accounting Policies - Basis of Preparation and Consolidation," accrue to the benefit of GCLR. | ||
[5] | Short-term investments consist primarily of U.S. and Non-U.S. Government securities, Corporate securities, and Other asset-backed securities. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information about assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Level 3 assets | ||
Balance, beginning of period | $ 246,544 | $ 251,596 |
Realized gains (losses) | 493 | (5,513) |
Movement in unrealized gains (losses) | 5,632 | 6,496 |
Purchases and issuances | 30,667 | 16,675 |
Sales | (13,016) | (10,284) |
Settlements | (11,633) | (5,986) |
Net transfers into (out of) Level 3 | 6,851 | (552) |
Balance, end of period | 265,538 | 252,432 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 5,658 | 5,768 |
Derivative contracts - net | ||
Balance, beginning of period | 22 | 2 |
Realized gains (losses) | 0 | 0 |
Movement in unrealized gains (losses) | 312 | 161 |
Purchases and issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Net transfers into (ouf ot) Level 3 | 0 | 0 |
Balance, end of period | 334 | 163 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 312 | 163 |
U.S. Government and Government Agencies | ||
Level 3 assets | ||
Balance, beginning of period | 18,290 | 24,751 |
Realized gains (losses) | (354) | (19) |
Movement in unrealized gains (losses) | 114 | (355) |
Purchases and issuances | 0 | 0 |
Sales | (13,016) | 0 |
Settlements | 0 | (311) |
Net transfers into (out of) Level 3 | 0 | (4,758) |
Balance, end of period | 5,034 | 19,308 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | (36) | (373) |
Corporate | ||
Level 3 assets | ||
Balance, beginning of period | 1,292 | 20,085 |
Realized gains (losses) | 0 | 0 |
Movement in unrealized gains (losses) | 43 | 11 |
Purchases and issuances | 0 | 0 |
Sales | 0 | (10,284) |
Settlements | (101) | (31) |
Net transfers into (out of) Level 3 | 894 | 118 |
Balance, end of period | 2,128 | 9,899 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 44 | 11 |
Residential mortgage-backed securities | ||
Level 3 assets | ||
Balance, beginning of period | 0 | 0 |
Realized gains (losses) | 0 | 17 |
Movement in unrealized gains (losses) | 0 | (526) |
Purchases and issuances | 980 | 0 |
Sales | 0 | 0 |
Settlements | 0 | (173) |
Net transfers into (out of) Level 3 | 5,957 | 4,063 |
Balance, end of period | 6,937 | 3,381 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 0 | (509) |
Commercial mortgage-backed securities | ||
Level 3 assets | ||
Balance, beginning of period | 99 | |
Realized gains (losses) | 0 | |
Movement in unrealized gains (losses) | 2 | |
Purchases and issuances | 0 | |
Sales | 0 | |
Settlements | 0 | |
Net transfers into (out of) Level 3 | 0 | |
Balance, end of period | 101 | |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 2 | |
Other asset-backed securities | ||
Level 3 assets | ||
Balance, beginning of period | 5,232 | 1,131 |
Realized gains (losses) | 0 | 30 |
Movement in unrealized gains (losses) | (28) | 101 |
Purchases and issuances | 15,407 | 0 |
Sales | 0 | 0 |
Settlements | (874) | (46) |
Net transfers into (out of) Level 3 | 0 | 2,734 |
Balance, end of period | 19,737 | 3,950 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 0 | 131 |
Short-term investments | ||
Level 3 assets | ||
Balance, beginning of period | 0 | |
Realized gains (losses) | 0 | |
Movement in unrealized gains (losses) | 0 | |
Purchases and issuances | 11,693 | |
Sales | 0 | |
Settlements | (28) | |
Net transfers into (out of) Level 3 | 0 | |
Balance, end of period | 11,665 | |
Movement in total gains (losses) above relating to instruments still held at the reporting date | 0 | |
Other investments | ||
Level 3 assets | ||
Balance, beginning of period | 221,708 | 205,528 |
Realized gains (losses) | 847 | (5,541) |
Movement in unrealized gains (losses) | 5,191 | 7,102 |
Purchases and issuances | 14,280 | 4,982 |
Sales | 0 | 0 |
Settlements | (10,658) | (5,397) |
Net transfers into (out of) Level 3 | 0 | (2,709) |
Balance, end of period | 231,368 | 203,965 |
Movement in total gains (losses) above relating to instruments still held at the reporting date | $ 5,338 | $ 6,343 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial instruments not carried at fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | $ 172,900 | $ 173,000 |
Deposit liabilities | 982,963 | 1,042,677 |
Notes payable and debt | 3,240,461 | 3,220,769 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | 172,879 | 172,982 |
Deposit liabilities | 982,963 | 1,042,677 |
Notes payable and debt | 3,240,461 | 3,220,769 |
Financial Liabilities | 4,223,424 | 4,263,446 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments | 181,349 | 182,222 |
Deposit liabilities | 1,190,885 | 1,266,682 |
Notes payable and debt | 3,483,428 | 3,507,108 |
Financial Liabilities | $ 4,674,313 | $ 4,773,790 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Investments Net Asset Value | $ 201.8 | $ 198.2 |
Other investments | $ 172.9 | $ 173 |
Spread on U.S. treasury for discounting deposit liabilities | 0.263% | 0.45505% |
Goodwill and Other Intangible62
Goodwill and Other Intangible Assets - Goodwill and other intangible assets rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill | |
Goodwill, beginning of period | $ 1,234,150 |
Goodwill, foreign currency translation | 4,850 |
Goodwill, end of period | 1,239,000 |
Intangible assets with an indefinite life | |
Intangible assets with an indefinite life, beginning of period | 699,014 |
Indefinite-lived intangible assets, foreign currency translation | 2,916 |
Intangible assets with an indefinite life, end of period | 701,930 |
Intangible assets with a definite life | |
Intangible assets with a definite life, beginning of period | 292,587 |
Amortization | (4,944) |
Identified definite life intangible assets, foreign currency translation | 1,933 |
Intangible assets with a definite life, end of period | 289,576 |
Total | |
Goodwill and other intangible assets, beginning of period | 2,225,751 |
Amortization | (4,944) |
Foreign currency translation | 9,699 |
Goodwill and other intangible assets, end of period | $ 2,230,506 |
Losses and Loss Expenses - Reco
Losses and Loss Expenses - Reconciliation of the beginning and ending balances of unpaid losses and losee expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Unpaid losses and loss expenses, beginning of period | $ 29,696,779 | $ 25,939,571 | |
Unpaid losses and loss expenses recoverable, beginning of period | 7,247,723 | ||
Net unpaid losses and loss expenses, beginning of period | 22,457,333 | 20,459,271 | |
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in: | |||
Current year | 1,631,142 | 1,559,452 | |
Prior year | (9,136) | 24,004 | |
Total net incurred losses and loss expenses | 1,622,006 | 1,583,456 | |
Foreign exchange and other | 262,571 | 56,244 | |
Less net losses and loss expenses paid in respect of losses occurring in: | |||
Current year | 128,691 | 106,472 | |
Prior year | 1,774,194 | 1,222,119 | |
Total net paid losses | 1,902,885 | 1,328,591 | |
Net unpaid losses and loss expenses, end of period | 22,439,025 | 20,770,380 | |
Unpaid losses and loss expenses recoverable, end of period | 7,271,013 | ||
Unpaid losses and loss expenses, end of period | 29,701,568 | 26,445,124 | |
Total P&C | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Unpaid losses and loss expenses recoverable, beginning of period | [1] | 7,239,446 | 5,480,300 |
Less net losses and loss expenses paid in respect of losses occurring in: | |||
Unpaid losses and loss expenses recoverable, end of period | [1] | $ 7,262,543 | $ 5,674,744 |
[1] | P&C business only, net of provision for uncollectible reinsurance. |
Losses and Loss Expenses - Net
Losses and Loss Expenses - Net (favorable) adverse prior year loss development of loss and loss expense reserves by operating segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | $ (9,136) | $ 24,004 |
Insurance Segment | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (5,295) | (4,642) |
Insurance Segment | Professional | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (1,830) | (5) |
Insurance Segment | Casualty | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (5,115) | (4,770) |
Insurance Segment | Property | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | 1,257 | 81 |
Insurance Segment | Specialty | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | 393 | 52 |
Reinsurance Segment | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (3,841) | 28,646 |
Reinsurance Segment | Property and other short-tail lines | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (18,994) | (54,916) |
Reinsurance Segment | Casualty and other long-tail lines | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | $ 15,153 | $ 83,562 |
Losses and Loss Expenses - Narr
Losses and Loss Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | $ (9,136) | $ 24,004 |
Insurance Segment | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (5,295) | (4,642) |
Reinsurance Segment | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (3,841) | 28,646 |
Reinsurance Segment | Property and other short-tail lines | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | (18,994) | (54,916) |
Reinsurance Segment | Casualty and other long-tail lines | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Prior year | $ 15,153 | $ 83,562 |
Notes Payable and Debt and Fi66
Notes Payable and Debt and Financing Arrangements - Notes payable and debt (Details) € in Thousands, $ in Thousands | Jun. 29, 2017USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 07, 2017USD ($) | Jun. 30, 2017EUR (€) | Jun. 29, 2017EUR (€) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2007USD ($) | Jun. 30, 2007USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Percentage ownership of subsidiaries | 100.00% | |||||||||||
Notes payable and debt | $ 3,240,461 | $ 3,220,769 | ||||||||||
Senior notes | 2.3% Senior Notes due 2018 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 300,000 | |||||||||||
Notes payable and debt | [1] | $ 299,525 | 299,357 | |||||||||
Debt interest rate (percent) | 2.30% | |||||||||||
Senior notes | 5.75% Senior Notes due 2021 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 400,000 | |||||||||||
Notes payable and debt | [1] | $ 398,492 | 398,384 | |||||||||
Debt interest rate (percent) | 5.75% | |||||||||||
Senior notes | 6.375% Senior Notes due 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 350,000 | |||||||||||
Notes payable and debt | [1] | $ 349,275 | 349,248 | |||||||||
Debt interest rate (percent) | 6.375% | |||||||||||
Senior notes | 6.25% Senior Notes due 2027 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 325,000 | |||||||||||
Notes payable and debt | [1] | $ 323,571 | 323,531 | |||||||||
Debt interest rate (percent) | 6.25% | |||||||||||
Senior notes | 5.25% Senior Notes due 2043 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 300,000 | |||||||||||
Notes payable and debt | [1] | $ 296,593 | 296,560 | |||||||||
Debt interest rate (percent) | 5.25% | |||||||||||
Subordinated notes | 4.45% Subordinated Notes due 2025 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 500,000 | |||||||||||
Notes payable and debt | [1] | $ 494,340 | 494,138 | |||||||||
Debt interest rate (percent) | 4.45% | |||||||||||
Subordinated notes | 5.5% Subordinated Notes due 2045 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 500,000 | |||||||||||
Notes payable and debt | [1],[2] | $ 472,928 | 472,832 | |||||||||
Debt interest rate (percent) | 5.50% | |||||||||||
Debt Instrument, Repurchased Face Amount | $ 16,700 | |||||||||||
Subordinated notes | 3.25% Subordinated Notes due 2047 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment, debt | $ 568,800 | € 500,000 | € 500,000 | |||||||||
Notes payable and debt | [1],[3] | $ 605,737 | $ 586,719 | |||||||||
Debt interest rate (percent) | 3.25% | 3.25% | 3.25% | |||||||||
Interest rate term | 10 years | |||||||||||
Debt Issuance Percentage of Face Value | 99.054% | 99.054% | ||||||||||
Proceeds from Issuance of Long-term Debt | $ 558,300 | |||||||||||
Unamortized Debt Issuance Expense | $ 10,500 | |||||||||||
Subordinated notes | 3.25% Subordinated Notes due 2047 | 3 month Euribor | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Spread on variable rate | 2.90% | |||||||||||
[1] | "Outstanding" data represent March 31, 2018 and December 31, 2017 accreted values. | |||||||||||
[2] | On July 7, 2017, the Company repurchased and canceled $16.7 million of the original debt issuance. See below for further details. | |||||||||||
[3] | This issuance carries a fixed coupon of 3.25% for a period of ten years, then a floating rate of three-month EURIBOR plus 2.90% from (and including) June 29, 2027 through maturity. The outstanding amount is subject to movement due to foreign exchange. |
Notes Payable and Debt and Fi67
Notes Payable and Debt and Financing Arrangements - Letter of credit facilities and other sources of collateral (Details) $ in Thousands | Mar. 31, 2018USD ($)Credit_Facilities | Dec. 31, 2017USD ($)Credit_Facilities |
Line of Credit Facility [Line Items] | ||
Number of letter of credit facilities available | Credit_Facilities | 10 | 10 |
Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | $ 3,467,841 | $ 3,392,986 |
Available letter of credit facilities - in use | $ 2,807,211 | $ 2,549,226 |
Collateralized by certain assets of the Company’s investment portfolio | 54.70% | 54.20% |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Available credit facilities - remaining borrowing capacity | $ 644,300 | $ 748,000 |
Available letter of credit facilities - commitments | 750,000 | |
Available letter of credit facilities - in use | 105,700 | 2,000 |
Credit Agricole Facility I [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Credit Agricole Facility II [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Commonwealth Bank Facility [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 215,000 | 215,000 |
Available letter of credit facilities - in use | 215,000 | 215,000 |
Credit Suisse Facility [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 100,000 | 100,000 |
Available letter of credit facilities - in use | 100,000 | 100,000 |
Funds at Lloyds Bilateral Facility I [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Funds at Lloyds Bilateral Facility II [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Funds at Lloyds Bilateral Facility III [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Funds at Lloyds Bilateral Facility IV [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 125,000 | 125,000 |
Available letter of credit facilities - in use | 125,000 | 125,000 |
Syndicated Lenders [Member] | Unsecured Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 750,000 | 750,000 |
Available letter of credit facilities - in use | 105,655 | 2,000 |
Commerzbank Facility [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 100,000 | 100,000 |
Available letter of credit facilities - in use | 100,000 | 100,000 |
Unsecured Credit Facilities [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 1,915,000 | 1,915,000 |
Available letter of credit facilities - in use | 1,270,655 | 1,167,000 |
Secured Credit Facilities [Member] | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Available letter of credit facilities - commitments | 1,552,841 | 1,477,986 |
Available letter of credit facilities - in use | $ 1,536,556 | $ 1,382,226 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of related party transactions activity (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($)management_company | Mar. 31, 2017USD ($) | Dec. 31, 2017management_company | ||
Related Party Transaction [Line Items] | ||||
Number of investment management companies | management_company | 2 | 4 | ||
Number of investment technology service firms | management_company | 1 | 1 | ||
Reported net premiums written | $ 3,155,718 | $ 2,983,070 | ||
Net losses and loss expenses incurred | 1,622,006 | 1,583,456 | ||
Reported net acquisition costs | $ 463,827 | 435,869 | [1] | |
XL Innovate Fund [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage held by noncontrolling interest | 5.21% | |||
Investment manager affiliates | ||||
Related Party Transaction [Line Items] | ||||
Reported net premiums written | $ 15,578 | 21,715 | ||
Net losses and loss expenses incurred | 11,719 | 11,250 | ||
Reported net acquisition costs | $ 5,587 | $ 9,214 | ||
[1] | The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Total net assets attributable to XL | $ 108,286 | $ 108,466 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Total net assets | 235,936 | 242,605 |
Non-controlling interest in equity of consolidated subsidiaries | 127,650 | 134,139 |
New Ocean Capital Management Ltd [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Non-controlling interest in equity of consolidated subsidiaries | $ 200 | $ 500 |
Share Capital - Options valuati
Share Capital - Options valuation assumptions (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Dividend yield | 2.00% |
Risk free interest rate | 2.71% |
Volatility | 27.00% |
Expected lives | 6 years |
Share Capital - Narrative (Deta
Share Capital - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Feb. 17, 2017 | |
Minimum | ||
Stock plans | ||
Award vesting period | 3 years | |
Maximum | ||
Stock plans | ||
Award vesting period | 4 years | |
Stock options | ||
Stock plans | ||
Options granted (in shares) | 400,000 | |
Options, weighted average grant date fair value, per share | $ 10.34 | |
Restricted Stock [Member] | ||
Stock plans | ||
Other awards granted during the period (in shares) | 870 | |
Aggregate grant date fair value | $ 37,514 | |
Restricted stock units | ||
Stock plans | ||
Other awards granted during the period (in shares) | 1,200,000 | |
Aggregate grant date fair value | $ 50,900,000 | |
Restricted stock units | Three Year Option | ||
Stock plans | ||
Award vesting period | 3 years | |
Restricted stock units | Four Year Option | ||
Stock plans | ||
Award vesting period | 4 years | |
Performance Shares | ||
Stock plans | ||
Other awards granted during the period (in shares) | 300,000 | |
Aggregate grant date fair value | $ 13,500,000 | |
Maximum number of performance shares | 600,000 | |
Performance Shares | Minimum | ||
Stock plans | ||
Pinal payout percentage | 0.00% | |
Performance Shares | Maximum | ||
Stock plans | ||
Pinal payout percentage | 200.00% | |
February 2017 Program | ||
Shareholders Equity Disclosure [Line Items] | ||
Share repurchase program, authorized amount | $ 1,000,000,000 | |
Share repurchase program, remaining authorization | $ 529,100,000 | |
Settling of employee withholding taxes | ||
Shareholders Equity Disclosure [Line Items] | ||
Share repurchase program, value of shares repurchased and retired during the period | $ 1,700,000 |
Computation of Earnings Per C72
Computation of Earnings Per Common Share and Common Share Equivalent - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic earnings per common share & common share equivalents outstanding: | ||
Net income (loss) attributable to common shareholders | $ 152,648 | $ 152,843 |
Weighted average common shares outstanding - basic (in thousands of shares) | 256,922 | 265,690 |
Basic earnings per common share & common share equivalents outstanding | $ 0.59 | $ 0.58 |
Diluted earnings per common share & common share equivalents outstanding: | ||
Weighted average common shares outstanding - basic (in thousands of shares) | 256,922 | 265,690 |
Impact of share-based compensation | 4,254 | 4,077 |
Weighted average common shares outstanding - diluted (in thousands of shares) | 261,176 | 269,767 |
Diluted earnings per common share & common share equivalents outstanding | $ 0.58 | $ 0.57 |
Dividends per ordinary share | $ 0.22 | $ 0.22 |
Computation of Earnings Per C73
Computation of Earnings Per Common Share and Common Share Equivalent - Antidilutive shares (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based compensation plans | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common shares available for issuance under share-based compensation plans | 0.6 | 3 |
Accumulated Other Comprehensi74
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI, net of tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | $ 889,431 | $ 715,546 | ||
OCI before reclassifications | (403,127) | 188,822 | ||
Amounts reclassified from AOCI | 14,540 | (51,147) | ||
Tax benefit (expense) | 29,364 | (8,247) | ||
Comprehensive income (loss) | (359,223) | 129,428 | ||
Ending balance, net of tax | 312,255 | 844,974 | ||
Change in adjustments related to future policy benefit reserves, net of tax | (4,164) | (5,132) | ||
Cumulative Effect on Retained Earnings, before Tax | 233,800 | |||
Cumulative Effect on Retained Earnings, Tax | (11,900) | |||
Unrealized gains (losses) on investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | [1] | 870,478 | 730,429 | |
OCI before reclassifications | [1] | (399,792) | 149,959 | |
Amounts reclassified from AOCI | [1] | 10,875 | (52,554) | |
Tax benefit (expense) | [1] | 28,747 | (10,952) | |
Comprehensive income (loss) | [1] | (360,170) | 86,453 | |
Ending balance, net of tax | [1] | 294,809 | 816,882 | |
Cumulative impact of net unrealized gains losses on future policy benefit reserve | 180,800 | $ 184,900 | ||
Change in adjustments related to future policy benefit reserves, net of tax | (4,200) | |||
OTTI losses recognized in AOCI | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | (43,527) | (50,952) | ||
OCI before reclassifications | 0 | 0 | ||
Amounts reclassified from AOCI | 3,713 | 1,455 | ||
Tax benefit (expense) | (97) | (13) | ||
Comprehensive income (loss) | 3,616 | 1,442 | ||
Ending balance, net of tax | (39,911) | (49,510) | ||
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | 83,042 | 58,970 | ||
OCI before reclassifications | (3,112) | 39,204 | ||
Amounts reclassified from AOCI | 0 | 0 | ||
Tax benefit (expense) | 680 | 2,734 | ||
Comprehensive income (loss) | (2,432) | 41,938 | ||
Ending balance, net of tax | 80,394 | 100,908 | ||
Underfunded pension liability | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | (22,356) | (24,887) | ||
OCI before reclassifications | (223) | (341) | ||
Amounts reclassified from AOCI | 0 | 0 | ||
Tax benefit (expense) | 34 | (16) | ||
Comprehensive income (loss) | (189) | (357) | ||
Ending balance, net of tax | (24,783) | (25,244) | ||
Cash flow hedge | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | 1,794 | 1,986 | ||
OCI before reclassifications | 0 | 0 | ||
Amounts reclassified from AOCI | (48) | (48) | ||
Tax benefit (expense) | 0 | 0 | ||
Comprehensive income (loss) | (48) | (48) | ||
Ending balance, net of tax | 1,746 | $ 1,938 | ||
Accounting Standards Update 2016-01 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [2] | 221,856 | ||
Accounting Standards Update 2016-01 | Unrealized gains (losses) on investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [1],[2] | 221,856 | ||
Accounting Standards Update 2016-01 | OTTI losses recognized in AOCI | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [2] | 0 | ||
Accounting Standards Update 2016-01 | Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [2] | 0 | ||
Accounting Standards Update 2016-01 | Underfunded pension liability | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [2] | 0 | ||
Accounting Standards Update 2016-01 | Cash flow hedge | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [2] | 0 | ||
Accounting Standards Update 2018-02 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | (3,903) | |||
Accounting Standards Update 2018-02 | Unrealized gains (losses) on investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | [1] | (6,357) | ||
Accounting Standards Update 2018-02 | OTTI losses recognized in AOCI | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | 0 | |||
Accounting Standards Update 2018-02 | Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | 216 | |||
Accounting Standards Update 2018-02 | Underfunded pension liability | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | 2,238 | |||
Accounting Standards Update 2018-02 | Cash flow hedge | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification due to adoption of new accounting pronouncement | $ 0 | |||
[1] | For certain annuity contracts that are subject to the GreyCastle Life Retro Arrangements, future policy benefit reserves were historically increased for the impact of changes in unrealized gains on investments supporting such contracts as if the gains had been realized, with a corresponding entry to other comprehensive income ("Shadow Adjustments"). Upon completion of the GreyCastle Life Retro Arrangements, no further Shadow Adjustments were recorded. At December 31, 2017, the cumulative impact of the Shadow Adjustments was $184.9 million. During the three months ended March 31, 2018, net movements of $(4.2) million were recorded, resulting in a total cumulative net impact of Shadow Adjustments on future policy benefit reserves of $180.8 million at March 31, 2018. | |||
[2] | The reclassification out of AOCI due to the adoption of ASU 2016-01 includes $233.8 million of net unrealized gains less $11.9 million of deferred tax on net unrealized gains as discussed in Note 1(b), "Significant Accounting Policies - Recent Accounting Pronouncements." |
Accumulated Other Comprehensi75
Accumulated Other Comprehensive Income (Loss) - Details About AOCI Components (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | $ 14,540 | $ (51,147) | |
Provision (benefit) for income tax | (31,902) | (13,092) | |
Unrealized gains (losses) on investments | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | [1] | 10,875 | (52,554) |
OTTI losses recognized in AOCI | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 3,713 | 1,455 | |
Cash flow hedge | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (48) | (48) | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 0 | 0 | |
Underfunded pension liability | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 0 | 0 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 14,540 | (51,147) | |
Provision (benefit) for income tax | (2,099) | (487) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 12,441 | (51,634) | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized gains (losses) on investments | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized gains (losses) on investments AFS | 17,762 | (47,020) | |
OTTI on investments transferred to (from) OCI | 2,848 | 6,874 | |
Reclassification adjustment for investments transferred to equity method | 0 | 0 | |
Total before tax | 10,875 | (52,554) | |
Provision (benefit) for income tax | (2,002) | (474) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 8,873 | (53,028) | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | OTTI losses recognized in AOCI | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Net realized gains (losses) on investments AFS | 3,552 | 1,455 | |
OTTI on investments transferred to (from) OCI | 161 | 0 | |
Total before tax | 3,713 | 1,455 | |
Provision (benefit) for income tax | (97) | (13) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3,616 | 1,442 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (48) | (48) | |
Provision (benefit) for income tax | 0 | 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (48) | (48) | |
Life Funds Withheld Assets | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
OTTI on investments transferred to (from) OCI | (1,203) | 0 | |
Life Funds Withheld Assets | Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized gains (losses) on investments | |||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||
Change in adjustments related to future policy benefit reserves, net of tax | $ (9,735) | $ (12,408) | |
[1] | For certain annuity contracts that are subject to the GreyCastle Life Retro Arrangements, future policy benefit reserves were historically increased for the impact of changes in unrealized gains on investments supporting such contracts as if the gains had been realized, with a corresponding entry to other comprehensive income ("Shadow Adjustments"). Upon completion of the GreyCastle Life Retro Arrangements, no further Shadow Adjustments were recorded. At December 31, 2017, the cumulative impact of the Shadow Adjustments was $184.9 million. During the three months ended March 31, 2018, net movements of $(4.2) million were recorded, resulting in a total cumulative net impact of Shadow Adjustments on future policy benefit reserves of $180.8 million at March 31, 2018. |
Guarantor Financial Informati76
Guarantor Financial Information Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
ASSETS | |||||
Fixed maturities AFS | $ 30,656,628 | $ 30,928,988 | |||
Short-term investments, at fair value | 500,170 | 815,481 | |||
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |||
Short-term investments, trading at fair value | 7,425 | 14,965 | |||
Equity securities, at fair value | 637,872 | 713,967 | |||
Investments in affiliates | 1,900,105 | 1,911,996 | |||
Other investments | 1,186,983 | 1,163,863 | |||
Investments | 36,973,434 | 37,555,645 | |||
Cash and cash equivalents | 3,484,763 | 3,435,954 | |||
Restricted cash | 155,023 | 157,497 | |||
Investments in subsidiaries | 0 | 0 | |||
Accrued investment income | 265,701 | 272,149 | |||
Deferred acquisition costs and value of business acquired | 1,317,797 | 1,102,474 | |||
Ceded unearned premiums | 2,950,077 | 2,198,217 | |||
Premiums receivable | 7,988,469 | 6,934,482 | |||
Reinsurance balances receivable | 1,210,620 | 930,114 | |||
Unpaid losses and loss expenses recoverable | 7,271,013 | 7,247,723 | |||
Receivable from investments sold | 258,084 | 201,515 | |||
Goodwill and other intangible assets | 2,230,506 | 2,225,751 | |||
Deferred tax asset | 356,667 | 332,024 | |||
Amounts due from subsidiaries/parent | 0 | 0 | |||
Other assets | 875,809 | 842,691 | |||
Total assets | 65,337,963 | 63,436,236 | |||
Liabilities: | |||||
Unpaid losses and loss expenses | 29,701,568 | 29,696,779 | $ 26,445,124 | $ 25,939,571 | |
Deposit liabilities | 982,963 | 1,042,677 | |||
Future policy benefit reserves | 3,680,958 | 3,610,926 | |||
Funds withheld on GreyCastle life retrocession arrangements | 989,140 | 999,219 | |||
Unearned premiums | 9,687,293 | 8,307,431 | |||
Notes payable and debt | 3,240,461 | 3,220,769 | |||
Reinsurance balances payable | 4,432,331 | 3,706,116 | |||
Payable for investments purchased | 317,339 | 332,989 | |||
Deferred tax liability | 57,995 | 57,574 | |||
Amounts due to subsidiaries/parent | 0 | 0 | |||
Other liabilities | 1,012,693 | 1,000,436 | |||
Total liabilities | 54,102,741 | 51,974,916 | |||
Shareholders' Equity: | |||||
Shareholders' equity attributable to XL Group Ltd | 9,628,529 | 9,848,317 | |||
Non-controlling interest in equity of consolidated subsidiaries | 1,606,693 | 1,613,003 | |||
Total shareholders' equity | 11,235,222 | 11,461,320 | $ 13,000,626 | ||
Total liabilities and shareholders' equity | 65,337,963 | 63,436,236 | |||
Consolidating Adjustments and Eliminations | |||||
ASSETS | |||||
Fixed maturities AFS | 0 | 0 | |||
Short-term investments, at fair value | 0 | 0 | |||
Fixed maturities, trading at fair value | 0 | 0 | |||
Short-term investments, trading at fair value | 0 | 0 | |||
Equity securities, at fair value | 0 | 0 | |||
Investments in affiliates | 0 | 0 | |||
Other investments | 0 | 0 | |||
Investments | 0 | 0 | |||
Cash and cash equivalents | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Investments in subsidiaries | (22,910,239) | (23,197,062) | |||
Accrued investment income | 0 | 0 | |||
Deferred acquisition costs and value of business acquired | 0 | 0 | |||
Ceded unearned premiums | 0 | 0 | |||
Premiums receivable | 0 | 0 | |||
Reinsurance balances receivable | 0 | 0 | |||
Unpaid losses and loss expenses recoverable | 0 | 0 | |||
Receivable from investments sold | 0 | 0 | |||
Goodwill and other intangible assets | 0 | 0 | |||
Deferred tax asset | 0 | 0 | |||
Amounts due from subsidiaries/parent | (128,214) | (94,277) | |||
Other assets | 0 | 0 | |||
Total assets | (23,038,453) | (23,291,339) | |||
Liabilities: | |||||
Unpaid losses and loss expenses | 0 | 0 | |||
Deposit liabilities | 0 | 0 | |||
Future policy benefit reserves | 0 | 0 | |||
Funds withheld on GreyCastle life retrocession arrangements | 0 | 0 | |||
Unearned premiums | 0 | 0 | |||
Notes payable and debt | 0 | 0 | |||
Reinsurance balances payable | 0 | 0 | |||
Payable for investments purchased | 0 | 0 | |||
Deferred tax liability | 0 | 0 | |||
Amounts due to subsidiaries/parent | (128,214) | (94,277) | |||
Other liabilities | 0 | 0 | |||
Total liabilities | (128,214) | (94,277) | |||
Shareholders' Equity: | |||||
Shareholders' equity attributable to XL Group Ltd | (22,910,239) | (23,197,062) | |||
Non-controlling interest in equity of consolidated subsidiaries | 0 | 0 | |||
Total shareholders' equity | (22,910,239) | (23,197,062) | |||
Total liabilities and shareholders' equity | (23,038,453) | (23,291,339) | |||
XL-Group/XL-Ireland | |||||
ASSETS | |||||
Fixed maturities AFS | [1] | 0 | 0 | ||
Short-term investments, at fair value | [1] | 0 | 0 | ||
Fixed maturities, trading at fair value | [1] | 0 | 0 | ||
Short-term investments, trading at fair value | [1] | 0 | 0 | ||
Equity securities, at fair value | [1] | 0 | 0 | ||
Investments in affiliates | [1] | 0 | 0 | ||
Other investments | [1] | 0 | 0 | ||
Investments | [1] | 0 | 0 | ||
Cash and cash equivalents | [1] | 20,360 | 3,950 | ||
Restricted cash | [1] | 0 | 0 | ||
Investments in subsidiaries | [1] | 9,632,524 | 9,817,979 | ||
Accrued investment income | [1] | 11 | 11 | ||
Deferred acquisition costs and value of business acquired | [1] | 0 | 0 | ||
Ceded unearned premiums | [1] | 0 | 0 | ||
Premiums receivable | [1] | 0 | 0 | ||
Reinsurance balances receivable | [1] | 0 | 0 | ||
Unpaid losses and loss expenses recoverable | [1] | 0 | 0 | ||
Receivable from investments sold | [1] | 0 | 0 | ||
Goodwill and other intangible assets | [1] | 0 | 0 | ||
Deferred tax asset | [1] | 0 | 0 | ||
Amounts due from subsidiaries/parent | [1] | 57,632 | 32,301 | ||
Other assets | [1] | 1,916 | 14,541 | ||
Total assets | [1] | 9,712,443 | 9,868,782 | ||
Liabilities: | |||||
Unpaid losses and loss expenses | [1] | 0 | 0 | ||
Deposit liabilities | [1] | 0 | 0 | ||
Future policy benefit reserves | [1] | 0 | 0 | ||
Funds withheld on GreyCastle life retrocession arrangements | [1] | 0 | 0 | ||
Unearned premiums | [1] | 0 | 0 | ||
Notes payable and debt | [1] | 0 | 0 | ||
Reinsurance balances payable | [1] | 0 | 0 | ||
Payable for investments purchased | [1] | 0 | 0 | ||
Deferred tax liability | [1] | 0 | 0 | ||
Amounts due to subsidiaries/parent | [1] | 0 | 0 | ||
Other liabilities | [1] | 83,914 | 20,465 | ||
Total liabilities | [1] | 83,914 | 20,465 | ||
Shareholders' Equity: | |||||
Shareholders' equity attributable to XL Group Ltd | [1] | 9,628,529 | 9,848,317 | ||
Non-controlling interest in equity of consolidated subsidiaries | [1] | 0 | 0 | ||
Total shareholders' equity | [1] | 9,628,529 | 9,848,317 | ||
Total liabilities and shareholders' equity | [1] | 9,712,443 | 9,868,782 | ||
XLIT | |||||
ASSETS | |||||
Fixed maturities AFS | 449,368 | 528,152 | |||
Short-term investments, at fair value | 0 | 0 | |||
Fixed maturities, trading at fair value | 0 | 0 | |||
Short-term investments, trading at fair value | 0 | 0 | |||
Equity securities, at fair value | 0 | 0 | |||
Investments in affiliates | 0 | 0 | |||
Other investments | 0 | 0 | |||
Investments | 449,368 | 528,152 | |||
Cash and cash equivalents | 233,948 | 158,688 | |||
Restricted cash | 0 | 0 | |||
Investments in subsidiaries | 13,277,715 | 13,379,083 | |||
Accrued investment income | 2,133 | 2,436 | |||
Deferred acquisition costs and value of business acquired | 0 | 0 | |||
Ceded unearned premiums | 0 | 0 | |||
Premiums receivable | 0 | 0 | |||
Reinsurance balances receivable | 0 | 0 | |||
Unpaid losses and loss expenses recoverable | 0 | 0 | |||
Receivable from investments sold | 15,000 | 0 | |||
Goodwill and other intangible assets | 0 | 0 | |||
Deferred tax asset | 0 | 0 | |||
Amounts due from subsidiaries/parent | 0 | 0 | |||
Other assets | 27,611 | 27,244 | |||
Total assets | 14,005,775 | 14,095,603 | |||
Liabilities: | |||||
Unpaid losses and loss expenses | 0 | 0 | |||
Deposit liabilities | 0 | 0 | |||
Future policy benefit reserves | 0 | 0 | |||
Funds withheld on GreyCastle life retrocession arrangements | 0 | 0 | |||
Unearned premiums | 0 | 0 | |||
Notes payable and debt | 3,240,461 | 3,220,769 | |||
Reinsurance balances payable | 0 | 0 | |||
Payable for investments purchased | 0 | 848 | |||
Deferred tax liability | 1,949 | 0 | |||
Amounts due to subsidiaries/parent | 122,328 | 62,111 | |||
Other liabilities | 51,592 | 36,975 | |||
Total liabilities | 3,416,330 | 3,320,703 | |||
Shareholders' Equity: | |||||
Shareholders' equity attributable to XL Group Ltd | 9,632,524 | 9,817,979 | |||
Non-controlling interest in equity of consolidated subsidiaries | 956,921 | 956,921 | |||
Total shareholders' equity | 10,589,445 | 10,774,900 | |||
Total liabilities and shareholders' equity | 14,005,775 | 14,095,603 | |||
Other XL Subsidiaries | |||||
ASSETS | |||||
Fixed maturities AFS | 30,207,260 | 30,400,836 | |||
Short-term investments, at fair value | 500,170 | 815,481 | |||
Fixed maturities, trading at fair value | 2,084,251 | 2,006,385 | |||
Short-term investments, trading at fair value | 7,425 | 14,965 | |||
Equity securities, at fair value | 637,872 | 713,967 | |||
Investments in affiliates | 1,900,105 | 1,911,996 | |||
Other investments | 1,186,983 | 1,163,863 | |||
Investments | 36,524,066 | 37,027,493 | |||
Cash and cash equivalents | 3,230,455 | 3,273,316 | |||
Restricted cash | 155,023 | 157,497 | |||
Investments in subsidiaries | 0 | 0 | |||
Accrued investment income | 263,557 | 269,702 | |||
Deferred acquisition costs and value of business acquired | 1,317,797 | 1,102,474 | |||
Ceded unearned premiums | 2,950,077 | 2,198,217 | |||
Premiums receivable | 7,988,469 | 6,934,482 | |||
Reinsurance balances receivable | 1,210,620 | 930,114 | |||
Unpaid losses and loss expenses recoverable | 7,271,013 | 7,247,723 | |||
Receivable from investments sold | 243,084 | 201,515 | |||
Goodwill and other intangible assets | 2,230,506 | 2,225,751 | |||
Deferred tax asset | 356,667 | 332,024 | |||
Amounts due from subsidiaries/parent | 70,582 | 61,976 | |||
Other assets | 846,282 | 800,906 | |||
Total assets | 64,658,198 | 62,763,190 | |||
Liabilities: | |||||
Unpaid losses and loss expenses | 29,701,568 | 29,696,779 | |||
Deposit liabilities | 982,963 | 1,042,677 | |||
Future policy benefit reserves | 3,680,958 | 3,610,926 | |||
Funds withheld on GreyCastle life retrocession arrangements | 989,140 | 999,219 | |||
Unearned premiums | 9,687,293 | 8,307,431 | |||
Notes payable and debt | 0 | 0 | |||
Reinsurance balances payable | 4,432,331 | 3,706,116 | |||
Payable for investments purchased | 317,339 | 332,141 | |||
Deferred tax liability | 56,046 | 57,574 | |||
Amounts due to subsidiaries/parent | 5,886 | 32,166 | |||
Other liabilities | 877,187 | 942,996 | |||
Total liabilities | 50,730,711 | 48,728,025 | |||
Shareholders' Equity: | |||||
Shareholders' equity attributable to XL Group Ltd | 13,277,715 | 13,379,083 | |||
Non-controlling interest in equity of consolidated subsidiaries | 649,772 | 656,082 | |||
Total shareholders' equity | 13,927,487 | 14,035,165 | |||
Total liabilities and shareholders' equity | $ 64,658,198 | $ 62,763,190 | |||
[1] | Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Guarantor Financial Informati77
Guarantor Financial Information Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Revenues: | ||||
Net premiums earned | $ 2,600,288 | $ 2,522,791 | ||
Net investment income | 218,481 | 200,532 | ||
Total realized investment gains (losses) | (83,355) | 37,286 | ||
Net realized and unrealized gains (losses) on derivative instruments | 4,221 | (7,069) | ||
Income (loss) from investment affiliates | 45,669 | 38,261 | ||
Fee income and other | 6,717 | 13,661 | ||
Total revenues | 2,814,942 | 2,755,361 | ||
Expenses: | ||||
Net losses and loss expenses incurred | 1,622,006 | 1,583,456 | ||
Claims and policy benefits | 10,307 | 7,291 | ||
Acquisition costs | 463,827 | 435,869 | [1] | |
Operating expenses | 472,563 | 468,038 | ||
Foreign exchange (gains) losses | 9,841 | (3,336) | ||
Interest expense | 53,545 | 50,711 | ||
Total expenses | 2,632,089 | 2,542,029 | ||
Income (loss) before income tax expense and income (loss) from operating affiliate | 182,853 | 213,332 | ||
Income (loss) from operating affiliates | 10,282 | 13,609 | ||
Equity in net earnings (losses) of subsidiaries | 0 | 0 | ||
Provision (benefit) for income tax | 31,902 | 13,092 | ||
Net income (loss) | 161,233 | 213,849 | ||
Non-controlling interests | 8,585 | 61,006 | ||
Net income (loss) attributable to common shareholders | 152,648 | 152,843 | ||
Comprehensive income (loss) | (206,575) | 282,271 | ||
Life Funds Withheld Assets | ||||
Revenues: | ||||
Net investment income | 30,398 | 33,364 | ||
Net realized and unrealized gains (losses) on derivative instruments | 22,921 | (50,101) | ||
Consolidating Adjustments and Eliminations | ||||
Revenues: | ||||
Net premiums earned | 0 | 0 | ||
Net investment income | 0 | (83) | ||
Total realized investment gains (losses) | 0 | 0 | ||
Net realized and unrealized gains (losses) on derivative instruments | 0 | 0 | ||
Income (loss) from investment affiliates | 0 | 0 | ||
Fee income and other | 0 | 0 | ||
Total revenues | 0 | (83) | ||
Expenses: | ||||
Net losses and loss expenses incurred | 0 | 0 | ||
Claims and policy benefits | 0 | 0 | ||
Acquisition costs | 0 | 0 | ||
Operating expenses | 0 | 0 | ||
Foreign exchange (gains) losses | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Total expenses | 0 | 0 | ||
Income (loss) before income tax expense and income (loss) from operating affiliate | 0 | (83) | ||
Income (loss) from operating affiliates | 0 | 0 | ||
Equity in net earnings (losses) of subsidiaries | (419,046) | (408,642) | ||
Provision (benefit) for income tax | 0 | 0 | ||
Net income (loss) | (419,046) | (408,725) | ||
Non-controlling interests | 0 | (83) | ||
Net income (loss) attributable to common shareholders | (419,046) | (408,642) | ||
Comprehensive income (loss) | 299,400 | (667,498) | ||
Consolidating Adjustments and Eliminations | Life Funds Withheld Assets | ||||
Revenues: | ||||
Net realized and unrealized gains (losses) on derivative instruments | 0 | 0 | ||
XL-Group/XL-Ireland | ||||
Revenues: | ||||
Net premiums earned | [2] | 0 | 0 | |
Net investment income | [2] | 8 | 83 | |
Total realized investment gains (losses) | [2] | 0 | 0 | |
Net realized and unrealized gains (losses) on derivative instruments | [2] | 0 | 0 | |
Income (loss) from investment affiliates | [2] | 0 | 0 | |
Fee income and other | [2] | 4 | 0 | |
Total revenues | [2] | 12 | 83 | |
Expenses: | ||||
Net losses and loss expenses incurred | [2] | 0 | 0 | |
Claims and policy benefits | [2] | 0 | 0 | |
Acquisition costs | [2] | 0 | 0 | |
Operating expenses | [2] | 30,862 | 16,180 | |
Foreign exchange (gains) losses | [2] | 1,270 | 176 | |
Interest expense | [2] | 0 | 0 | |
Total expenses | [2] | 32,132 | 16,356 | |
Income (loss) before income tax expense and income (loss) from operating affiliate | [2] | (32,120) | (16,273) | |
Income (loss) from operating affiliates | [2] | 0 | 0 | |
Equity in net earnings (losses) of subsidiaries | [2] | 184,768 | 169,116 | |
Provision (benefit) for income tax | [2] | 0 | 0 | |
Net income (loss) | [2] | 152,648 | 152,843 | |
Non-controlling interests | [2] | 0 | 0 | |
Net income (loss) attributable to common shareholders | [2] | 152,648 | 152,843 | |
Comprehensive income (loss) | [2] | (206,575) | 282,271 | |
XL-Group/XL-Ireland | Life Funds Withheld Assets | ||||
Revenues: | ||||
Net realized and unrealized gains (losses) on derivative instruments | [2] | 0 | 0 | |
XLIT | ||||
Revenues: | ||||
Net premiums earned | 0 | 0 | ||
Net investment income | 3,287 | 2,313 | ||
Total realized investment gains (losses) | (1,586) | (777) | ||
Net realized and unrealized gains (losses) on derivative instruments | 0 | 0 | ||
Income (loss) from investment affiliates | 0 | 0 | ||
Fee income and other | 0 | 0 | ||
Total revenues | 1,701 | 1,536 | ||
Expenses: | ||||
Net losses and loss expenses incurred | 0 | 0 | ||
Claims and policy benefits | 0 | 0 | ||
Acquisition costs | 0 | 0 | ||
Operating expenses | 842 | 509 | ||
Foreign exchange (gains) losses | 510 | 1 | ||
Interest expense | 40,039 | 35,147 | ||
Total expenses | 41,391 | 35,657 | ||
Income (loss) before income tax expense and income (loss) from operating affiliate | (39,690) | (34,121) | ||
Income (loss) from operating affiliates | 0 | 0 | ||
Equity in net earnings (losses) of subsidiaries | 234,278 | 239,526 | ||
Provision (benefit) for income tax | 0 | 0 | ||
Net income (loss) | 194,588 | 205,405 | ||
Non-controlling interests | 9,820 | 36,289 | ||
Net income (loss) attributable to common shareholders | 184,768 | 169,116 | ||
Comprehensive income (loss) | (174,455) | 298,544 | ||
XLIT | Life Funds Withheld Assets | ||||
Revenues: | ||||
Net realized and unrealized gains (losses) on derivative instruments | 0 | 0 | ||
Other XL Subsidiaries | ||||
Revenues: | ||||
Net premiums earned | 2,600,288 | 2,522,791 | ||
Net investment income | 215,186 | 198,219 | ||
Total realized investment gains (losses) | (81,769) | 38,063 | ||
Net realized and unrealized gains (losses) on derivative instruments | 4,221 | (7,069) | ||
Income (loss) from investment affiliates | 45,669 | 38,261 | ||
Fee income and other | 6,713 | 13,661 | ||
Total revenues | 2,813,229 | 2,753,825 | ||
Expenses: | ||||
Net losses and loss expenses incurred | 1,622,006 | 1,583,456 | ||
Claims and policy benefits | 10,307 | 7,291 | ||
Acquisition costs | 463,827 | 435,869 | ||
Operating expenses | 440,859 | 451,349 | ||
Foreign exchange (gains) losses | 8,061 | (3,513) | ||
Interest expense | 13,506 | 15,564 | ||
Total expenses | 2,558,566 | 2,490,016 | ||
Income (loss) before income tax expense and income (loss) from operating affiliate | 254,663 | 263,809 | ||
Income (loss) from operating affiliates | 10,282 | 13,609 | ||
Equity in net earnings (losses) of subsidiaries | 0 | 0 | ||
Provision (benefit) for income tax | 31,902 | 13,092 | ||
Net income (loss) | 233,043 | 264,326 | ||
Non-controlling interests | (1,235) | 24,800 | ||
Net income (loss) attributable to common shareholders | 234,278 | 239,526 | ||
Comprehensive income (loss) | (124,945) | 368,954 | ||
Other XL Subsidiaries | Life Funds Withheld Assets | ||||
Revenues: | ||||
Net realized and unrealized gains (losses) on derivative instruments | $ 22,921 | $ (50,101) | ||
[1] | The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Company's acquisition of Catlin Group Ltd in 2015 ("Catlin Acquisition") within the respective segments. | |||
[2] | Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Guarantor Financial Informati78
Guarantor Financial Information Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Cash flows provided by (used in) operating activities: | |||
Net cash provided by (used in) operating activities | $ (238,124) | $ (47,497) | |
Cash flows provided by (used in) investing activities: | |||
Proceeds from sale of fixed maturities and short-term investments | 4,369,199 | 2,492,005 | |
Proceeds from redemption of fixed maturities and short-term investments | 701,404 | 1,228,356 | |
Proceeds from sale of equity securities | 78,716 | 46,379 | |
Purchases of fixed maturities and short term investments | (4,917,191) | (3,633,007) | |
Purchases of equity securities | (33,230) | (47,967) | |
Proceeds from sale of affiliates | 244,340 | 168,237 | |
Purchases of affiliates | (76,014) | (35,926) | |
Returns of capital from subsidiaries | 0 | ||
Other, net | (26,782) | 23,429 | |
Net cash provided by (used in) investing activities | 340,442 | 241,506 | |
Cash flows provided by (used in) financing activities: | |||
Proceeds from issuance of ordinary shares and exercise of stock options | 46,504 | 23,296 | |
Buybacks of common shares | (1,663) | (200,488) | |
Employee withholding on share-based compensation | (16,696) | (22,871) | |
Dividends paid on common shares | 0 | (58,392) | |
Return of capital | 0 | ||
Distributions to non-controlling interests | (15,946) | (25,400) | |
Contributions from non-controlling interests | 439 | 26 | |
Contingent consideration paid on business combination | (5,000) | 0 | |
Deposit liabilities | (71,124) | (7,771) | |
Net cash provided by (used in) financing activities | (63,486) | (291,600) | |
Effects of exchange rate changes on foreign currency cash | 7,503 | 30,273 | |
Increase (decrease) in cash, cash equivalents and restricted cash | 46,335 | (67,318) | |
Cash, cash equivalents and restricted cash - beginning of year | 3,593,451 | 3,580,492 | |
Cash, cash equivalents and restricted cash - end of period | 3,639,786 | 3,513,174 | |
Consolidating Adjustments and Eliminations | |||
Cash flows provided by (used in) operating activities: | |||
Net cash provided by (used in) operating activities | 0 | (400,000) | |
Cash flows provided by (used in) investing activities: | |||
Proceeds from sale of fixed maturities and short-term investments | 0 | 0 | |
Proceeds from redemption of fixed maturities and short-term investments | 0 | 0 | |
Proceeds from sale of equity securities | 0 | 0 | |
Purchases of fixed maturities and short term investments | 0 | 0 | |
Purchases of equity securities | 0 | 0 | |
Proceeds from sale of affiliates | 0 | 0 | |
Purchases of affiliates | 0 | 0 | |
Returns of capital from subsidiaries | (11,000) | ||
Other, net | 0 | ||
Net cash provided by (used in) investing activities | (11,000) | 0 | |
Cash flows provided by (used in) financing activities: | |||
Proceeds from issuance of ordinary shares and exercise of stock options | 0 | 0 | |
Buybacks of common shares | 0 | 0 | |
Employee withholding on share-based compensation | 0 | 0 | |
Dividends paid on common shares | 400,000 | ||
Return of capital | 11,000 | ||
Distributions to non-controlling interests | 0 | 0 | |
Contributions from non-controlling interests | 0 | 0 | |
Contingent consideration paid on business combination | 0 | ||
Deposit liabilities | 0 | 0 | |
Net cash provided by (used in) financing activities | 11,000 | 400,000 | |
Effects of exchange rate changes on foreign currency cash | 0 | 0 | |
Increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 | |
Cash, cash equivalents and restricted cash - beginning of year | 0 | 0 | |
Cash, cash equivalents and restricted cash - end of period | 0 | 0 | |
XL-Group/XL-Ireland | |||
Cash flows provided by (used in) operating activities: | |||
Net cash provided by (used in) operating activities | [1] | (39,431) | 235,642 |
Cash flows provided by (used in) investing activities: | |||
Proceeds from sale of fixed maturities and short-term investments | [1] | 0 | 0 |
Proceeds from redemption of fixed maturities and short-term investments | [1] | 0 | 0 |
Proceeds from sale of equity securities | [1] | 0 | 0 |
Purchases of fixed maturities and short term investments | [1] | 0 | 0 |
Purchases of equity securities | [1] | 0 | 0 |
Proceeds from sale of affiliates | [1] | 0 | 0 |
Purchases of affiliates | [1] | 0 | 0 |
Returns of capital from subsidiaries | [1] | 11,000 | |
Other, net | [1] | 0 | 0 |
Net cash provided by (used in) investing activities | [1] | 11,000 | 0 |
Cash flows provided by (used in) financing activities: | |||
Proceeds from issuance of ordinary shares and exercise of stock options | [1] | 46,504 | 23,296 |
Buybacks of common shares | [1] | (1,663) | (200,488) |
Employee withholding on share-based compensation | [1] | 0 | 0 |
Dividends paid on common shares | [1] | (58,392) | |
Return of capital | [1] | 0 | |
Distributions to non-controlling interests | [1] | 0 | 0 |
Contributions from non-controlling interests | [1] | 0 | 0 |
Contingent consideration paid on business combination | 0 | ||
Deposit liabilities | [1] | 0 | 0 |
Net cash provided by (used in) financing activities | [1] | 44,841 | (235,584) |
Effects of exchange rate changes on foreign currency cash | [1] | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | [1] | 16,410 | 58 |
Cash, cash equivalents and restricted cash - beginning of year | [1] | 3,950 | 1,022 |
Cash, cash equivalents and restricted cash - end of period | [1] | 20,360 | 1,080 |
XLIT | |||
Cash flows provided by (used in) operating activities: | |||
Net cash provided by (used in) operating activities | 38,440 | 118,694 | |
Cash flows provided by (used in) investing activities: | |||
Proceeds from sale of fixed maturities and short-term investments | 127,615 | 547 | |
Proceeds from redemption of fixed maturities and short-term investments | 37,790 | 44,453 | |
Proceeds from sale of equity securities | 0 | 677 | |
Purchases of fixed maturities and short term investments | (107,765) | (3,098) | |
Purchases of equity securities | 0 | 0 | |
Proceeds from sale of affiliates | 0 | 0 | |
Purchases of affiliates | 0 | 0 | |
Returns of capital from subsidiaries | 0 | ||
Other, net | 0 | 0 | |
Net cash provided by (used in) investing activities | 57,640 | 42,579 | |
Cash flows provided by (used in) financing activities: | |||
Proceeds from issuance of ordinary shares and exercise of stock options | 0 | 0 | |
Buybacks of common shares | 0 | 0 | |
Employee withholding on share-based compensation | 0 | 0 | |
Dividends paid on common shares | 0 | ||
Return of capital | (11,000) | ||
Distributions to non-controlling interests | (9,820) | (3,701) | |
Contributions from non-controlling interests | 0 | 0 | |
Contingent consideration paid on business combination | 0 | ||
Deposit liabilities | 0 | 0 | |
Net cash provided by (used in) financing activities | (20,820) | (3,701) | |
Effects of exchange rate changes on foreign currency cash | 0 | 0 | |
Increase (decrease) in cash, cash equivalents and restricted cash | 75,260 | 157,572 | |
Cash, cash equivalents and restricted cash - beginning of year | 158,688 | 84,286 | |
Cash, cash equivalents and restricted cash - end of period | 233,948 | 241,858 | |
Other XL Subsidiaries | |||
Cash flows provided by (used in) operating activities: | |||
Net cash provided by (used in) operating activities | (237,133) | (1,833) | |
Cash flows provided by (used in) investing activities: | |||
Proceeds from sale of fixed maturities and short-term investments | 4,241,584 | 2,491,458 | |
Proceeds from redemption of fixed maturities and short-term investments | 663,614 | 1,183,903 | |
Proceeds from sale of equity securities | 78,716 | 45,702 | |
Purchases of fixed maturities and short term investments | (4,809,426) | (3,629,909) | |
Purchases of equity securities | (33,230) | (47,967) | |
Proceeds from sale of affiliates | 244,340 | 168,237 | |
Purchases of affiliates | (76,014) | (35,926) | |
Returns of capital from subsidiaries | 0 | ||
Other, net | (26,782) | 23,429 | |
Net cash provided by (used in) investing activities | 282,802 | 198,927 | |
Cash flows provided by (used in) financing activities: | |||
Proceeds from issuance of ordinary shares and exercise of stock options | 0 | 0 | |
Buybacks of common shares | 0 | 0 | |
Employee withholding on share-based compensation | (16,696) | (22,871) | |
Dividends paid on common shares | (400,000) | ||
Return of capital | 0 | ||
Distributions to non-controlling interests | (6,126) | (21,699) | |
Contributions from non-controlling interests | 439 | 26 | |
Contingent consideration paid on business combination | (5,000) | ||
Deposit liabilities | (71,124) | (7,771) | |
Net cash provided by (used in) financing activities | (98,507) | (452,315) | |
Effects of exchange rate changes on foreign currency cash | 7,503 | 30,273 | |
Increase (decrease) in cash, cash equivalents and restricted cash | (45,335) | (224,948) | |
Cash, cash equivalents and restricted cash - beginning of year | 3,430,813 | 3,495,184 | |
Cash, cash equivalents and restricted cash - end of period | $ 3,385,478 | $ 3,270,236 | |
[1] | Includes XL-Ireland, which was the former ultimate parent and is now in liquidation proceedings. The Company expects the net assets of XL-Ireland to be distributed to XL Group upon completion of the liquidation. |
Guarantor Financial Informati79
Guarantor Financial Information Narrative (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | |
Percentage ownership of subsidiaries | 100.00% |
XL Group Ltd [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Percentage ownership of subsidiaries | 100.00% |
XL Cayman [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Percentage ownership of subsidiaries | 100.00% |