|
|
|
Bermuda
(State or other jurisdiction
of incorporation or organization) |
98-1155442
(I.R.S. Employer Identification Number)
|
Waterloo House, 1st Floor
100 Pitts Bay Road, Pembroke HM 08, Bermuda
(Address of principal executive offices)
|
(441) 278-3455
(Registrant’s telephone number, including area code)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Shares
|
|
WTRE
|
|
Nasdaq Global Select Market
|
8½% Cumulative Redeemable Preference Shares
|
|
WTREP
|
|
Nasdaq Global Select Market
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☐
|
Emerging growth company ☒
|
|
Watford Holdings Ltd.
|
|
|
Index to Form 10-K
|
|
|
|
Page
|
|
||
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
|
|
Item 15.
|
||
Item 16.
|
•
|
“ACGL” refers to Arch Capital Group Ltd. and its controlled subsidiaries;
|
•
|
“Arch” refers to any one or more of the following direct or indirect subsidiaries of ACGL, as applicable in the context in which such term appears:
|
•
|
Arch Investment Management Ltd., or AIM, which manages the majority of our investment grade portfolio;
|
•
|
Arch Reinsurance Company, or ARC, which is a party to certain quota share agreements with one or more of our operating subsidiaries and a services agreement with Watford Holdings (U.S.) Inc.;
|
•
|
Arch Reinsurance Ltd., or ARL, which is a party to certain quota share agreements with one or more of our operating subsidiaries and owned approximately 12.5% of our outstanding common shares as of December 31, 2019;
|
•
|
Arch Underwriters Inc., or AUI, which manages the underwriting business of our U.S. operating subsidiaries;
|
•
|
Arch Underwriters Ltd., or AUL, which manages the underwriting business of our non-U.S. operating subsidiaries, including Watford Re;
|
•
|
“HPS” refers to HPS Investment Partners, LLC (formerly known as Highbridge Principal Strategies, LLC), which manages our non-investment grade portfolio, as well as accounts in our investment grade portfolio;
|
•
|
our “Investment Managers” refers to AIM, HPS or any other investment managers that manage our investment grade portfolio or our non-investment grade portfolio from time to time;
|
•
|
“Watford,” “we,” “us” and “our” refers to Watford Holdings Ltd. and its subsidiaries;
|
•
|
“Watford Holdings” refers to our company, Watford Holdings Ltd., a Bermuda exempted company;
|
•
|
“Watford Re” refers to Watford Re Ltd., a Bermuda domiciled insurance company and a wholly-owned subsidiary of our company;
|
•
|
“Watford Trust” refers to Watford Asset Trust I, a statutory trust organized under the laws of the State of Delaware;
|
•
|
“WIC” refers to Watford Insurance Company, a New Jersey domiciled insurance company and a wholly-owned subsidiary of our company;
|
•
|
“WICE” refers to Watford Insurance Company Europe Limited, a Gibraltar domiciled insurance company and a wholly-owned subsidiary of our company; and
|
•
|
“WSIC” refers to Watford Specialty Insurance Company, a New Jersey domiciled insurance company and a wholly-owned subsidiary of our company.
|
•
|
our limited operating history;
|
•
|
fluctuations in the results of our operations;
|
•
|
our ability to compete successfully with more established competitors;
|
•
|
our losses exceeding our reserves;
|
•
|
downgrades, potential downgrades or other negative actions by rating agencies;
|
•
|
our dependence on key executives and inability to attract qualified personnel, or the potential loss of Bermudian personnel as a result of Bermuda employment restrictions;
|
•
|
our dependence on letter of credit facilities that may not be available on commercially acceptable terms;
|
•
|
our potential inability to pay dividends or distributions;
|
•
|
our potential need for additional capital in the future and the potential unavailability of such capital to us on favorable terms or at all;
|
•
|
our dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting;
|
•
|
the suspension or revocation of our subsidiaries’ insurance licenses;
|
•
|
Watford Holdings potentially being deemed an investment company under U.S. federal securities law;
|
•
|
the potential characterization of us and/or any of our subsidiaries as a passive foreign investment company, or PFIC;
|
•
|
our dependence on Arch for services critical to our underwriting operations;
|
•
|
changes to our strategic relationship with Arch or the termination by Arch of any of our services agreements or quota share agreements;
|
•
|
our dependence on HPS and AIM to implement our investment strategy;
|
•
|
the termination by HPS or AIM of any of our investment management agreements;
|
•
|
risks associated with our investment strategy being greater than those faced by competitors;
|
•
|
changes in the regulatory environment;
|
•
|
our potentially becoming subject to U.S. federal income taxation;
|
•
|
our potentially becoming subject to U.S. withholding and information reporting requirements under the U.S. Foreign Account Tax Compliance Act, or FATCA, provisions;
|
•
|
our ability to complete acquisitions and integrate businesses successfully; and
|
•
|
the other risks identified in this report, including, without limitation, those under the sections titled Part I Item 1A “Risk factors” and Part II Item 7 “Management’s discussion and analysis of financial condition and results of operations.”
|
|
Year Ended December 31,
|
|
ITD
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||||
|
($ in thousands)
|
||||||||||||||
Net premiums written
|
$
|
532,862
|
|
|
$
|
604,175
|
|
|
$
|
553,117
|
|
|
$
|
2,944,357
|
|
Net interest income
|
116,211
|
|
|
107,533
|
|
|
86,523
|
|
|
491,192
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Insurance programs and coinsurance - net premiums written
|
$
|
176,711
|
|
|
$
|
139,838
|
|
|
$
|
103,213
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Gross premiums written - assumed from Arch
|
26.6
|
%
|
|
34.4
|
%
|
|
48.2
|
%
|
•
|
Casualty reinsurance: coverage provided to ceding company clients on third-party liability and workers’ compensation exposures, primarily on a treaty basis. Business written includes coverages such as: executive assurance, medical malpractice liability, other professional liability, workers’ compensation, excess and umbrella liability and excess auto liability.
|
•
|
Other specialty reinsurance: coverage provided to ceding company clients for personal and commercial auto (other than excess auto liability), mortgage, surety, accident and health, workers’ compensation catastrophe, agriculture and marine and aviation.
|
•
|
Property catastrophe reinsurance: protects ceding company clients for most catastrophic losses that are covered in the underlying policies. Perils covered may include hurricane, earthquake, flood, tornado, hail and fire, and coverage for other perils on a case-by-case basis. Property catastrophe reinsurance provides coverage on an excess of loss basis when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.
|
•
|
Insurance programs and coinsurance: targeting program managers and/or coinsurers with unique expertise and niche products offering primary and excess general liability, umbrella liability, professional liability, workers’ compensation, personal and commercial automobile, inland marine and property business with minimal catastrophe exposure.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Casualty reinsurance
|
$
|
279,967
|
|
|
37.1
|
%
|
|
$
|
274,661
|
|
|
37.4
|
%
|
|
$
|
284,481
|
|
|
47.4
|
%
|
Other specialty reinsurance
|
119,518
|
|
|
15.8
|
%
|
|
196,170
|
|
|
26.7
|
%
|
|
169,100
|
|
|
28.2
|
%
|
|||
Property catastrophe reinsurance
|
16,226
|
|
|
2.1
|
%
|
|
10,424
|
|
|
1.4
|
%
|
|
12,740
|
|
|
2.1
|
%
|
|||
Insurance programs and coinsurance
|
339,170
|
|
|
45.0
|
%
|
|
253,760
|
|
|
34.5
|
%
|
|
133,983
|
|
|
22.3
|
%
|
|||
Total
|
$
|
754,881
|
|
|
100.0
|
%
|
|
$
|
735,015
|
|
|
100.0
|
%
|
|
$
|
600,304
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Interest income
|
$
|
163,888
|
|
|
$
|
152,916
|
|
|
$
|
125,463
|
|
Investment management fees - related parties
|
(18,392
|
)
|
|
(17,006
|
)
|
|
(21,451
|
)
|
|||
Borrowing and miscellaneous other investment expenses
|
(29,285
|
)
|
|
(28,377
|
)
|
|
(17,489
|
)
|
|||
Net interest income
|
116,211
|
|
|
107,533
|
|
|
86,523
|
|
|||
Realized and unrealized gain (loss) on investments
|
24,243
|
|
|
(113,834
|
)
|
|
1,120
|
|
|||
Investment performance fees - related parties
|
(12,191
|
)
|
|
(48
|
)
|
|
(14,905
|
)
|
|||
Net investment income (loss)
|
$
|
128,263
|
|
|
$
|
(6,349
|
)
|
|
$
|
72,738
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Investment management fees and performance fees to HPS
|
$
|
29,521
|
|
|
$
|
15,878
|
|
|
$
|
35,732
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Investment management fees to AIM
|
$
|
1,062
|
|
|
$
|
1,176
|
|
|
$
|
624
|
|
•
|
United Kingdom: 3 (Land Vehicles), 10 (Motor Vehicle Liability);
|
•
|
France: 1 (Accident), 3 (Land Vehicles), 8 (Fire and Natural Forces), 9 (Damage to Property), 10 (Motor Vehicle Liability), 13 (General Liability); and
|
•
|
Ireland: 1 (Accident), 3 (Land Vehicles), 8 (Fire and Natural Forces), 9 (Damage to Property), 10 (Motor Vehicle Liability), 13 (General Liability).
|
•
|
A business plan must be submitted prior to December 1 of each financial year;
|
•
|
WICE must obtain an annual independent actuarial review of loss reserves;
|
•
|
WICE must provide the GFSC with a copy of any management report provided by its auditors within two weeks of receipt;
|
•
|
WICE must submit to the GFSC copies of board of director and committee minutes and board of directors and committee packs on a quarterly basis once the meetings have been held; and
|
•
|
WICE must hold quarterly meetings of its board of directors.
|
•
|
retain our relationships with Arch and HPS;
|
•
|
attract customers;
|
•
|
attract and retain personnel with underwriting, actuarial and credit analysis expertise;
|
•
|
maintain commercially acceptable claims-paying ability ratings;
|
•
|
evaluate effectively the risks that we assume under the policies and contracts that we write; and
|
•
|
execute our business plan in a timely manner, the failure of which may result in an adverse tax characterization of our company.
|
•
|
general soft conditions in the insurance and reinsurance markets that depress premium rates and/or broaden coverage terms, which reduce expected returns;
|
•
|
difficulty penetrating reinsurance clients’ program structures due to established relationships between such clients (or their intermediaries) and reinsurers previously on the programs;
|
•
|
difficulty in signing program administrators to handle our insurance products due to established relationships between those program administrators and their incumbent insurers;
|
•
|
difficulty in selling our insurance products to prospective policyholders through our selected program administrators due to existing relationships between such policyholders and their current insurers;
|
•
|
possible unwillingness of prospective clients (or their intermediaries) to accept our products based on competitors’ higher ratings, our limited experience and performance history or concerns about our investment strategy; and
|
•
|
competition for business opportunities, including with ACGL. Arch is not contractually obligated to allocate any particular new business opportunity to us, even if it would meet our underwriting criteria. See “-Risks related to Arch.”
|
•
|
if we change our business practice from our business plan;
|
•
|
if our relationship with Arch changes, including any possible ratings effect if ACGL determines to no longer consolidate our results into its financial statements;
|
•
|
if our relationship with HPS changes;
|
•
|
if unfavorable financial or market trends impact us;
|
•
|
if our actual losses exceed our loss reserves;
|
•
|
if we are unable to obtain and retain key personnel;
|
•
|
if our investments incur significant losses;
|
•
|
if our financial results fail to meet, as applicable, A.M. Best’s or KBRA’s minimum expectations for our current rating; and/or
|
•
|
if either A.M. Best or KBRA alters its respective assessment methodologies in a manner that would adversely affect our rating.
|
•
|
integrating financial and operational reporting systems and establishing satisfactory budgetary and other financial controls;
|
•
|
funding increased capital needs, overhead expenses or cash flow shortages that may occur if anticipated sales and revenues are not realized or are delayed, whether by general economic or market conditions or unforeseen internal difficulties;
|
•
|
obtaining management personnel required for expanded operations;
|
•
|
obtaining necessary regulatory permissions;
|
•
|
the value of assets acquired being lower than expected or diminishing due to credit defaults or changes in interest rates and liabilities assumed being greater than expected;
|
•
|
the assets and liabilities we may acquire being subject to foreign currency exchange rate fluctuation; and
|
•
|
financial exposures in the event that the sellers of the entities we acquire are unable or unwilling to meet their indemnification, reinsurance and other obligations to us.
|
•
|
fixed income investments, including, without limitation, corporate debt such as secured and unsecured loans, high yield bonds and structured credit instruments;
|
•
|
loans of portfolio securities;
|
•
|
subordinated loans;
|
•
|
credit default swaps;
|
•
|
equity securities;
|
•
|
equity interests;
|
•
|
equity swaps;
|
•
|
hedging transactions, including derivatives;
|
•
|
short positions, including on individual names or indices;
|
•
|
non-public, restricted and illiquid securities;
|
•
|
equity and credit index options;
|
•
|
futures and options;
|
•
|
call options and put options, on “covered” or “non-covered” bases;
|
•
|
contracts for differences;
|
•
|
co-investments and joint ventures;
|
•
|
special opportunity investments, including, without limitation, as investments in types of activities (such as oil and gas exploration), various types of litigation claims and consumer receivables (such as automobile loans and real estate), commercial receivables, equipment and other leases, residential and commercial mortgage loans, as well as other financial instruments that provide for the contractual or conditional payment of an obligation; and
|
•
|
other derivative instruments, including those that are not presently contemplated for use or that are currently not available, but that may be developed.
|
•
|
maintain minimum levels of capital and surplus;
|
•
|
prescribe and meet solvency standards;
|
•
|
restrict dividends and distributions;
|
•
|
limit transfers of ownership and issuances of shares or changes in control of Watford Holdings, as sole shareholder of Watford Re; and
|
•
|
provide for periodic examinations of Watford Re and Watford Holdings and each entity’s financial condition and the review of actuarial reports related to such examination periods.
|
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation or other entity taxable as a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of the source; or
|
•
|
a trust, if a court within the United States is able to exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) have the authority to control all of its substantial decisions, or if a valid election to be treated as a United States person is in effect with respect to such trust.
|
•
|
general market conditions;
|
•
|
domestic and international economic factors unrelated to our performance;
|
•
|
actual or anticipated fluctuations in our quarterly operating results, including as a result of catastrophes or our investment performance;
|
•
|
changes in or failure to meet publicly disclosed expectations as to our future financial performance;
|
•
|
changes in securities analysts’ estimates of our financial performance or lack of research and reports by industry analysts;
|
•
|
action by institutional shareholders or other large shareholders, including future sales;
|
•
|
speculation in the press or investment community;
|
•
|
investor perception of us and our industry;
|
•
|
changes in market valuations or earnings of similar companies;
|
•
|
announcements by us, our service providers or our competitors of significant products, contracts, acquisitions or strategic partnerships;
|
•
|
any future sales of our common shares or other securities;
|
•
|
potential characterization of us or any of our subsidiaries as a PFIC;
|
•
|
regulatory developments; and
|
•
|
additions or departures of key personnel.
|
•
|
pay claims;
|
•
|
operate and expand our business;
|
•
|
to the extent declared, pay dividends (including the payment of dividends to the holders of our preference shares);
|
•
|
replace or improve capital in the event of significant reinsurance losses or adverse reserve developments;
|
•
|
fund liquidity needs caused by investment losses;
|
•
|
satisfy letters of credit or guarantee bond requirements that may be imposed by our clients or by regulators;
|
•
|
meet rating agency or regulatory capital requirements; and
|
•
|
respond to competitive pressures.
|
•
|
the authorized number of directors may be increased by resolution adopted by the affirmative vote of a majority of the board of directors;
|
•
|
Arch has the right to appoint two individuals to serve as directors on our board of directors, subject to certain conditions;
|
•
|
the board of directors is a classified board in which the directors of the class elected at each annual general meeting holds office for a term of three years, with the term of each class expiring at successive annual general meetings of shareholders;
|
•
|
shareholders have the ability to remove directors for cause and only with the approval of a majority of the total combined voting power of the issued and outstanding shares entitled to vote for the election of directors;
|
•
|
any vacancy on our board of directors may be filled at the meeting at which such director is removed upon the affirmative vote of the holders of a majority of the total combined voting power of the issued and outstanding shares entitled to vote. In the absence of such election or appointment, the board of directors may fill the vacancy. In the event the vacancy to be filled is for a director appointed by Arch, then Arch shall have the right to appoint the director to fill such vacancy;
|
•
|
a plurality of the votes cast is required for the election of directors;
|
•
|
shareholder action may only be taken at an annual meeting or special meeting of shareholders and may not be taken by written consent in lieu of a meeting;
|
•
|
advance notice of shareholders’ proposals is required in connection with annual general meetings;
|
•
|
a supermajority vote of shareholders is required to effect certain amendments to our bye-laws;
|
•
|
we are prohibited from engaging in a business combination with a person who acquires at least 15% of our common shares for a period of three years from the date such person acquired such common shares unless such business combination is approved prior to the acquisition by our board of directors and shareholders;
|
•
|
subject to any resolution of our shareholders to the contrary, our board of directors is permitted to issue any of our authorized but unissued shares and to fix the price, rights, preferences, privileges and restrictions of any such shares without any further vote or action by our shareholders;
|
•
|
the quorum required for a general meeting of shareholders is two or more persons present in person at the start of the meeting and representing in person or by proxy not less than a majority of the total combined voting power of the issued and outstanding shares entitled to vote; and
|
•
|
subject to limited exceptions, each holder of shares generally will be limited to voting (directly, indirectly or constructively, as determined for U.S. federal income tax purposes) that number of shares equal to 9.9% of the total combined voting power of all classes of shares of our company entitled to vote.
|
•
|
the material facts as to such interested director’s relationship or interests were disclosed or were known to the board of directors and the board of directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors;
|
•
|
such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction was specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or
|
•
|
the transaction was fair to the corporation as of the time it was authorized, approved or ratified.
|
•
|
prepare and file periodic reports, and distribute other shareholder communications, in compliance with the federal securities laws and the Nasdaq Stock Market rules;
|
•
|
maintain comprehensive compliance, investor relations and internal audit functions; and
|
•
|
evaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.
|
|
Base Period
|
|
||||
Company Name / Index
|
3/28/2019
|
|
12/31/2019
|
|
||
Watford Holdings Ltd.
|
$
|
100.00
|
|
$
|
93.19
|
|
S&P 500 Index
|
$
|
100.00
|
|
$
|
116.48
|
|
S&P 500 Property & Casualty Insurance Index
|
$
|
100.00
|
|
$
|
110.22
|
|
|
|
Issuer Purchases of Common Shares
|
||||||||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan or Program (1)
|
||||||
10/1/2019 - 10/31/2019
|
|
1,048,139
|
|
|
$
|
27.64
|
|
|
1,048,139
|
|
|
$
|
46,026
|
|
11/1/2019 - 11/30/2019
|
|
898,498
|
|
|
26.23
|
|
|
1,946,637
|
|
|
22,460
|
|
||
12/1/2019 - 12/31/2019
|
|
842,768
|
|
|
26.65
|
|
|
2,789,405
|
|
|
—
|
|
||
Total
|
|
2,789,405
|
|
|
$
|
26.89
|
|
|
2,789,405
|
|
|
$
|
—
|
|
|
December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
($ in thousands except share and per share data)
|
||||||||||||||||||
Selected balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments
|
$
|
2,709,137
|
|
|
$
|
2,738,367
|
|
|
$
|
2,496,215
|
|
|
$
|
1,923,549
|
|
|
$
|
1,682,731
|
|
Net assets (1)
|
2,170,726
|
|
|
2,019,348
|
|
|
1,924,809
|
|
|
1,606,952
|
|
|
1,237,152
|
|
|||||
Premiums receivable
|
273,657
|
|
|
227,301
|
|
|
177,492
|
|
|
189,911
|
|
|
162,263
|
|
|||||
Cash and cash equivalents
|
102,437
|
|
|
63,529
|
|
|
54,503
|
|
|
74,893
|
|
|
108,550
|
|
|||||
Total Assets
|
3,550,856
|
|
|
3,372,856
|
|
|
3,014,583
|
|
|
2,382,750
|
|
|
2,122,438
|
|
|||||
Reserves for losses and loss adjustment expenses
|
1,263,628
|
|
|
1,032,760
|
|
|
798,262
|
|
|
510,809
|
|
|
290,997
|
|
|||||
Unearned premiums
|
438,907
|
|
|
390,114
|
|
|
330,644
|
|
|
293,480
|
|
|
249,980
|
|
|||||
Revolving credit agreement borrowings
|
484,287
|
|
|
693,917
|
|
|
549,165
|
|
|
258,861
|
|
|
435,278
|
|
|||||
Senior notes
|
172,418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
2,626,198
|
|
|
2,262,256
|
|
|
1,846,079
|
|
|
1,205,126
|
|
|
1,072,208
|
|
|||||
Contingently redeemable preferred shares
|
52,305
|
|
|
220,992
|
|
|
220,622
|
|
|
220,253
|
|
|
219,882
|
|
|||||
Total shareholders’ equity
|
872,353
|
|
|
889,608
|
|
|
947,882
|
|
|
957,371
|
|
|
830,348
|
|
|||||
Book value per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per diluted common share (2)
|
$
|
43.49
|
|
|
$
|
39.22
|
|
|
$
|
41.79
|
|
|
$
|
42.21
|
|
|
$
|
36.61
|
|
Growth in book value per diluted common share (2)
|
10.9
|
%
|
|
(6.1
|
)%
|
|
(1.0
|
)%
|
|
15.3
|
%
|
|
(3.9
|
)%
|
|||||
Common shares outstanding - diluted (3)
|
20,058,757
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||
Underwriting and other ratios:
|
|
|||||||||||||
Loss ratio (1)
|
81.4
|
%
|
|
76.2
|
%
|
|
82.1
|
%
|
|
68.7
|
%
|
|
69.8
|
%
|
Acquisition expense ratio (2)
|
22.8
|
%
|
|
24.4
|
%
|
|
26.5
|
%
|
|
29.2
|
%
|
|
29.3
|
%
|
General and administrative expense ratio (3)
|
5.5
|
%
|
|
3.9
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
|
3.0
|
%
|
Combined ratio (4)
|
109.7
|
%
|
|
104.5
|
%
|
|
112.6
|
%
|
|
101.7
|
%
|
|
102.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted loss ratio (5)
|
81.0
|
%
|
|
75.9
|
%
|
|
81.6
|
%
|
|
68.2
|
%
|
|
69.0
|
%
|
Adjusted acquisition expense ratio (5)
|
22.7
|
%
|
|
24.3
|
%
|
|
26.3
|
%
|
|
29.0
|
%
|
|
28.9
|
%
|
Adjusted general and administrative expense ratio (5)
|
3.6
|
%
|
|
3.1
|
%
|
|
3.3
|
%
|
|
3.2
|
%
|
|
2.6
|
%
|
Adjusted combined ratio (5)
|
107.3
|
%
|
|
103.3
|
%
|
|
111.2
|
%
|
|
100.4
|
%
|
|
100.5
|
%
|
•
|
premiums from our insurance and reinsurance lines of business; and
|
•
|
income from investments.
|
•
|
loss and loss adjustment expenses;
|
•
|
acquisition expenses;
|
•
|
general and administrative expenses;
|
•
|
investment related expenses; and
|
•
|
interest expense.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
||||||||
|
($ in thousands)
|
||||||||||||||||
Gross premiums written
|
$
|
754,881
|
|
|
2.7
|
%
|
|
$
|
735,015
|
|
|
22.4
|
%
|
|
$
|
600,304
|
|
Gross premiums ceded
|
(222,019
|
)
|
|
|
|
(130,840
|
)
|
|
|
|
(47,187
|
)
|
|||||
Net premiums written
|
532,862
|
|
|
(11.8
|
)%
|
|
604,175
|
|
|
9.2
|
%
|
|
553,117
|
|
|||
Net premiums earned
|
556,690
|
|
|
(3.8
|
)%
|
|
578,862
|
|
|
8.9
|
%
|
|
531,726
|
|
|||
Loss and loss adjustment expenses
|
(453,135
|
)
|
|
|
|
(441,255
|
)
|
|
|
|
(436,402
|
)
|
|||||
Acquisition expenses
|
(126,788
|
)
|
|
|
|
(141,136
|
)
|
|
|
|
(140,726
|
)
|
|||||
General and administrative expenses (1)
|
(30,843
|
)
|
|
|
|
(22,311
|
)
|
|
|
|
(21,174
|
)
|
|||||
Underwriting income (loss) (2)
|
(54,076
|
)
|
|
(109.3
|
)%
|
|
(25,840
|
)
|
|
61.2
|
%
|
|
(66,576
|
)
|
|||
Other underwriting income (loss)
|
2,412
|
|
|
|
|
2,722
|
|
|
|
|
3,180
|
|
|||||
Interest income
|
163,888
|
|
|
|
|
152,916
|
|
|
|
|
125,463
|
|
|||||
Investment management fees - related parties
|
(18,392
|
)
|
|
|
|
(17,006
|
)
|
|
|
|
(21,451
|
)
|
|||||
Borrowing and miscellaneous other investment expenses
|
(29,285
|
)
|
|
|
|
(28,377
|
)
|
|
|
|
(17,489
|
)
|
|||||
Net interest income
|
116,211
|
|
|
|
|
107,533
|
|
|
|
|
86,523
|
|
|||||
Realized and unrealized gain (loss) on investments
|
24,243
|
|
|
|
|
(113,834
|
)
|
|
|
|
1,120
|
|
|||||
Investment performance fees - related parties
|
(12,191
|
)
|
|
|
|
(48
|
)
|
|
|
|
(14,905
|
)
|
|||||
Net investment income (loss)
|
128,263
|
|
|
N.M.
|
|
|
(6,349
|
)
|
|
(108.7
|
)%
|
|
72,738
|
|
|||
Interest expense
|
(5,791
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Net foreign exchange gains (losses)
|
(8,247
|
)
|
|
|
|
3,611
|
|
|
|
|
1,420
|
|
|||||
Non-recurring direct listing expenses
|
—
|
|
|
|
|
(9,000
|
)
|
|
|
|
—
|
|
|||||
Income tax expense
|
(20
|
)
|
|
|
|
(27
|
)
|
|
|
|
(21
|
)
|
|||||
Net income (loss) before preference dividends and redemption costs
|
62,541
|
|
|
|
|
(34,883
|
)
|
|
|
|
10,741
|
|
|||||
Preference dividends
|
(13,632
|
)
|
|
|
|
(19,633
|
)
|
|
|
|
(19,633
|
)
|
|||||
Accelerated amortization of costs related to the redemption of preference shares
|
(4,164
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Net income (loss) available to common shareholders
|
$
|
44,745
|
|
|
(182.1
|
)%
|
|
$
|
(54,516
|
)
|
|
N.M.
|
|
|
$
|
(8,892
|
)
|
•
|
Casualty reinsurance: coverage provided to ceding company clients on third-party liability and workers’ compensation exposures, primarily on a treaty basis. Business written includes coverages such as: executive assurance, medical malpractice liability, other professional liability, workers’ compensation, excess and umbrella liability and excess auto liability.
|
•
|
Other specialty reinsurance: coverage provided to ceding company clients for personal and commercial auto (other than excess auto liability), mortgage, surety, accident and health, workers’ compensation catastrophe, agriculture, marine and aviation.
|
•
|
Property catastrophe reinsurance: protects ceding company clients for most catastrophic losses that are covered in the underlying policies. Perils covered may include hurricane, earthquake, flood, tornado, hail and fire, and coverage for other perils on a case-by-case basis. Property catastrophe reinsurance provides coverage on an excess of loss basis when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.
|
•
|
Insurance programs and coinsurance: targeting program managers and/or coinsurers with unique expertise and niche products offering primary and excess general liability, umbrella liability, professional liability, workers’ compensation, personal and commercial automobile, inland marine and property business with minimal catastrophe exposure.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Casualty reinsurance
|
$
|
279,967
|
|
|
37.1
|
%
|
|
$
|
274,661
|
|
|
37.4
|
%
|
|
$
|
284,481
|
|
|
47.4
|
%
|
Other specialty reinsurance
|
119,518
|
|
|
15.8
|
%
|
|
196,170
|
|
|
26.7
|
%
|
|
169,100
|
|
|
28.2
|
%
|
|||
Property catastrophe reinsurance
|
16,226
|
|
|
2.1
|
%
|
|
10,424
|
|
|
1.4
|
%
|
|
12,740
|
|
|
2.1
|
%
|
|||
Insurance programs and coinsurance
|
339,170
|
|
|
45.0
|
%
|
|
253,760
|
|
|
34.5
|
%
|
|
133,983
|
|
|
22.3
|
%
|
|||
Total
|
$
|
754,881
|
|
|
100.0
|
%
|
|
$
|
735,015
|
|
|
100.0
|
%
|
|
$
|
600,304
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Casualty reinsurance
|
$
|
225,758
|
|
|
42.4
|
%
|
|
$
|
273,048
|
|
|
45.2
|
%
|
|
$
|
281,783
|
|
|
50.9
|
%
|
Other specialty reinsurance
|
114,876
|
|
|
21.6
|
%
|
|
181,096
|
|
|
30.0
|
%
|
|
155,666
|
|
|
28.1
|
%
|
|||
Property catastrophe reinsurance
|
15,517
|
|
|
2.9
|
%
|
|
10,193
|
|
|
1.7
|
%
|
|
12,455
|
|
|
2.3
|
%
|
|||
Insurance programs and coinsurance
|
176,711
|
|
|
33.1
|
%
|
|
139,838
|
|
|
23.1
|
%
|
|
103,213
|
|
|
18.7
|
%
|
|||
Total
|
$
|
532,862
|
|
|
100.0
|
%
|
|
$
|
604,175
|
|
|
100.0
|
%
|
|
$
|
553,117
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Casualty reinsurance
|
$
|
238,437
|
|
|
42.8
|
%
|
|
$
|
278,656
|
|
|
48.1
|
%
|
|
$
|
308,526
|
|
|
57.9
|
%
|
Other specialty reinsurance
|
149,688
|
|
|
26.9
|
%
|
|
162,691
|
|
|
28.1
|
%
|
|
134,855
|
|
|
25.4
|
%
|
|||
Property catastrophe reinsurance
|
13,399
|
|
|
2.4
|
%
|
|
10,998
|
|
|
1.9
|
%
|
|
12,690
|
|
|
2.4
|
%
|
|||
Insurance programs and coinsurance
|
155,166
|
|
|
27.9
|
%
|
|
126,517
|
|
|
21.9
|
%
|
|
75,655
|
|
|
14.2
|
%
|
|||
Total
|
$
|
556,690
|
|
|
100.0
|
%
|
|
$
|
578,862
|
|
|
100.0
|
%
|
|
$
|
531,726
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Loss and Loss Adjustment Expenses
|
|
% of Earned Premiums
|
|
Loss and Loss Adjustment Expenses
|
|
% of Earned Premiums
|
|
Loss and Loss Adjustment Expenses
|
|
% of Earned Premiums
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Current year
|
$
|
429,322
|
|
|
77.1
|
%
|
|
$
|
443,482
|
|
|
76.6
|
%
|
|
$
|
399,530
|
|
|
75.2
|
%
|
Prior year development (favorable)/adverse
|
23,813
|
|
|
4.3
|
%
|
|
(2,227
|
)
|
|
(0.4
|
)%
|
|
36,872
|
|
|
6.9
|
%
|
|||
Loss and loss adjustment expenses
|
$
|
453,135
|
|
|
81.4
|
%
|
|
$
|
441,255
|
|
|
76.2
|
%
|
|
$
|
436,402
|
|
|
82.1
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Net income (loss) available to common shareholders
|
$
|
44,745
|
|
|
$
|
(54,516
|
)
|
|
$
|
(8,892
|
)
|
Preference dividends
|
13,632
|
|
|
19,633
|
|
|
19,633
|
|
|||
Accelerated amortization of costs related to the redemption of preference shares
|
4,164
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) before dividends and redemption costs
|
62,541
|
|
|
(34,883
|
)
|
|
10,741
|
|
|||
Income tax expense
|
20
|
|
|
27
|
|
|
21
|
|
|||
Interest expense
|
5,791
|
|
|
—
|
|
|
—
|
|
|||
Net foreign exchange (gains) losses
|
8,247
|
|
|
(3,611
|
)
|
|
(1,420
|
)
|
|||
Non-recurring direct listing expenses
|
—
|
|
|
9,000
|
|
|
—
|
|
|||
Net investment (income) loss
|
(128,263
|
)
|
|
6,349
|
|
|
(72,738
|
)
|
|||
Other underwriting (income) loss
|
(2,412
|
)
|
|
(2,722
|
)
|
|
(3,180
|
)
|
|||
Underwriting income (loss)
|
(54,076
|
)
|
|
(25,840
|
)
|
|
(66,576
|
)
|
|||
Certain corporate expenses
|
10,812
|
|
|
4,109
|
|
|
3,651
|
|
|||
Other underwriting income (loss)
|
2,412
|
|
|
2,722
|
|
|
3,180
|
|
|||
Adjusted underwriting income (loss)
|
$
|
(40,852
|
)
|
|
$
|
(19,009
|
)
|
|
$
|
(59,745
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||
|
Amount
|
|
Adjustment
|
|
As Adjusted
|
|
Amount
|
|
Adjustment
|
|
As Adjusted
|
|
Amount
|
|
Adjustment
|
|
As Adjusted
|
||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||
Losses and loss adjustment expenses
|
$
|
453,135
|
|
|
$
|
—
|
|
|
$
|
453,135
|
|
|
$
|
441,255
|
|
|
$
|
—
|
|
|
$
|
441,255
|
|
|
$
|
436,402
|
|
|
$
|
—
|
|
|
$
|
436,402
|
|
Acquisition expenses
|
126,788
|
|
|
—
|
|
|
126,788
|
|
|
141,136
|
|
|
—
|
|
|
141,136
|
|
|
140,726
|
|
|
—
|
|
|
140,726
|
|
|||||||||
General & administrative expenses (1)
|
30,843
|
|
|
(10,812
|
)
|
|
20,031
|
|
|
22,311
|
|
|
(4,109
|
)
|
|
18,202
|
|
|
21,174
|
|
|
(3,651
|
)
|
|
17,523
|
|
|||||||||
Net premiums earned (1)(2)
|
556,690
|
|
|
2,412
|
|
|
559,102
|
|
|
578,862
|
|
|
2,722
|
|
|
581,584
|
|
|
531,726
|
|
|
3,180
|
|
|
534,906
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loss ratio
|
81.4
|
%
|
|
|
|
|
|
76.2
|
%
|
|
|
|
|
|
82.1
|
%
|
|
|
|
|
|||||||||||||||
Acquisition expense ratio
|
22.8
|
%
|
|
|
|
|
|
24.4
|
%
|
|
|
|
|
|
26.5
|
%
|
|
|
|
|
|||||||||||||||
General & administrative expense ratio
|
5.5
|
%
|
|
|
|
|
|
3.9
|
%
|
|
|
|
|
|
4.0
|
%
|
|
|
|
|
|||||||||||||||
Combined ratio
|
109.7
|
%
|
|
|
|
|
|
104.5
|
%
|
|
|
|
|
|
112.6
|
%
|
|
|
|
|
|||||||||||||||
Adjusted loss ratio
|
|
|
|
|
81.0
|
%
|
|
|
|
|
|
75.9
|
%
|
|
|
|
|
|
81.6
|
%
|
|||||||||||||||
Adjusted acquisition expense ratio
|
|
|
|
|
22.7
|
%
|
|
|
|
|
|
24.3
|
%
|
|
|
|
|
|
26.3
|
%
|
|||||||||||||||
Adjusted general & administrative expense ratio
|
|
|
|
|
3.6
|
%
|
|
|
|
|
|
3.1
|
%
|
|
|
|
|
|
3.3
|
%
|
|||||||||||||||
Adjusted combined ratio
|
|
|
|
|
107.3
|
%
|
|
|
|
|
|
103.3
|
%
|
|
|
|
|
|
111.2
|
%
|
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||
|
Non-Investment Grade
|
|
Investment Grade
|
|
Cost of
U/W Collateral (4)
|
|
Total
|
|
Non-Investment Grade
|
|
Investment Grade
|
|
Cost of
U/W Collateral (4)
|
|
Total
|
|
Non-Investment Grade
|
|
Investment Grade
|
|
Cost of
U/W Collateral (4)
|
|
Total
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Interest income
|
$
|
139,280
|
|
|
$
|
24,608
|
|
|
$
|
—
|
|
|
$
|
163,888
|
|
|
$
|
135,847
|
|
|
$
|
17,069
|
|
|
$
|
—
|
|
|
$
|
152,916
|
|
|
$
|
118,263
|
|
|
$
|
7,200
|
|
|
$
|
—
|
|
|
$
|
125,463
|
|
Investment management fees - related parties
|
(16,877
|
)
|
|
(1,515
|
)
|
|
—
|
|
|
(18,392
|
)
|
|
(15,818
|
)
|
|
(1,188
|
)
|
|
—
|
|
|
(17,006
|
)
|
|
(20,827
|
)
|
|
(624
|
)
|
|
—
|
|
|
(21,451
|
)
|
||||||||||||
Borrowing and miscellaneous other investment expenses
|
(15,047
|
)
|
|
(983
|
)
|
|
(13,255
|
)
|
|
(29,285
|
)
|
|
(16,994
|
)
|
|
(375
|
)
|
|
(11,008
|
)
|
|
(28,377
|
)
|
|
(14,816
|
)
|
|
(287
|
)
|
|
(2,386
|
)
|
|
(17,489
|
)
|
||||||||||||
Net interest income
|
107,356
|
|
|
22,110
|
|
|
(13,255
|
)
|
|
116,211
|
|
|
103,035
|
|
|
15,506
|
|
|
(11,008
|
)
|
|
107,533
|
|
|
82,620
|
|
|
6,289
|
|
|
(2,386
|
)
|
|
86,523
|
|
||||||||||||
Net realized gains (losses) on investments
|
(13,147
|
)
|
|
5,199
|
|
|
—
|
|
|
(7,948
|
)
|
|
392
|
|
|
(5,180
|
)
|
|
—
|
|
|
(4,788
|
)
|
|
5,989
|
|
|
(5,267
|
)
|
|
—
|
|
|
722
|
|
||||||||||||
Net unrealized gains (losses) on investments (1)
|
24,729
|
|
|
7,462
|
|
|
—
|
|
|
32,191
|
|
|
(105,768
|
)
|
|
(3,278
|
)
|
|
—
|
|
|
(109,046
|
)
|
|
2,029
|
|
|
(1,631
|
)
|
|
—
|
|
|
398
|
|
||||||||||||
Investment performance fees - related parties
|
(12,191
|
)
|
|
—
|
|
|
—
|
|
|
(12,191
|
)
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(14,905
|
)
|
|
—
|
|
|
—
|
|
|
(14,905
|
)
|
||||||||||||
Net investment income (loss)
|
$
|
106,747
|
|
|
$
|
34,771
|
|
|
$
|
(13,255
|
)
|
|
$
|
128,263
|
|
|
$
|
(2,389
|
)
|
|
$
|
7,048
|
|
|
$
|
(11,008
|
)
|
|
$
|
(6,349
|
)
|
|
$
|
75,733
|
|
|
$
|
(609
|
)
|
|
$
|
(2,386
|
)
|
|
$
|
72,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Average total investments (2)
|
$1,872,835
|
|
$
|
900,641
|
|
|
$
|
—
|
|
|
$2,773,476
|
|
$1,851,650
|
|
$
|
812,186
|
|
|
$
|
—
|
|
|
$2,663,836
|
|
$1,701,162
|
|
$
|
547,307
|
|
|
$
|
—
|
|
|
$2,248,469
|
||||||||||||
Average net assets (3)
|
$1,568,980
|
|
$900,069
|
|
$(325,527)
|
|
$2,143,522
|
|
$1,472,297
|
|
$814,154
|
|
$(287,765)
|
|
$1,998,686
|
|
$1,314,708
|
|
$548,797
|
|
$(91,407)
|
|
$1,772,098
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net interest income yield on average net assets (3)
|
6.8
|
%
|
|
2.5
|
%
|
|
|
|
5.4
|
%
|
|
7.0
|
%
|
|
1.9
|
%
|
|
|
|
5.4
|
%
|
|
6.3
|
%
|
|
1.1
|
%
|
|
|
|
4.9
|
%
|
|||||||||||||||
Net investment income return on average total investments (2)
|
5.7
|
%
|
|
3.9
|
%
|
|
|
|
4.6
|
%
|
|
(0.1
|
)%
|
|
0.9
|
%
|
|
|
|
(0.2
|
)%
|
|
4.5
|
%
|
|
(0.1
|
)%
|
|
|
|
3.2
|
%
|
|||||||||||||||
Net investment income return on average net assets (3)
|
6.8
|
%
|
|
3.9
|
%
|
|
(4.1
|
)%
|
|
6.0
|
%
|
|
(0.2
|
)%
|
|
0.9
|
%
|
|
(3.8
|
)%
|
|
(0.3
|
)%
|
|
5.8
|
%
|
|
(0.1
|
)%
|
|
(2.6
|
)%
|
|
4.1
|
%
|
|
As of December 31, 2019
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||
|
Non-Investment Grade
|
|
Investment Grade
|
|
Borrowings for U/W Collateral
|
|
Total
|
|
Non-Investment Grade
|
|
Investment Grade
|
|
Borrowings for U/W Collateral
|
|
Total
|
|
Non-Investment Grade
|
|
Investment Grade
|
|
Borrowings for U/W Collateral
|
|
Total
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Average total investments
|
$
|
1,872,835
|
|
|
$
|
900,641
|
|
|
$
|
—
|
|
|
$
|
2,773,476
|
|
|
$
|
1,851,650
|
|
|
$
|
812,186
|
|
|
$
|
—
|
|
|
$
|
2,663,836
|
|
|
$
|
1,701,162
|
|
|
$
|
547,307
|
|
|
$
|
—
|
|
|
$
|
2,248,469
|
|
Average net assets
|
1,568,980
|
|
|
900,069
|
|
|
(325,527
|
)
|
|
2,143,522
|
|
|
1,472,297
|
|
|
814,154
|
|
|
(287,765
|
)
|
|
1,998,686
|
|
|
1,314,708
|
|
|
548,797
|
|
|
(91,407
|
)
|
|
1,772,098
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total investments
|
$
|
1,862,253
|
|
|
$
|
846,884
|
|
|
$
|
—
|
|
|
$
|
2,709,137
|
|
|
$
|
1,882,591
|
|
|
$
|
855,776
|
|
|
$
|
—
|
|
|
$
|
2,738,367
|
|
|
$
|
1,752,056
|
|
|
$
|
744,159
|
|
|
$
|
—
|
|
|
$
|
2,496,215
|
|
Accrued Investment Income
|
9,679
|
|
|
4,346
|
|
|
—
|
|
|
14,025
|
|
|
15,000
|
|
|
4,461
|
|
|
—
|
|
|
19,461
|
|
|
15,034
|
|
|
3,227
|
|
|
—
|
|
|
18,261
|
|
||||||||||||
Receivable for Securities Sold
|
16,275
|
|
|
13
|
|
|
—
|
|
|
16,288
|
|
|
23,820
|
|
|
687
|
|
|
—
|
|
|
24,507
|
|
|
36,355
|
|
|
19
|
|
|
—
|
|
|
36,374
|
|
||||||||||||
Less: Payable for Securities Purchased
|
18,180
|
|
|
—
|
|
|
—
|
|
|
18,180
|
|
|
60,142
|
|
|
—
|
|
|
—
|
|
|
60,142
|
|
|
42,501
|
|
|
—
|
|
|
—
|
|
|
42,501
|
|
||||||||||||
Less: Payable for Securities Sold Short
|
66,257
|
|
|
—
|
|
|
—
|
|
|
66,257
|
|
|
8,928
|
|
|
—
|
|
|
—
|
|
|
8,928
|
|
|
34,375
|
|
|
—
|
|
|
—
|
|
|
34,375
|
|
||||||||||||
Less: Revolving credit agreement borrowings
|
155,537
|
|
|
—
|
|
|
328,750
|
|
|
484,287
|
|
|
386,430
|
|
|
—
|
|
|
307,487
|
|
|
693,917
|
|
|
295,749
|
|
|
—
|
|
|
253,416
|
|
|
549,165
|
|
||||||||||||
Net assets
|
$
|
1,648,233
|
|
|
$
|
851,243
|
|
|
$
|
(328,750
|
)
|
|
$
|
2,170,726
|
|
|
$
|
1,465,911
|
|
|
$
|
860,924
|
|
|
$
|
(307,487
|
)
|
|
$
|
2,019,348
|
|
|
$
|
1,430,820
|
|
|
$
|
747,405
|
|
|
$
|
(253,416
|
)
|
|
$
|
1,924,809
|
|
Non-investment grade borrowing ratio (1)
|
9.4
|
%
|
|
|
|
|
|
|
|
26.4
|
%
|
|
|
|
|
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unrealized gains on investments
|
$
|
38,057
|
|
|
$
|
9,146
|
|
|
$
|
—
|
|
|
$
|
47,203
|
|
|
$
|
15,635
|
|
|
$
|
1,474
|
|
|
$
|
—
|
|
|
$
|
17,109
|
|
|
$
|
45,430
|
|
|
$
|
1,730
|
|
|
$
|
—
|
|
|
$
|
47,160
|
|
Unrealized losses on investments
|
(108,444
|
)
|
|
(2,004
|
)
|
|
—
|
|
|
(110,448
|
)
|
|
(119,633
|
)
|
|
(14,861
|
)
|
|
—
|
|
|
(134,494
|
)
|
|
(39,549
|
)
|
|
(4,512
|
)
|
|
—
|
|
|
(44,061
|
)
|
||||||||||||
Net unrealized gains (losses) on investments
|
$
|
(70,387
|
)
|
|
$
|
7,142
|
|
|
$
|
—
|
|
|
$
|
(63,245
|
)
|
|
$
|
(103,998
|
)
|
|
$
|
(13,387
|
)
|
|
$
|
—
|
|
|
$
|
(117,385
|
)
|
|
$
|
5,881
|
|
|
$
|
(2,782
|
)
|
|
$
|
—
|
|
|
$
|
3,099
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Case Reserves
|
$
|
501,071
|
|
|
$
|
401,049
|
|
IBNR Reserves
|
597,008
|
|
|
550,444
|
|
||
Total net reserves
|
$
|
1,098,079
|
|
|
$
|
951,493
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Casualty reinsurance
|
$
|
758,737
|
|
|
$
|
700,630
|
|
Other specialty reinsurance
|
165,683
|
|
|
134,203
|
|
||
Property catastrophe reinsurance
|
22,129
|
|
|
21,826
|
|
||
Insurance programs and coinsurance
|
151,530
|
|
|
94,834
|
|
||
Total net reserves
|
$
|
1,098,079
|
|
|
$
|
951,493
|
|
Development Pattern
|
Expected Loss Ratio
|
||||||||||
Increase (decrease) in loss reserves, net:
|
($ in thousands)
|
||||||||||
Casualty Reinsurance
|
10% Lower
|
|
Unchanged
|
|
10% Higher
|
||||||
|
|
|
|
|
|
||||||
6 Months Shorter
|
$
|
(81,533
|
)
|
|
$
|
(31,788
|
)
|
|
$
|
10,104
|
|
Unchanged
|
(51,207
|
)
|
|
—
|
|
|
48,498
|
|
|||
6 Months Longer
|
3,337
|
|
|
55,432
|
|
|
114,530
|
|
|||
|
|
|
|
|
|
||||||
Other Specialty Reinsurance
|
5% Lower
|
|
Unchanged
|
|
5% Higher
|
||||||
|
|
|
|
|
|
||||||
6 Months Shorter
|
$
|
(12,158
|
)
|
|
$
|
(590
|
)
|
|
$
|
4,917
|
|
Unchanged
|
(4,069
|
)
|
|
—
|
|
|
6,541
|
|
|||
6 Months Longer
|
(1,647
|
)
|
|
4,302
|
|
|
13,926
|
|
|||
|
|
|
|
|
|
||||||
Property Catastrophe Reinsurance
|
5% Lower
|
|
Unchanged
|
|
5% Higher
|
||||||
|
|
|
|
|
|
||||||
6 Months Shorter
|
$
|
(1,275
|
)
|
|
$
|
(690
|
)
|
|
$
|
(104
|
)
|
Unchanged
|
(603
|
)
|
|
—
|
|
|
603
|
|
|||
6 Months Longer
|
595
|
|
|
1,226
|
|
|
1,856
|
|
|||
|
|
|
|
|
|
||||||
Insurance and Coinsurance
|
5% Lower
|
|
Unchanged
|
|
5% Higher
|
||||||
|
|
|
|
|
|
||||||
6 Months Shorter
|
$
|
(19,188
|
)
|
|
$
|
(387
|
)
|
|
$
|
9,008
|
|
Unchanged
|
(11,173
|
)
|
|
—
|
|
|
10,747
|
|
|||
6 Months Longer
|
(9,031
|
)
|
|
2,138
|
|
|
16,594
|
|
|
December 31, 2019
|
||||||||||
|
Gross Amount
|
|
Acquisition Expenses
|
|
Net Amount
|
||||||
|
($ in thousands)
|
||||||||||
Casualty reinsurance
|
$
|
38,221
|
|
|
$
|
(14,369
|
)
|
|
$
|
23,852
|
|
Other specialty reinsurance
|
33,505
|
|
|
(7,842
|
)
|
|
25,663
|
|
|||
Property catastrophe reinsurance
|
25
|
|
|
(4
|
)
|
|
21
|
|
|||
Insurance programs and coinsurance
|
25,433
|
|
|
(5,109
|
)
|
|
20,324
|
|
|||
Total
|
$
|
97,184
|
|
|
$
|
(27,324
|
)
|
|
$
|
69,860
|
|
|
Credit Rating (1)
|
||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019
|
Fair Value
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB
|
|
B
|
|
CCC
|
|
CC
|
|
C
|
|
D
|
|
Not Rated
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Term loan investments
|
$
|
1,061,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,617
|
|
|
$
|
761,168
|
|
|
$
|
215,909
|
|
|
$
|
6,823
|
|
|
$
|
2,119
|
|
|
$
|
—
|
|
|
$
|
66,298
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Corporate bonds
|
372,473
|
|
|
—
|
|
|
36,128
|
|
|
81,401
|
|
|
41,103
|
|
|
9,003
|
|
|
58,345
|
|
|
135,613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,880
|
|
||||||||||||
U.S. government and government agency bonds
|
285,609
|
|
|
—
|
|
|
285,609
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Asset-backed securities
|
336,171
|
|
|
2,006
|
|
|
—
|
|
|
29,179
|
|
|
223,956
|
|
|
29,695
|
|
|
18,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,954
|
|
||||||||||||
Mortgage-backed securities
|
32,456
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|
23,650
|
|
|
976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,497
|
|
|
4,233
|
|
||||||||||||
Non-U.S. government and government agency bonds
|
133,409
|
|
|
—
|
|
|
132,460
|
|
|
—
|
|
|
949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Municipal government and government agency bonds
|
2,184
|
|
|
1,135
|
|
|
573
|
|
|
476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments
|
2,224,236
|
|
|
3,141
|
|
|
454,770
|
|
|
112,156
|
|
|
289,658
|
|
|
49,291
|
|
|
837,894
|
|
|
351,522
|
|
|
6,823
|
|
|
2,119
|
|
|
2,497
|
|
|
114,365
|
|
||||||||||||
Short-term investments
|
329,303
|
|
|
25,783
|
|
|
136,842
|
|
|
34,903
|
|
|
115,155
|
|
|
—
|
|
|
—
|
|
|
8,359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,261
|
|
||||||||||||
Total fixed income instruments and short-term investments
|
2,553,539
|
|
|
28,924
|
|
|
591,612
|
|
|
147,059
|
|
|
404,813
|
|
|
49,291
|
|
|
837,894
|
|
|
359,881
|
|
|
6,823
|
|
|
2,119
|
|
|
2,497
|
|
|
122,626
|
|
||||||||||||
Other Investments
|
30,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Equities
|
125,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total
|
$
|
2,709,137
|
|
|
$
|
28,924
|
|
|
$
|
591,612
|
|
|
$
|
147,059
|
|
|
$
|
404,813
|
|
|
$
|
49,291
|
|
|
$
|
837,894
|
|
|
$
|
359,881
|
|
|
$
|
6,823
|
|
|
$
|
2,119
|
|
|
$
|
2,497
|
|
|
$
|
122,626
|
|
|
Credit Rating (1)
|
||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2018
|
Fair Value
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB
|
|
B
|
|
CCC
|
|
CC
|
|
C
|
|
D
|
|
Not Rated
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Term loan investments
|
$
|
1,000,652
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,844
|
|
|
$
|
677,211
|
|
|
$
|
201,116
|
|
|
$
|
2,438
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,043
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Corporate bonds
|
654,607
|
|
|
3,961
|
|
|
58,185
|
|
|
100,590
|
|
|
63,791
|
|
|
15,246
|
|
|
174,867
|
|
|
203,505
|
|
|
—
|
|
|
2,200
|
|
|
—
|
|
|
32,262
|
|
||||||||||||
U.S. government and government agency bonds
|
268,675
|
|
|
—
|
|
|
268,675
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Asset-backed securities
|
225,983
|
|
|
4,532
|
|
|
4,973
|
|
|
10,278
|
|
|
113,075
|
|
|
36,643
|
|
|
20,818
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,664
|
|
||||||||||||
Mortgage-backed securities
|
22,161
|
|
|
—
|
|
|
—
|
|
|
944
|
|
|
13,336
|
|
|
742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,962
|
|
|
4,177
|
|
||||||||||||
Non-U.S. government and government agency bonds
|
136,513
|
|
|
5,173
|
|
|
122,715
|
|
|
8,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Municipal government and government agency bonds
|
8,231
|
|
|
6,490
|
|
|
715
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments
|
2,316,822
|
|
|
20,156
|
|
|
455,263
|
|
|
121,463
|
|
|
190,202
|
|
|
110,475
|
|
|
872,896
|
|
|
404,621
|
|
|
2,438
|
|
|
2,200
|
|
|
2,962
|
|
|
134,146
|
|
||||||||||||
Short-term investments
|
282,132
|
|
|
4,450
|
|
|
128,015
|
|
|
54,970
|
|
|
68,853
|
|
|
—
|
|
|
25,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments and short-term investments
|
2,598,954
|
|
|
24,606
|
|
|
583,278
|
|
|
176,433
|
|
|
259,055
|
|
|
110,475
|
|
|
898,740
|
|
|
404,621
|
|
|
2,438
|
|
|
2,200
|
|
|
2,962
|
|
|
134,146
|
|
||||||||||||
Other Investments
|
49,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Equities
|
89,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total
|
$
|
2,738,367
|
|
|
$
|
24,606
|
|
|
$
|
583,278
|
|
|
$
|
176,433
|
|
|
$
|
259,055
|
|
|
$
|
110,475
|
|
|
$
|
898,740
|
|
|
$
|
404,621
|
|
|
$
|
2,438
|
|
|
$
|
2,200
|
|
|
$
|
2,962
|
|
|
$
|
134,146
|
|
|
Amortized Cost
|
|
Fair Value
|
|
% of Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
December 31, 2019
|
|
|
|
|
|
|||||
Due in one year or less
|
$
|
316,276
|
|
|
$
|
315,620
|
|
|
12.4
|
%
|
Due after one year through five years
|
1,193,878
|
|
|
1,160,881
|
|
|
45.5
|
%
|
||
Due after five years through ten years
|
648,783
|
|
|
631,745
|
|
|
24.7
|
%
|
||
Due after ten years
|
73,758
|
|
|
76,666
|
|
|
3.0
|
%
|
||
Asset-backed securities
|
345,916
|
|
|
336,171
|
|
|
13.2
|
%
|
||
Mortgage-backed securities
|
32,175
|
|
|
32,456
|
|
|
1.3
|
%
|
||
Total
|
$
|
2,610,786
|
|
|
$
|
2,553,539
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|||||
December 31, 2018
|
|
|
|
|
|
|||||
Due in one year or less
|
$
|
300,554
|
|
|
$
|
300,519
|
|
|
11.6
|
%
|
Due after one year through five years
|
1,322,982
|
|
|
1,269,540
|
|
|
48.8
|
%
|
||
Due after five years through ten years
|
823,643
|
|
|
776,937
|
|
|
29.9
|
%
|
||
Due after ten years
|
3,925
|
|
|
3,814
|
|
|
0.1
|
%
|
||
Asset-backed securities
|
233,215
|
|
|
225,983
|
|
|
8.7
|
%
|
||
Mortgage-backed securities
|
23,466
|
|
|
22,161
|
|
|
0.9
|
%
|
||
Total
|
$
|
2,707,785
|
|
|
$
|
2,598,954
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Cash and cash equivalents provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
239,284
|
|
|
$
|
229,314
|
|
|
$
|
292,225
|
|
Investing activities
|
97,559
|
|
|
(345,307
|
)
|
|
(577,461
|
)
|
|||
Financing activities
|
(299,611
|
)
|
|
127,768
|
|
|
262,307
|
|
|||
Effects of exchange rate changes on foreign currency
|
1,676
|
|
|
(2,749
|
)
|
|
2,539
|
|
|||
Change in cash and cash equivalents
|
$
|
38,908
|
|
|
$
|
9,026
|
|
|
$
|
(20,390
|
)
|
•
|
Cash provided by operating activities for the year ended December 31, 2019 increased from 2018. We continued to generate significant operating cash inflows, primarily driven by our premium receipts exceeding the level of our paid claims, and interest income received.
|
•
|
Cash provided by investing activities for the year ended December 31, 2019 was higher than in 2018 when cash was used for investing activities, due to an increase in sales, redemptions and maturities of investments in 2019, rather than higher net purchases in 2018.
|
•
|
Cash was used for financing activities for the year ended December 31, 2019, rather than being provided by in 2018. During 2019, we used cash sourced from operating and investing activities to repay part of our secured credit facility indebtedness and to fully repay our custodian bank facility balance. These payments were driven by our investment strategy related to the timing and use of leverage in managing our non-investment grade portfolio. In addition, during the fourth quarter of 2019, we used cash from operating activities to purchase our own common shares under our $75 million share repurchase program. Further, in July 2019, the cash proceeds from the issuance of our senior notes were used to repurchase a significant portion of our outstanding preference shares, the impact of which was to reduce our cost of capital by virtue of the interest rate on the senior notes being lower than the dividend rate on the preference shares, and thereby reduce the related cash outflow each quarter.
|
•
|
Cash provided by operating activities for the year ended December 31, 2018 decreased from 2017. We continued to generate significant operating cash inflows in both 2018 and 2017, primarily driven by our premium receipts exceeding the level of our paid claims, although to a lesser extent in 2018 than in 2017.
|
•
|
Cash used for investing activities for the year ended December 31, 2018 was lower than in 2017, as there was less cash provided by operating activities and financing activities to fund a net increase in our investment portfolios.
|
•
|
Cash provided by financing activities for the year ended December 31, 2018 was lower than 2017, which was primarily driven by a reduction in incremental borrowings used to purchase investments.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Amount
|
|
% of Total Capital
|
|
Amount
|
|
% of Total Capital
|
||||||
|
($ in thousands)
|
||||||||||||
Debt:
|
|
|
|
|
|
|
|
||||||
Senior notes
|
$
|
172,418
|
|
|
15.7
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
||||||
Preference shares
|
52,305
|
|
|
4.8
|
%
|
|
220,992
|
|
|
19.9
|
%
|
||
Shareholders’ equity
|
872,353
|
|
|
79.5
|
%
|
|
889,608
|
|
|
80.1
|
%
|
||
Total
|
924,658
|
|
|
84.3
|
%
|
|
1,110,600
|
|
|
100.0
|
%
|
||
Total capital available to Watford
|
$
|
1,097,076
|
|
|
100.0
|
%
|
|
$
|
1,110,600
|
|
|
100.0
|
%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Borrowings to purchase investments
|
$
|
155,537
|
|
|
$
|
148,194
|
|
Borrowings to purchase collateral
|
328,750
|
|
|
307,487
|
|
||
Total secured credit facility borrowings
|
484,287
|
|
|
455,681
|
|
||
Outstanding letters of credit
|
52,533
|
|
|
52,533
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Total investments held in trust as collateral for underwriting transactions and regulatory deposits
|
$
|
1,087,707
|
|
|
$
|
988,872
|
|
Total investments pledged for Secured Facility
|
935,132
|
|
|
917,837
|
|
||
Total investments pledged for custodian bank
|
—
|
|
|
339,139
|
|
||
Total investments pledged for Lloyds Facility
|
51,047
|
|
|
68,853
|
|
||
Total investments pledged for Master TRS
|
64,107
|
|
|
36,336
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than One Year
|
|
One Year to Less Than Three Years
|
|
Three Years to Less Than Five Years
|
|
More Than Five Years
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
December 31, 2019
|
|
||||||||||||||||||
Estimated gross payments for losses and loss adjustment expenses (1)
|
$
|
1,263,628
|
|
|
$
|
319,685
|
|
|
$
|
415,163
|
|
|
$
|
223,406
|
|
|
$
|
305,374
|
|
Interest payments on senior notes (2)
|
108,094
|
|
|
11,375
|
|
|
22,750
|
|
|
22,750
|
|
|
51,219
|
|
|||||
Senior notes (2)
|
175,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
|||||
Revolving credit agreement borrowings (3)
|
484,287
|
|
|
484,287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
1,038
|
|
|
283
|
|
|
566
|
|
|
189
|
|
|
—
|
|
|||||
Total
|
$
|
2,032,047
|
|
|
$
|
815,630
|
|
|
$
|
438,479
|
|
|
$
|
246,345
|
|
|
$
|
531,593
|
|
•
|
foreign currency risk;
|
•
|
interest rate risk;
|
•
|
credit spread risk;
|
•
|
credit risk;
|
•
|
liquidity risk; and
|
•
|
political risk.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
(U.S. dollars in thousands, except per share data)
|
|
|
|
||||
Assets, net of insurance liabilities, denominated in foreign currencies, excluding shareholders’ equity and derivatives
|
$
|
56,382
|
|
|
$
|
65,674
|
|
Shareholders’ equity denominated in foreign currencies (1)
|
(26,529
|
)
|
|
(23,501
|
)
|
||
Net assets denominated in foreign currencies
|
$
|
29,853
|
|
|
$
|
42,173
|
|
Pre-tax impact of a hypothetical 10% appreciation of the U.S. dollar against foreign currencies:
|
|
|
|
||||
Shareholders’ equity
|
$
|
(2,985
|
)
|
|
$
|
(4,217
|
)
|
Book value per diluted common share
|
$
|
(0.15
|
)
|
|
$
|
(0.19
|
)
|
Pre-tax impact of a hypothetical 10% decline of the U.S. dollar against foreign currencies:
|
|
|
|
||||
Shareholders’ equity
|
$
|
2,985
|
|
|
$
|
4,217
|
|
Book value per diluted common share
|
$
|
0.15
|
|
|
$
|
0.19
|
|
|
Interest Rate Shift in Basis Points
|
||||||||||||||||||
(U.S. dollars in millions)
|
-100
|
|
-50
|
|
0
|
|
+50
|
|
+100
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fair value
|
$
|
2,739
|
|
|
$
|
2,724
|
|
|
$
|
2,709
|
|
|
$
|
2,693
|
|
|
$
|
2,679
|
|
Change from base
|
1.1
|
%
|
|
0.6
|
%
|
|
—
|
%
|
|
(0.6
|
)%
|
|
(1.1
|
)%
|
|||||
Change in unrealized value
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fair value
|
$
|
2,778
|
|
|
$
|
2,758
|
|
|
$
|
2,738
|
|
|
$
|
2,719
|
|
|
$
|
2,700
|
|
Change from base
|
1.5
|
%
|
|
0.7
|
%
|
|
—
|
%
|
|
(0.7
|
)%
|
|
(1.4
|
)%
|
|||||
Change in unrealized value
|
$
|
40
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
(38
|
)
|
|
Percentage Shift in Credit Spreads
|
||||||||||||||||||
(U.S. dollars in millions)
|
-50%
|
|
-10%
|
|
0
|
|
+10%
|
|
+50%
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fair value
|
$
|
2,836
|
|
|
$
|
2,735
|
|
|
$
|
2,709
|
|
|
$
|
2,681
|
|
|
$
|
2,569
|
|
Change from base
|
4.7
|
%
|
|
1.0
|
%
|
|
—
|
%
|
|
(1.0
|
)%
|
|
(5.2
|
)%
|
|||||
Change in unrealized value
|
$
|
127
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fair value
|
$
|
2,930
|
|
|
$
|
2,778
|
|
|
$
|
2,738
|
|
|
$
|
2,698
|
|
|
$
|
2,539
|
|
Change from base
|
6.6
|
%
|
|
1.4
|
%
|
|
—
|
%
|
|
(1.5
|
)%
|
|
(7.8
|
)%
|
|||||
Change in unrealized value
|
$
|
192
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
$
|
(199
|
)
|
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Term loans, fair value option (Amortized cost: $1,113,212 and $1,055,664)
|
$
|
1,061,934
|
|
|
$
|
1,000,652
|
|
Fixed maturities, fair value option (Amortized cost: $432,576 and $972,653)
|
416,594
|
|
|
922,819
|
|
||
Short-term investments, fair value option (Cost: $325,542 and $281,959)
|
329,303
|
|
|
282,132
|
|
||
Equity securities, fair value option
|
59,799
|
|
|
56,638
|
|
||
Other investments, fair value option (1)
|
30,461
|
|
|
49,762
|
|
||
Investments, fair value option
|
1,898,091
|
|
|
2,312,003
|
|
||
Fixed maturities, available for sale (Amortized cost: $739,456 and $397,509)
|
745,708
|
|
|
393,351
|
|
||
Equity securities, fair value through net income
|
65,338
|
|
|
33,013
|
|
||
Total investments (1)
|
2,709,137
|
|
|
2,738,367
|
|
||
Cash and cash equivalents
|
102,437
|
|
|
63,529
|
|
||
Accrued investment income
|
14,025
|
|
|
19,461
|
|
||
Premiums receivable (1)
|
273,657
|
|
|
227,301
|
|
||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses (1)
|
170,974
|
|
|
86,445
|
|
||
Prepaid reinsurance premiums (1)
|
132,577
|
|
|
61,587
|
|
||
Deferred acquisition costs, net (1)
|
64,044
|
|
|
80,858
|
|
||
Receivable for securities sold
|
16,288
|
|
|
24,507
|
|
||
Intangible assets
|
7,650
|
|
|
7,650
|
|
||
Funds held by reinsurers (1)
|
42,505
|
|
|
44,830
|
|
||
Other assets (1)
|
17,562
|
|
|
18,321
|
|
||
Total assets
|
$
|
3,550,856
|
|
|
$
|
3,372,856
|
|
Liabilities
|
|
|
|
||||
Reserve for losses and loss adjustment expenses (1)
|
$
|
1,263,628
|
|
|
$
|
1,032,760
|
|
Unearned premiums (1)
|
438,907
|
|
|
390,114
|
|
||
Losses payable (1)
|
61,314
|
|
|
24,750
|
|
||
Reinsurance balances payable (1)
|
77,066
|
|
|
21,034
|
|
||
Payable for securities purchased
|
18,180
|
|
|
60,142
|
|
||
Payable for securities sold short
|
66,257
|
|
|
8,928
|
|
||
Revolving credit agreement borrowings
|
484,287
|
|
|
693,917
|
|
||
Senior notes (1)
|
172,418
|
|
|
—
|
|
||
Amounts due to affiliates (1)
|
4,467
|
|
|
5,888
|
|
||
Investment management and performance fees payable (1)
|
17,762
|
|
|
3,807
|
|
||
Other liabilities
|
21,912
|
|
|
20,916
|
|
||
Total liabilities
|
$
|
2,626,198
|
|
|
$
|
2,262,256
|
|
Commitments and contingencies
|
|
|
|
|
|
||
Contingently redeemable preference shares (1)
|
52,305
|
|
|
220,992
|
|
||
Shareholders’ equity
|
|
|
|
||||
Common shares ($0.01 par; shares authorized: 120 million; shares issued: 22,692,300 and 22,682,875)
|
227
|
|
|
227
|
|
||
Additional paid-in capital
|
898,083
|
|
|
895,386
|
|
||
Retained earnings (deficit)
|
43,470
|
|
|
(1,275
|
)
|
||
Accumulated other comprehensive income (loss)
|
5,629
|
|
|
(4,730
|
)
|
||
Common shares held in treasury, at cost (shares: 2,789,405 and Nil)
|
(75,056
|
)
|
|
—
|
|
||
Total shareholders’ equity
|
872,353
|
|
|
889,608
|
|
||
Total liabilities, contingently redeemable preference shares and shareholders’ equity
|
$
|
3,550,856
|
|
|
$
|
3,372,856
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gross premiums written (1)
|
$
|
754,881
|
|
|
$
|
735,015
|
|
|
$
|
600,304
|
|
Gross premiums ceded (1)
|
(222,019
|
)
|
|
(130,840
|
)
|
|
(47,187
|
)
|
|||
Net premiums written (1)
|
532,862
|
|
|
604,175
|
|
|
553,117
|
|
|||
Change in unearned premiums (1)
|
23,828
|
|
|
(25,313
|
)
|
|
(21,391
|
)
|
|||
Net premiums earned (1)
|
556,690
|
|
|
578,862
|
|
|
531,726
|
|
|||
Other underwriting income (loss)
|
2,412
|
|
|
2,722
|
|
|
3,180
|
|
|||
Interest income
|
163,888
|
|
|
152,916
|
|
|
125,463
|
|
|||
Investment management fees - related parties (1)
|
(18,392
|
)
|
|
(17,006
|
)
|
|
(21,451
|
)
|
|||
Borrowing and miscellaneous other investment expenses
|
(29,285
|
)
|
|
(28,377
|
)
|
|
(17,489
|
)
|
|||
Net interest income
|
116,211
|
|
|
107,533
|
|
|
86,523
|
|
|||
Realized and unrealized gains (losses) on investments
|
24,243
|
|
|
(113,834
|
)
|
|
1,120
|
|
|||
Investment performance fees - related parties (1)
|
(12,191
|
)
|
|
(48
|
)
|
|
(14,905
|
)
|
|||
Net investment income (loss)
|
128,263
|
|
|
(6,349
|
)
|
|
72,738
|
|
|||
Total revenues
|
687,365
|
|
|
575,235
|
|
|
607,644
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses (1)
|
(453,135
|
)
|
|
(441,255
|
)
|
|
(436,402
|
)
|
|||
Acquisition expenses (1)
|
(126,788
|
)
|
|
(141,136
|
)
|
|
(140,726
|
)
|
|||
General and administrative expenses (1)
|
(30,843
|
)
|
|
(22,311
|
)
|
|
(21,174
|
)
|
|||
Interest expense (1)
|
(5,791
|
)
|
|
—
|
|
|
—
|
|
|||
Net foreign exchange gains (losses)
|
(8,247
|
)
|
|
3,611
|
|
|
1,420
|
|
|||
Non-recurring direct listing expenses
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||
Total expenses
|
(624,804
|
)
|
|
(610,091
|
)
|
|
(596,882
|
)
|
|||
Income (loss) before income taxes
|
62,561
|
|
|
(34,856
|
)
|
|
10,762
|
|
|||
Income tax expense
|
(20
|
)
|
|
(27
|
)
|
|
(21
|
)
|
|||
Net income (loss) before preference dividends and redemption costs
|
62,541
|
|
|
(34,883
|
)
|
|
10,741
|
|
|||
Preference dividends (1)
|
(13,632
|
)
|
|
(19,633
|
)
|
|
(19,633
|
)
|
|||
Accelerated amortization of costs related to the redemption of preference shares (1)
|
(4,164
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) available to common shareholders
|
$
|
44,745
|
|
|
$
|
(54,516
|
)
|
|
$
|
(8,892
|
)
|
|
|
|
|
|
|
||||||
Earnings (loss) per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.00
|
|
|
$
|
(2.40
|
)
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
2.00
|
|
|
$
|
(2.40
|
)
|
|
$
|
(0.39
|
)
|
Weighted average number of common shares used in the determination of earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
22,366,682
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|||
Diluted
|
22,373,968
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Comprehensive income (loss)
|
|
|
|
|
|
||||||
Net income (loss) available to common shareholders
|
$
|
44,745
|
|
|
$
|
(54,516
|
)
|
|
$
|
(8,892
|
)
|
Other comprehensive income (loss) net of income tax:
|
|
|
|
|
|
||||||
Available for sale investments:
|
|
|
|
|
|
||||||
Unrealized holding gains (losses) arising during the year (1)
|
16,021
|
|
|
(5,204
|
)
|
|
—
|
|
|||
Reclassification of net realized (gains) losses, net of income taxes, included in net income
|
(5,611
|
)
|
|
1,046
|
|
|
—
|
|
|||
Foreign currency translation adjustments
|
(51
|
)
|
|
400
|
|
|
(597
|
)
|
|||
Other comprehensive income (loss) net of income tax
|
10,359
|
|
|
(3,758
|
)
|
|
(597
|
)
|
|||
Comprehensive income (loss)
|
$
|
55,104
|
|
|
$
|
(58,274
|
)
|
|
$
|
(9,489
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Common shares
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
227
|
|
|
$
|
227
|
|
|
$
|
227
|
|
Common shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
227
|
|
|
227
|
|
|
227
|
|
|||
|
|
|
|
|
|
||||||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
895,386
|
|
|
895,386
|
|
|
895,386
|
|
|||
Common shares issued under share plans
|
250
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation
|
2,447
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
898,083
|
|
|
895,386
|
|
|
895,386
|
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(4,730
|
)
|
|
(972
|
)
|
|
(375
|
)
|
|||
Unrealized holding gains (losses) of available for sale investments:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(4,158
|
)
|
|
—
|
|
|
—
|
|
|||
Unrealized holding gains (losses) of available for sale investments, net of reclassification adjustment
|
10,410
|
|
|
(4,158
|
)
|
|
—
|
|
|||
Balance at end of year
|
6,252
|
|
|
(4,158
|
)
|
|
—
|
|
|||
Currency translation adjustment:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(572
|
)
|
|
(972
|
)
|
|
(375
|
)
|
|||
Currency translation adjustment
|
(51
|
)
|
|
400
|
|
|
(597
|
)
|
|||
Balance at end of year
|
(623
|
)
|
|
(572
|
)
|
|
(972
|
)
|
|||
Balance at end of year
|
5,629
|
|
|
(4,730
|
)
|
|
(972
|
)
|
|||
|
|
|
|
|
|
||||||
Common shares held in treasury, at cost
|
|
|
|
|
|
||||||
Balance at beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Shares repurchased for treasury
|
(75,056
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
(75,056
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Retained earnings (deficit)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(1,275
|
)
|
|
53,241
|
|
|
62,133
|
|
|||
Net income (loss) before preference dividends
|
62,541
|
|
|
(34,883
|
)
|
|
10,741
|
|
|||
Preference share dividends paid and accrued
|
(13,632
|
)
|
|
(19,633
|
)
|
|
(19,633
|
)
|
|||
Accelerated amortization of costs related to the redemption of preference shares
|
(4,164
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
43,470
|
|
|
(1,275
|
)
|
|
53,241
|
|
|||
Total shareholders’ equity
|
$
|
872,353
|
|
|
$
|
889,608
|
|
|
$
|
947,882
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income (loss) before preference dividends
|
$
|
62,541
|
|
|
$
|
(34,883
|
)
|
|
$
|
10,741
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net realized and unrealized (gains) losses on investments
|
(24,243
|
)
|
|
113,834
|
|
|
(1,120
|
)
|
|||
Amortization of fixed assets
|
86
|
|
|
157
|
|
|
187
|
|
|||
Share-based compensation
|
2,697
|
|
|
—
|
|
|
—
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accrued investment income
|
5,441
|
|
|
(1,212
|
)
|
|
(1,237
|
)
|
|||
Premiums receivable
|
(39,849
|
)
|
|
(58,700
|
)
|
|
18,923
|
|
|||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses
|
(84,737
|
)
|
|
(42,822
|
)
|
|
(18,023
|
)
|
|||
Prepaid reinsurance premiums
|
(70,990
|
)
|
|
(36,825
|
)
|
|
(11,716
|
)
|
|||
Deferred acquisition costs, net
|
19,577
|
|
|
5,709
|
|
|
950
|
|
|||
Reserve for losses and loss adjustment expenses
|
216,596
|
|
|
257,479
|
|
|
272,295
|
|
|||
Unearned premiums
|
47,162
|
|
|
62,138
|
|
|
33,106
|
|
|||
Reinsurance balances payable
|
57,554
|
|
|
3,847
|
|
|
5,367
|
|
|||
Funds held with reinsurers
|
2,915
|
|
|
(5,219
|
)
|
|
(17,855
|
)
|
|||
Other liabilities
|
44,605
|
|
|
(24,021
|
)
|
|
18,051
|
|
|||
Other items
|
(71
|
)
|
|
(10,168
|
)
|
|
(17,444
|
)
|
|||
Net Cash Provided By Operating Activities
|
239,284
|
|
|
229,314
|
|
|
292,225
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Purchase of term loans
|
(443,550
|
)
|
|
(774,570
|
)
|
|
(827,757
|
)
|
|||
Purchase of fixed maturity investments
|
(1,247,573
|
)
|
|
(1,286,151
|
)
|
|
(1,579,591
|
)
|
|||
Purchase of other investments
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
|||
Purchase of short-term investments with maturities over three months
|
(45,106
|
)
|
|
(25,876
|
)
|
|
—
|
|
|||
Proceeds from sale, redemptions and maturity of term loans
|
324,142
|
|
|
633,923
|
|
|
731,679
|
|
|||
Proceeds from sales, redemptions and maturities of fixed maturity investments
|
1,508,008
|
|
|
1,062,966
|
|
|
1,162,210
|
|
|||
Proceeds from sales, redemptions and maturities of other investments
|
47,281
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales, redemptions and maturities of short-term investments with maturities over three months
|
6,953
|
|
|
—
|
|
|
—
|
|
|||
Net (purchases) sales of short-term investments with maturities less than three months
|
(6,015
|
)
|
|
70,165
|
|
|
50,829
|
|
|||
Purchases of equity securities
|
(75,164
|
)
|
|
(122,766
|
)
|
|
(71,562
|
)
|
|||
Proceeds from sales of equity securities
|
26,112
|
|
|
95,371
|
|
|
8,486
|
|
|||
Net settlements of derivative instruments
|
2,471
|
|
|
1,642
|
|
|
(1,734
|
)
|
|||
Purchases of furniture, equipment and other assets
|
—
|
|
|
(11
|
)
|
|
(21
|
)
|
|||
Net Cash Provided by (Used For) Investing Activities
|
97,559
|
|
|
(345,307
|
)
|
|
(577,461
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Dividends paid on redeemable preference shares
|
(13,402
|
)
|
|
(19,264
|
)
|
|
(19,264
|
)
|
|||
Repayments on borrowings
|
(273,155
|
)
|
|
(201,401
|
)
|
|
(72,000
|
)
|
|||
Proceeds from borrowings
|
62,800
|
|
|
348,433
|
|
|
359,238
|
|
|||
Repurchase of preference shares
|
(173,081
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of senior notes
|
172,283
|
|
|
—
|
|
|
—
|
|
|||
Purchases of common shares under share repurchase program
|
(75,056
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings issuance costs
|
—
|
|
|
—
|
|
|
(5,667
|
)
|
|||
Net Cash Provided By (Used For) Financing Activities
|
(299,611
|
)
|
|
127,768
|
|
|
262,307
|
|
|||
Effects of exchange rate changes on foreign currency cash
|
1,676
|
|
|
(2,749
|
)
|
|
2,539
|
|
|||
Increase (decrease) in cash
|
38,908
|
|
|
9,026
|
|
|
(20,390
|
)
|
|||
Cash and cash equivalents, beginning of year
|
63,529
|
|
|
54,503
|
|
|
74,893
|
|
|||
Cash and cash equivalents, end of year
|
$
|
102,437
|
|
|
$
|
63,529
|
|
|
$
|
54,503
|
|
Supplementary information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
21
|
|
Interest paid
|
$
|
33,384
|
|
|
$
|
26,717
|
|
|
$
|
15,719
|
|
Non-cash exchange of investments
|
$
|
45,541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
For amendments related to ASU 2016-01 and ASU 2016-13, the effective date is for fiscal years and interim periods beginning after December 15, 2019; with early adoption in any interim period permitted for ASU 2016-01.
|
•
|
For amendments related to ASU 2017-12, the effective date is as of the beginning of the first annual reporting period beginning after April 25, 2019. As the Company has implemented ASU 2017-12, early adoption in any interim period is permitted.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Gross premiums written:
|
|
|
|
|
|
||||||
Casualty reinsurance
|
$
|
279,967
|
|
|
$
|
274,661
|
|
|
$
|
284,481
|
|
Other specialty reinsurance
|
119,518
|
|
|
196,170
|
|
|
169,100
|
|
|||
Property catastrophe reinsurance
|
16,226
|
|
|
10,424
|
|
|
12,740
|
|
|||
Insurance programs and coinsurance
|
339,170
|
|
|
253,760
|
|
|
133,983
|
|
|||
Total
|
$
|
754,881
|
|
|
$
|
735,015
|
|
|
$
|
600,304
|
|
|
|
|
|
|
|
||||||
Net premiums written:
|
|
|
|
|
|
||||||
Casualty reinsurance
|
$
|
225,758
|
|
|
$
|
273,048
|
|
|
$
|
281,783
|
|
Other specialty reinsurance
|
114,876
|
|
|
181,096
|
|
|
155,666
|
|
|||
Property catastrophe reinsurance
|
15,517
|
|
|
10,193
|
|
|
12,455
|
|
|||
Insurance programs and coinsurance
|
176,711
|
|
|
139,838
|
|
|
103,213
|
|
|||
Total
|
$
|
532,862
|
|
|
$
|
604,175
|
|
|
$
|
553,117
|
|
|
|
|
|
|
|
||||||
Net premiums earned:
|
|
|
|
|
|
||||||
Casualty reinsurance
|
$
|
238,437
|
|
|
$
|
278,656
|
|
|
$
|
308,526
|
|
Other specialty reinsurance
|
149,688
|
|
|
162,691
|
|
|
134,855
|
|
|||
Property catastrophe reinsurance
|
13,399
|
|
|
10,998
|
|
|
12,690
|
|
|||
Insurance programs and coinsurance
|
155,166
|
|
|
126,517
|
|
|
75,655
|
|
|||
Total
|
$
|
556,690
|
|
|
$
|
578,862
|
|
|
$
|
531,726
|
|
|
|
|
|
|
|
||||||
Net premiums written by underwriting location:
|
|
|
|
|
|
||||||
United States
|
$
|
127,176
|
|
|
$
|
49,800
|
|
|
$
|
11,750
|
|
Europe
|
52,065
|
|
|
91,635
|
|
|
91,463
|
|
|||
Bermuda
|
353,621
|
|
|
462,740
|
|
|
449,904
|
|
|||
Total
|
$
|
532,862
|
|
|
$
|
604,175
|
|
|
$
|
553,117
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Premiums written
|
|
|
|
|
|
||||||
Direct
|
$
|
339,170
|
|
|
$
|
253,760
|
|
|
$
|
133,983
|
|
Assumed
|
415,711
|
|
|
481,255
|
|
|
466,321
|
|
|||
Ceded
|
(222,019
|
)
|
|
(130,840
|
)
|
|
(47,187
|
)
|
|||
Net
|
$
|
532,862
|
|
|
$
|
604,175
|
|
|
$
|
553,117
|
|
Premiums earned
|
|
|
|
|
|
||||||
Direct
|
$
|
290,328
|
|
|
$
|
201,868
|
|
|
$
|
96,125
|
|
Assumed
|
419,778
|
|
|
468,156
|
|
|
471,073
|
|
|||
Ceded
|
(153,416
|
)
|
|
(91,162
|
)
|
|
(35,472
|
)
|
|||
Net
|
$
|
556,690
|
|
|
$
|
578,862
|
|
|
$
|
531,726
|
|
Losses and loss adjustment expenses
|
|
|
|
|
|
||||||
Direct
|
$
|
244,354
|
|
|
$
|
157,991
|
|
|
$
|
71,679
|
|
Assumed
|
347,378
|
|
|
348,332
|
|
|
393,565
|
|
|||
Ceded
|
(138,597
|
)
|
|
(65,068
|
)
|
|
(28,842
|
)
|
|||
Net
|
$
|
453,135
|
|
|
$
|
441,255
|
|
|
$
|
436,402
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Gross reserve for losses and loss adjustment expenses at beginning of year
|
$
|
1,032,760
|
|
|
$
|
798,262
|
|
|
$
|
510,809
|
|
Unpaid losses and loss adjustment expenses recoverable
|
81,267
|
|
|
39,856
|
|
|
21,518
|
|
|||
Net reserve for losses and loss adjustment expenses at beginning of year
|
951,493
|
|
|
758,406
|
|
|
489,291
|
|
|||
|
|
|
|
|
|
||||||
Net incurred losses and loss adjustment expenses relating to losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
429,322
|
|
|
443,482
|
|
|
399,530
|
|
|||
Prior years
|
23,813
|
|
|
(2,227
|
)
|
|
36,872
|
|
|||
Total net losses and loss adjustment expenses
|
453,135
|
|
|
441,255
|
|
|
436,402
|
|
|||
|
|
|
|
|
|
||||||
Foreign exchange gains (losses)
|
15,286
|
|
|
(23,962
|
)
|
|
14,832
|
|
|||
|
|
|
|
|
|
||||||
Net paid losses and loss adjustment expenses relating to losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
(73,723
|
)
|
|
(64,026
|
)
|
|
(70,423
|
)
|
|||
Prior years
|
(248,112
|
)
|
|
(160,180
|
)
|
|
(111,696
|
)
|
|||
Total paid losses and loss adjustment expenses
|
(321,835
|
)
|
|
(224,206
|
)
|
|
(182,119
|
)
|
|||
|
|
|
|
|
|
||||||
Net reserve for losses and loss adjustment expenses at end of year
|
1,098,079
|
|
|
951,493
|
|
|
758,406
|
|
|||
Unpaid losses and loss adjustment expenses recoverable
|
165,549
|
|
|
81,267
|
|
|
39,856
|
|
|||
Gross reserve for losses and loss adjustment expenses at end of year
|
$
|
1,263,628
|
|
|
$
|
1,032,760
|
|
|
$
|
798,262
|
|
•
|
Expected loss methods: these methods are based on the assumption that ultimate losses vary proportionately with premiums. Expected loss and loss adjustment expense ratios are typically developed based upon the information derived by underwriters and actuaries during the initial pricing of the business, supplemented by industry data available from organizations, such as statistical bureaus and consulting firms, where appropriate. These ratios consider, among other things, rate changes and changes in terms and conditions that have been observed in the market. Expected loss methods are useful for estimating ultimate losses and loss adjustment expenses in the early years of long-tailed lines of business, when little or no paid or incurred loss information is available, and is commonly applied when limited loss experience exists for a company.
|
•
|
Historical incurred loss development methods: these methods assume that the ratio of losses in one period to losses in an earlier period will remain constant in the future. These methods use incurred losses (i.e., the sum of cumulative historical loss payments plus outstanding case reserves) over discrete periods of time to estimate future losses. Historical incurred loss development methods may be preferable to historical paid loss development methods because they explicitly take into account open cases and the claims adjusters’ evaluations of the cost to settle all known claims. However, historical incurred loss development methods necessarily assume that case reserving practices are consistently applied over time. Therefore, when there have been significant changes in how case reserves are established, using incurred loss data to project ultimate losses may be less reliable than other methods.
|
•
|
Historical paid loss development methods: these methods, like historical incurred loss development methods, assume that the ratio of losses in one period to losses in an earlier period will remain constant. These methods use historical loss payments over discrete periods of time to estimate future losses and necessarily assume that factors that have affected paid losses in the past, such as inflation or the effects of litigation, will remain constant in the future. Because historical paid loss development methods do not use incurred losses to estimate ultimate losses, they may be more reliable than the other methods that use incurred losses in situations where there are significant changes in how incurred losses are established by a company’s claims adjusters. However, historical paid loss development methods are more leveraged (meaning that small changes in payments have a larger impact on estimates of ultimate losses) than actuarial methods that use incurred losses because cumulative loss payments take much longer to equal the expected ultimate losses than cumulative incurred amounts. In addition, and for similar reasons, historical paid loss development methods are often slow to react to situations when new or different factors arise than those that have affected paid losses in the past.
|
•
|
Adjusted historical paid and incurred loss development methods: these methods take traditional historical paid and incurred loss development methods and adjust them for the estimated impact of changes from the past in factors such as inflation, the speed of claim payments or the adequacy of case reserves. Adjusted historical paid and incurred loss development methods are often more reliable methods of predicting ultimate losses in periods of significant change, provided the actuaries can develop methods to reasonably quantify the impact of changes. As such, these methods utilize more judgment than historical paid and incurred loss development methods.
|
•
|
Bornhuetter-Ferguson, or B-F, paid and incurred loss methods: these methods utilize actual paid and incurred losses and expected patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of expected ultimate losses. The B-F paid and incurred loss methods are useful when there are few reported claims and a relatively less stable pattern of reported losses.
|
•
|
Additional analysis: other methodologies are often used in the reserving process for specific types of claims or events, such as catastrophic or other specific major events. These include vendor catastrophe models, which are typically used in the estimation of loss reserves at the early stage of
|
Level of disaggregation
|
|
Included product lines
|
Casualty reinsurance - pro rata
|
|
Executive assurance, medical malpractice liability, other professional liability, workers’ compensation, excess and umbrella liability and excess auto liability all written primarily on a treaty pro rata basis
|
Casualty reinsurance - excess of loss
|
|
Executive assurance, medical malpractice liability, other professional liability, workers’ compensation, excess and umbrella liability and excess auto liability all written primarily on a treaty excess of loss basis
|
Other specialty reinsurance
|
|
Personal and commercial auto (other than excess auto liability), surety, accident and health, and workers compensation catastrophe written primarily on a treaty basis
|
Property catastrophe reinsurance
|
|
Property catastrophe reinsurance
|
Insurance programs and coinsurance
|
|
Primary and excess general liability, umbrella liability, professional liability, workers’ compensation, personal and commercial automobile, inland marine and property business with minimal catastrophe exposure written on a direct basis
|
Casualty reinsurance - Excess of Loss ($000’s)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Incurred losses and allocated loss adjustment expenses, net of reinsurance
|
|
December 31, 2019
|
||||||||||||||||||||||||||
|
|
Year ended December 31,
|
|
Total of IBNR liabilities plus expected development on reported claims
|
||||||||||||||||||||||||
Accident year
|
|
2014
unaudited
|
|
2015
unaudited
|
|
2016
unaudited
|
|
2017 unaudited
|
|
2018 unaudited
|
|
2019
|
|
|||||||||||||||
2014
|
|
$
|
4,759
|
|
|
$
|
5,756
|
|
|
$
|
5,315
|
|
|
$
|
11,636
|
|
|
$
|
10,647
|
|
|
$
|
10,392
|
|
|
$
|
821
|
|
2015
|
|
|
|
27,910
|
|
|
29,008
|
|
|
36,466
|
|
|
38,030
|
|
|
38,343
|
|
|
2,247
|
|
||||||||
2016
|
|
|
|
|
|
38,321
|
|
|
42,553
|
|
|
49,517
|
|
|
50,252
|
|
|
7,956
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
45,349
|
|
|
36,170
|
|
|
39,442
|
|
|
12,043
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
70,079
|
|
|
67,550
|
|
|
27,263
|
|
|||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
79,050
|
|
|
53,402
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
285,029
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
|
|
|
||||||||||||||||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
72
|
|
|
$
|
671
|
|
|
$
|
1,348
|
|
|
$
|
3,369
|
|
|
|
||
2015
|
|
|
|
97
|
|
|
622
|
|
|
2,015
|
|
|
6,957
|
|
|
8,756
|
|
|
|
|||||||||
2016
|
|
|
|
|
|
218
|
|
|
797
|
|
|
2,617
|
|
|
5,554
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
107
|
|
|
970
|
|
|
2,476
|
|
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
155
|
|
|
2,455
|
|
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
301
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
22,911
|
|
|
|
||||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance
|
|
$
|
262,118
|
|
|
|
Other specialty reinsurance ($000’s)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Incurred losses and allocated loss adjustment expenses, net of reinsurance
|
|
December 31, 2019
|
||||||||||||||||||||||||||
|
|
Year ended December 31,
|
|
Total of IBNR liabilities plus expected development on reported claims
|
||||||||||||||||||||||||
Accident year
|
|
2014
unaudited
|
|
2015
unaudited
|
|
2016
unaudited
|
|
2017 unaudited
|
|
2018 unaudited
|
|
2019
|
|
|||||||||||||||
2014
|
|
$
|
16,868
|
|
|
$
|
17,247
|
|
|
$
|
17,134
|
|
|
$
|
17,605
|
|
|
$
|
18,032
|
|
|
$
|
18,031
|
|
|
$
|
732
|
|
2015
|
|
|
|
72,131
|
|
|
73,461
|
|
|
71,845
|
|
|
74,414
|
|
|
76,917
|
|
|
2,841
|
|
||||||||
2016
|
|
|
|
|
|
66,514
|
|
|
57,377
|
|
|
58,375
|
|
|
55,979
|
|
|
2,786
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
77,923
|
|
|
73,308
|
|
|
77,661
|
|
|
7,003
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
81,807
|
|
|
84,262
|
|
|
12,260
|
|
|||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
85,895
|
|
|
33,440
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
398,745
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
|
|
|
||||||||||||||||||||||||||
2014
|
|
$
|
4,835
|
|
|
$
|
12,471
|
|
|
$
|
14,329
|
|
|
$
|
15,460
|
|
|
$
|
16,892
|
|
|
$
|
17,182
|
|
|
|
||
2015
|
|
|
|
30,103
|
|
|
49,238
|
|
|
58,214
|
|
|
67,476
|
|
|
70,401
|
|
|
|
|||||||||
2016
|
|
|
|
|
|
25,293
|
|
|
38,342
|
|
|
45,545
|
|
|
49,885
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
29,764
|
|
|
55,164
|
|
|
61,226
|
|
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
18,376
|
|
|
52,457
|
|
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
20,982
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
272,133
|
|
|
|
||||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance
|
|
$
|
126,612
|
|
|
|
Property catastrophe reinsurance ($000’s)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Incurred losses and allocated loss adjustment expenses, net of reinsurance
|
|
December 31, 2019
|
||||||||||||||||||||||||||
|
|
Year ended December 31,
|
|
Total of IBNR liabilities plus expected development on reported claims
|
||||||||||||||||||||||||
Accident year
|
|
2014
unaudited
|
|
2015
unaudited
|
|
2016
unaudited
|
|
2017 unaudited
|
|
2018 unaudited
|
|
2019
|
|
|||||||||||||||
2014
|
|
$
|
1,516
|
|
|
$
|
1,127
|
|
|
$
|
815
|
|
|
$
|
783
|
|
|
$
|
659
|
|
|
$
|
613
|
|
|
$
|
25
|
|
2015
|
|
|
|
4,662
|
|
|
3,563
|
|
|
2,766
|
|
|
2,065
|
|
|
1,981
|
|
|
—
|
|
||||||||
2016
|
|
|
|
|
|
5,111
|
|
|
4,113
|
|
|
3,413
|
|
|
2,968
|
|
|
78
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
22,516
|
|
|
18,178
|
|
|
17,404
|
|
|
244
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
16,734
|
|
|
14,833
|
|
|
875
|
|
|||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
10,332
|
|
|
2,272
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
48,131
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
|
|
|
||||||||||||||||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
221
|
|
|
$
|
545
|
|
|
$
|
576
|
|
|
$
|
598
|
|
|
$
|
606
|
|
|
|
||
2015
|
|
|
|
377
|
|
|
804
|
|
|
1,374
|
|
|
1,456
|
|
|
1,494
|
|
|
|
|||||||||
2016
|
|
|
|
|
|
1,021
|
|
|
1,932
|
|
|
2,297
|
|
|
2,574
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
6,615
|
|
|
12,090
|
|
|
13,245
|
|
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
2,765
|
|
|
7,499
|
|
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
583
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
26,001
|
|
|
|
||||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance
|
|
$
|
22,130
|
|
|
|
Insurance programs and coinsurance ($000’s except claim amount)
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Incurred losses and allocated loss adjustment expenses, net of reinsurance
|
|
December 31, 2019
|
|||||||||||||||||||||||||||||
|
|
Year ended December 31,
|
|
Total of IBNR liabilities plus expected development on reported claims
|
|
Cumulative number of reported claims
|
|||||||||||||||||||||||||
Accident year
|
|
2014
unaudited
|
|
2015
unaudited
|
|
2016
unaudited
|
|
2017 unaudited
|
|
2018 unaudited
|
|
2019
|
|
|
|||||||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
2015
|
|
|
|
1,033
|
|
|
1,033
|
|
|
1,161
|
|
|
1,169
|
|
|
1,169
|
|
|
22
|
|
|
775
|
|
||||||||
2016
|
|
|
|
|
|
26,299
|
|
|
25,992
|
|
|
27,627
|
|
|
28,090
|
|
|
2,284
|
|
|
31546
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
59,717
|
|
|
58,665
|
|
|
62,289
|
|
|
8,530
|
|
|
55106
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
100,538
|
|
|
100,011
|
|
|
15,379
|
|
|
49283
|
|
|||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
127,368
|
|
|
51,992
|
|
|
58262
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
318,927
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
|
|
|
|
|
|||||||||||||||||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
2015
|
|
|
|
9
|
|
|
403
|
|
|
735
|
|
|
857
|
|
|
922
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
6,036
|
|
|
15,723
|
|
|
21,115
|
|
|
23,198
|
|
|
|
|
|
|||||||||||
2017
|
|
|
|
|
|
|
|
18,491
|
|
|
37,778
|
|
|
45,005
|
|
|
|
|
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
31,561
|
|
|
67,067
|
|
|
|
|
|
|||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
31,199
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
167,391
|
|
|
|
|
|
|||||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance
|
|
$
|
151,536
|
|
|
|
|
|
|
Average annual percentage payout of incurred losses and loss adjustment expenses by age, net of reinsurance
|
||||||||||
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|
Year 6
|
Casualty reinsurance - pro rata
|
7.4%
|
|
14.5%
|
|
16.3%
|
|
14.7%
|
|
12.3%
|
|
13.0%
|
Casualty reinsurance - excess of loss
|
0.3%
|
|
1.6%
|
|
2.9%
|
|
8.2%
|
|
5.6%
|
|
19.5%
|
Other specialty reinsurance
|
32.6%
|
|
32.7%
|
|
10.7%
|
|
8.7%
|
|
5.9%
|
|
1.6%
|
Property catastrophe reinsurance
|
19.3%
|
|
30.4%
|
|
25.1%
|
|
6.2%
|
|
2.8%
|
|
1.2%
|
Insurance programs and coinsurance
|
21.6%
|
|
33.7%
|
|
19.7%
|
|
8.9%
|
|
5.6%
|
|
N/A
|
|
December 31, 2019
|
||
|
($ in thousands)
|
||
Net outstanding liabilities:
|
|
||
Casualty reinsurance - pro rata
|
$
|
491,623
|
|
Casualty reinsurance - excess of loss
|
262,118
|
|
|
Insurance programs and coinsurance
|
151,536
|
|
|
Other specialty reinsurance
|
126,612
|
|
|
Property catastrophe reinsurance
|
22,130
|
|
|
Other short duration lines not included in disclosures (1)
|
39,055
|
|
|
Total for short duration lines
|
1,093,074
|
|
|
|
|
||
Unpaid losses and loss adjustment expenses recoverable:
|
|
||
Insurance programs and coinsurance
|
128,674
|
|
|
Other specialty reinsurance
|
19,700
|
|
|
Casualty reinsurance - excess of loss
|
9,949
|
|
|
Casualty reinsurance - pro rata
|
4,889
|
|
|
Property catastrophe reinsurance
|
3
|
|
|
Other short duration lines not included in disclosures (1)
|
2,334
|
|
|
Total for short duration lines
|
165,549
|
|
|
|
|
|
|
Unallocated claims adjustment expenses
|
5,005
|
|
|
Reserve for losses and loss adjustment expenses
|
$
|
1,263,628
|
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
|
($ in thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency bonds
|
$
|
282,076
|
|
|
$
|
1,708
|
|
|
$
|
(137
|
)
|
|
$
|
283,647
|
|
Corporate bonds
|
155,834
|
|
|
2,326
|
|
|
(41
|
)
|
|
158,119
|
|
||||
Asset-backed securities
|
145,555
|
|
|
614
|
|
|
(735
|
)
|
|
145,434
|
|
||||
Non-U.S. government and government agency bonds
|
129,456
|
|
|
3,530
|
|
|
(1,033
|
)
|
|
131,953
|
|
||||
Mortgage-backed securities
|
24,776
|
|
|
18
|
|
|
(44
|
)
|
|
24,750
|
|
||||
Municipal government and government agency bonds
|
1,759
|
|
|
46
|
|
|
—
|
|
|
1,805
|
|
||||
Total investments, available for sale
|
$
|
739,456
|
|
|
$
|
8,242
|
|
|
$
|
(1,990
|
)
|
|
$
|
745,708
|
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
|
($ in thousands)
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency bonds
|
$
|
156,884
|
|
|
$
|
672
|
|
|
$
|
(127
|
)
|
|
$
|
157,429
|
|
Non-U.S. government and government agency bonds
|
89,661
|
|
|
670
|
|
|
(2,859
|
)
|
|
87,472
|
|
||||
Corporate bonds
|
77,178
|
|
|
19
|
|
|
(1,204
|
)
|
|
75,993
|
|
||||
Asset-backed securities
|
58,369
|
|
|
72
|
|
|
(1,351
|
)
|
|
57,090
|
|
||||
Mortgage-backed securities
|
14,344
|
|
|
17
|
|
|
(81
|
)
|
|
14,280
|
|
||||
Municipal government and government agency bonds
|
1,073
|
|
|
14
|
|
|
—
|
|
|
1,087
|
|
||||
Total investments, available for sale
|
$
|
397,509
|
|
|
$
|
1,464
|
|
|
$
|
(5,622
|
)
|
|
$
|
393,351
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency bonds
|
$
|
36,540
|
|
|
$
|
(137
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,540
|
|
|
$
|
(137
|
)
|
Non-U.S. government and government agency bonds
|
51,779
|
|
|
(1,027
|
)
|
|
5,410
|
|
|
(6
|
)
|
|
57,189
|
|
|
(1,033
|
)
|
||||||
Corporate bonds
|
9,854
|
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
9,854
|
|
|
(41
|
)
|
||||||
Asset-backed securities
|
55,194
|
|
|
(504
|
)
|
|
19,430
|
|
|
(231
|
)
|
|
74,624
|
|
|
(735
|
)
|
||||||
Mortgage-backed securities
|
14,481
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
14,481
|
|
|
(44
|
)
|
||||||
Total
|
$
|
167,848
|
|
|
$
|
(1,753
|
)
|
|
$
|
24,840
|
|
|
$
|
(237
|
)
|
|
$
|
192,688
|
|
|
$
|
(1,990
|
)
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency bonds
|
$
|
66,422
|
|
|
$
|
(127
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
66,422
|
|
|
$
|
(127
|
)
|
Non-U.S. government and government agency bonds
|
78,084
|
|
|
(2,859
|
)
|
|
—
|
|
|
—
|
|
|
78,084
|
|
|
(2,859
|
)
|
||||||
Corporate bonds
|
70,443
|
|
|
(1,204
|
)
|
|
—
|
|
|
—
|
|
|
70,443
|
|
|
(1,204
|
)
|
||||||
Asset-backed securities
|
49,400
|
|
|
(1,351
|
)
|
|
—
|
|
|
—
|
|
|
49,400
|
|
|
(1,351
|
)
|
||||||
Mortgage-backed securities
|
8,478
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
8,478
|
|
|
(81
|
)
|
||||||
Total
|
$
|
272,827
|
|
|
$
|
(5,622
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
272,827
|
|
|
$
|
(5,622
|
)
|
|
December 31, 2019
|
|||||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
|
% of Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
Due in one year or less
|
$
|
9,235
|
|
|
$
|
9,248
|
|
|
1.3
|
%
|
Due after one year through five years
|
414,235
|
|
|
417,921
|
|
|
56.0
|
%
|
||
Due after five years through ten years
|
133,822
|
|
|
136,329
|
|
|
18.3
|
%
|
||
Due after ten years
|
11,833
|
|
|
12,026
|
|
|
1.6
|
%
|
||
Asset-backed securities
|
145,555
|
|
|
145,434
|
|
|
19.5
|
%
|
||
Mortgage-backed securities
|
24,776
|
|
|
24,750
|
|
|
3.3
|
%
|
||
Total investments, available for sale
|
$
|
739,456
|
|
|
$
|
745,708
|
|
|
100.0
|
%
|
|
December 31, 2018
|
|||||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
|
% of Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
Due after one year through five years
|
$
|
278,443
|
|
|
$
|
276,706
|
|
|
70.4
|
%
|
Due after five years through ten years
|
46,353
|
|
|
45,275
|
|
|
11.5
|
%
|
||
Asset-backed securities
|
58,369
|
|
|
57,090
|
|
|
14.5
|
%
|
||
Mortgage-backed securities
|
14,344
|
|
|
14,280
|
|
|
3.6
|
%
|
||
Total investments, available for sale
|
$
|
397,509
|
|
|
$
|
393,351
|
|
|
100.0
|
%
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
|
($ in thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Term loan investments
|
$
|
1,113,212
|
|
|
$
|
7,340
|
|
|
$
|
(58,618
|
)
|
|
$
|
1,061,934
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
221,024
|
|
|
8,430
|
|
|
(15,100
|
)
|
|
214,354
|
|
||||
U.S. government and government agency bonds
|
1,963
|
|
|
1
|
|
|
(2
|
)
|
|
1,962
|
|
||||
Asset-backed securities
|
200,361
|
|
|
3,329
|
|
|
(12,953
|
)
|
|
190,737
|
|
||||
Mortgage-backed securities
|
7,399
|
|
|
712
|
|
|
(405
|
)
|
|
7,706
|
|
||||
Non-U.S. government and government agency bonds
|
1,449
|
|
|
18
|
|
|
(11
|
)
|
|
1,456
|
|
||||
Municipal government and government agency bonds
|
380
|
|
|
—
|
|
|
(1
|
)
|
|
379
|
|
||||
Short-term investments
|
325,542
|
|
|
3,817
|
|
|
(56
|
)
|
|
329,303
|
|
||||
Other investments
|
28,672
|
|
|
2,264
|
|
|
(475
|
)
|
|
30,461
|
|
||||
Equities
|
54,893
|
|
|
10,690
|
|
|
(5,784
|
)
|
|
59,799
|
|
||||
Investments, fair value option
|
$
|
1,954,895
|
|
|
$
|
36,601
|
|
|
$
|
(93,405
|
)
|
|
$
|
1,898,091
|
|
Fair Value Through Net Income:
|
|
|
|
|
|
|
|
||||||||
Equities, fair value through net income (1)
|
$
|
78,031
|
|
|
$
|
2,360
|
|
|
$
|
(15,053
|
)
|
|
$
|
65,338
|
|
|
Cost or Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
|
($ in thousands)
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Term loan investments
|
$
|
1,055,664
|
|
|
$
|
767
|
|
|
$
|
(55,779
|
)
|
|
$
|
1,000,652
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
617,013
|
|
|
6,468
|
|
|
(44,867
|
)
|
|
578,614
|
|
||||
U.S. government and government agency bonds
|
113,452
|
|
|
—
|
|
|
(2,206
|
)
|
|
111,246
|
|
||||
Asset-backed securities
|
174,846
|
|
|
673
|
|
|
(6,626
|
)
|
|
168,893
|
|
||||
Mortgage-backed securities
|
9,122
|
|
|
—
|
|
|
(1,241
|
)
|
|
7,881
|
|
||||
Non-U.S. government and government agency bonds
|
50,914
|
|
|
1
|
|
|
(1,874
|
)
|
|
49,041
|
|
||||
Municipal government and government agency bonds
|
7,306
|
|
|
—
|
|
|
(162
|
)
|
|
7,144
|
|
||||
Short-term investments
|
281,959
|
|
|
570
|
|
|
(397
|
)
|
|
282,132
|
|
||||
Other investments
|
50,000
|
|
|
—
|
|
|
(238
|
)
|
|
49,762
|
|
||||
Equities
|
56,609
|
|
|
5,136
|
|
|
(5,107
|
)
|
|
56,638
|
|
||||
Investments, fair value option
|
$
|
2,416,885
|
|
|
$
|
13,615
|
|
|
$
|
(118,497
|
)
|
|
$
|
2,312,003
|
|
Fair Value Through Net Income:
|
|
|
|
|
|
|
|
||||||||
Equities, fair value through net income (1)
|
$
|
41,358
|
|
|
$
|
2,030
|
|
|
$
|
(10,375
|
)
|
|
$
|
33,013
|
|
|
December 31, 2019
|
|||||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
|
% of Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
Due in one year or less
|
$
|
307,041
|
|
|
$
|
306,372
|
|
|
16.9
|
%
|
Due after one year through five years
|
779,643
|
|
|
742,960
|
|
|
41.1
|
%
|
||
Due after five years through ten years
|
514,961
|
|
|
495,416
|
|
|
27.4
|
%
|
||
Due after ten years
|
61,925
|
|
|
64,640
|
|
|
3.6
|
%
|
||
Asset-backed securities
|
200,361
|
|
|
190,737
|
|
|
10.6
|
%
|
||
Mortgage-backed securities
|
7,399
|
|
|
7,706
|
|
|
0.4
|
%
|
||
Total
|
$
|
1,871,330
|
|
|
$
|
1,807,831
|
|
|
100.0
|
%
|
|
December 31, 2018
|
|||||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
|
% of Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
Due in one year or less
|
$
|
300,554
|
|
|
$
|
300,519
|
|
|
13.6
|
%
|
Due after one year through five years
|
1,044,539
|
|
|
992,834
|
|
|
45.0
|
%
|
||
Due after five years through ten years
|
777,290
|
|
|
731,662
|
|
|
33.2
|
%
|
||
Due after ten years
|
3,925
|
|
|
3,814
|
|
|
0.2
|
%
|
||
Asset-backed securities
|
174,846
|
|
|
168,893
|
|
|
7.6
|
%
|
||
Mortgage-backed securities
|
9,122
|
|
|
7,881
|
|
|
0.4
|
%
|
||
Total
|
$
|
2,310,276
|
|
|
$
|
2,205,603
|
|
|
100.0
|
%
|
|
Credit Rating (1)
|
||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019
|
Fair Value
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB
|
|
B
|
|
CCC
|
|
CC
|
|
C
|
|
D
|
|
Not Rated
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Term loan investments
|
$
|
1,061,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,617
|
|
|
$
|
761,168
|
|
|
$
|
215,909
|
|
|
$
|
6,823
|
|
|
$
|
2,119
|
|
|
$
|
—
|
|
|
$
|
66,298
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Corporate bonds
|
372,473
|
|
|
—
|
|
|
36,128
|
|
|
81,401
|
|
|
41,103
|
|
|
9,003
|
|
|
58,345
|
|
|
135,613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,880
|
|
||||||||||||
U.S. government and government agency bonds
|
285,609
|
|
|
—
|
|
|
285,609
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Asset-backed securities
|
336,171
|
|
|
2,006
|
|
|
—
|
|
|
29,179
|
|
|
223,956
|
|
|
29,695
|
|
|
18,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,954
|
|
||||||||||||
Mortgage-backed securities
|
32,456
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|
23,650
|
|
|
976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,497
|
|
|
4,233
|
|
||||||||||||
Non-U.S. government and government agency bonds
|
133,409
|
|
|
—
|
|
|
132,460
|
|
|
—
|
|
|
949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Municipal government and government agency bonds
|
2,184
|
|
|
1,135
|
|
|
573
|
|
|
476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments
|
2,224,236
|
|
|
3,141
|
|
|
454,770
|
|
|
112,156
|
|
|
289,658
|
|
|
49,291
|
|
|
837,894
|
|
|
351,522
|
|
|
6,823
|
|
|
2,119
|
|
|
2,497
|
|
|
114,365
|
|
||||||||||||
Short-term investments
|
329,303
|
|
|
25,783
|
|
|
136,842
|
|
|
34,903
|
|
|
115,155
|
|
|
—
|
|
|
—
|
|
|
8,359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,261
|
|
||||||||||||
Total fixed income instruments and short-term investments
|
2,553,539
|
|
|
28,924
|
|
|
591,612
|
|
|
147,059
|
|
|
404,813
|
|
|
49,291
|
|
|
837,894
|
|
|
359,881
|
|
|
6,823
|
|
|
2,119
|
|
|
2,497
|
|
|
122,626
|
|
||||||||||||
Other Investments
|
30,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Equities
|
125,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total
|
$
|
2,709,137
|
|
|
$
|
28,924
|
|
|
$
|
591,612
|
|
|
$
|
147,059
|
|
|
$
|
404,813
|
|
|
$
|
49,291
|
|
|
$
|
837,894
|
|
|
$
|
359,881
|
|
|
$
|
6,823
|
|
|
$
|
2,119
|
|
|
$
|
2,497
|
|
|
$
|
122,626
|
|
|
Credit Rating (1)
|
||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2018
|
Fair Value
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB
|
|
B
|
|
CCC
|
|
CC
|
|
C
|
|
D
|
|
Not Rated
|
||||||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||
Term loan investments
|
$
|
1,000,652
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,844
|
|
|
$
|
677,211
|
|
|
$
|
201,116
|
|
|
$
|
2,438
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,043
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Corporate bonds
|
654,607
|
|
|
3,961
|
|
|
58,185
|
|
|
100,590
|
|
|
63,791
|
|
|
15,246
|
|
|
174,867
|
|
|
203,505
|
|
|
—
|
|
|
2,200
|
|
|
—
|
|
|
32,262
|
|
||||||||||||
U.S. government and government agency bonds
|
268,675
|
|
|
—
|
|
|
268,675
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Asset-backed securities
|
225,983
|
|
|
4,532
|
|
|
4,973
|
|
|
10,278
|
|
|
113,075
|
|
|
36,643
|
|
|
20,818
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,664
|
|
||||||||||||
Mortgage-backed securities
|
22,161
|
|
|
—
|
|
|
—
|
|
|
944
|
|
|
13,336
|
|
|
742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,962
|
|
|
4,177
|
|
||||||||||||
Non-U.S. government and government agency bonds
|
136,513
|
|
|
5,173
|
|
|
122,715
|
|
|
8,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Municipal government and government agency bonds
|
8,231
|
|
|
6,490
|
|
|
715
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments
|
2,316,822
|
|
|
20,156
|
|
|
455,263
|
|
|
121,463
|
|
|
190,202
|
|
|
110,475
|
|
|
872,896
|
|
|
404,621
|
|
|
2,438
|
|
|
2,200
|
|
|
2,962
|
|
|
134,146
|
|
||||||||||||
Short-term investments
|
282,132
|
|
|
4,450
|
|
|
128,015
|
|
|
54,970
|
|
|
68,853
|
|
|
—
|
|
|
25,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total fixed income instruments and short-term investments
|
2,598,954
|
|
|
24,606
|
|
|
583,278
|
|
|
176,433
|
|
|
259,055
|
|
|
110,475
|
|
|
898,740
|
|
|
404,621
|
|
|
2,438
|
|
|
2,200
|
|
|
2,962
|
|
|
134,146
|
|
||||||||||||
Other Investments
|
49,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Equities
|
89,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total
|
$
|
2,738,367
|
|
|
$
|
24,606
|
|
|
$
|
583,278
|
|
|
$
|
176,433
|
|
|
$
|
259,055
|
|
|
$
|
110,475
|
|
|
$
|
898,740
|
|
|
$
|
404,621
|
|
|
$
|
2,438
|
|
|
$
|
2,200
|
|
|
$
|
2,962
|
|
|
$
|
134,146
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
|
Net Interest Income
|
|
Net Unrealized Gains (Losses)
|
|
Net Realized Gains (Losses)
|
|
Net Investment Income (Loss)
|
||||||||
|
($ in thousands)
|
||||||||||||||
Net investment income (loss) by asset class:
|
|
|
|
|
|
|
|
||||||||
Term loan investments
|
$
|
90,048
|
|
|
$
|
3,526
|
|
|
$
|
(19,599
|
)
|
|
$
|
73,975
|
|
Fixed maturities - Fair value option
|
48,698
|
|
|
23,884
|
|
|
7,048
|
|
|
79,630
|
|
||||
Fixed maturities - Available for sale (1)
|
17,893
|
|
|
—
|
|
|
5,673
|
|
|
23,566
|
|
||||
Short-term investments
|
4,131
|
|
|
(277
|
)
|
|
27
|
|
|
3,881
|
|
||||
Equities (2)
|
203
|
|
|
4,337
|
|
|
—
|
|
|
4,540
|
|
||||
Equities, fair value through net income (2)
|
2,201
|
|
|
(3,963
|
)
|
|
(1,162
|
)
|
|
(2,924
|
)
|
||||
Other investments
|
714
|
|
|
2,027
|
|
|
(2,719
|
)
|
|
22
|
|
||||
Other (3)
|
—
|
|
|
2,657
|
|
|
2,784
|
|
|
5,441
|
|
||||
Investment management fees - related parties
|
(18,392
|
)
|
|
—
|
|
|
—
|
|
|
(18,392
|
)
|
||||
Borrowing and miscellaneous other investment expenses
|
(29,285
|
)
|
|
—
|
|
|
—
|
|
|
(29,285
|
)
|
||||
Investment performance fees - related parties
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,191
|
)
|
||||
|
$
|
116,211
|
|
|
$
|
32,191
|
|
|
$
|
(7,948
|
)
|
|
$
|
128,263
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
Net Interest Income
|
|
Net Unrealized Gains (Losses)
|
|
Net Realized Gains (Losses)
|
|
Net Investment Income (Loss)
|
||||||||
|
($ in thousands)
|
||||||||||||||
Net investment income (loss) by asset class:
|
|
|
|
|
|
|
|
||||||||
Term loan investments
|
$
|
79,971
|
|
|
$
|
(53,702
|
)
|
|
$
|
(3,988
|
)
|
|
$
|
22,281
|
|
Fixed maturities - Fair value option
|
63,556
|
|
|
(42,601
|
)
|
|
(11,490
|
)
|
|
9,465
|
|
||||
Fixed maturities - Available for sale (1)
|
5,802
|
|
|
—
|
|
|
(878
|
)
|
|
4,924
|
|
||||
Short-term investments
|
2,722
|
|
|
390
|
|
|
35
|
|
|
3,147
|
|
||||
Equities (2)
|
(425
|
)
|
|
(3,266
|
)
|
|
8,223
|
|
|
4,532
|
|
||||
Equities, fair value through net income (2)
|
1,290
|
|
|
(8,786
|
)
|
|
3,310
|
|
|
(4,186
|
)
|
||||
Other investments
|
—
|
|
|
149
|
|
|
—
|
|
|
149
|
|
||||
Other (3)
|
—
|
|
|
(1,230
|
)
|
|
—
|
|
|
(1,230
|
)
|
||||
Investment management fees - related parties
|
(17,006
|
)
|
|
—
|
|
|
—
|
|
|
(17,006
|
)
|
||||
Borrowing and miscellaneous other investment expenses
|
(28,377
|
)
|
|
—
|
|
|
—
|
|
|
(28,377
|
)
|
||||
Investment performance fees - related parties
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||
|
$
|
107,533
|
|
|
$
|
(109,046
|
)
|
|
$
|
(4,788
|
)
|
|
$
|
(6,349
|
)
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
Net Interest Income
|
|
Net Unrealized Gains (Losses)
|
|
Net Realized Gains (Losses)
|
|
Net Investment Income (Loss)
|
||||||||
|
($ in thousands)
|
||||||||||||||
Net investment income (loss) by asset class:
|
|
|
|
|
|
|
|
||||||||
Term loan investments
|
$
|
73,472
|
|
|
$
|
(10,354
|
)
|
|
$
|
346
|
|
|
$
|
63,464
|
|
Fixed maturities - Fair value option
|
49,179
|
|
|
8,017
|
|
|
(660
|
)
|
|
56,536
|
|
||||
Short-term investments
|
2,473
|
|
|
220
|
|
|
(1,745
|
)
|
|
948
|
|
||||
Equities (1)
|
339
|
|
|
2,902
|
|
|
2,781
|
|
|
6,022
|
|
||||
Other investments
|
—
|
|
|
(387
|
)
|
|
—
|
|
|
(387
|
)
|
||||
Investment management fees - related parties
|
(21,451
|
)
|
|
—
|
|
|
—
|
|
|
(21,451
|
)
|
||||
Borrowing and miscellaneous other investment expenses
|
(17,489
|
)
|
|
—
|
|
|
—
|
|
|
(17,489
|
)
|
||||
Investment performance fees - related parties
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,905
|
)
|
||||
|
$
|
86,523
|
|
|
$
|
398
|
|
|
$
|
722
|
|
|
$
|
72,738
|
|
•
|
Level 1: Inputs to the valuation methodology are observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
|
•
|
Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and
|
•
|
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||
December 31, 2019
|
Estimated
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
|
($ in thousands)
|
||||||||||||||
Assets measured at fair value:
|
|
|
|
|
|
|
|
||||||||
Term loans
|
$
|
1,061,934
|
|
|
$
|
—
|
|
|
$
|
1,025,886
|
|
|
$
|
36,048
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
372,473
|
|
|
—
|
|
|
371,540
|
|
|
933
|
|
||||
U.S. government and government agency bonds
|
285,609
|
|
|
285,500
|
|
|
109
|
|
|
—
|
|
||||
Asset-backed securities
|
336,171
|
|
|
—
|
|
|
336,171
|
|
|
—
|
|
||||
Mortgage-backed securities
|
32,456
|
|
|
—
|
|
|
32,456
|
|
|
—
|
|
||||
Non-U.S. government and government agency bonds
|
133,409
|
|
|
—
|
|
|
133,409
|
|
|
—
|
|
||||
Municipal government and government agency bonds
|
2,184
|
|
|
—
|
|
|
2,184
|
|
|
—
|
|
||||
Short-term investments
|
329,303
|
|
|
318,012
|
|
|
11,291
|
|
|
—
|
|
||||
Equities
|
125,137
|
|
|
13,548
|
|
|
2,998
|
|
|
108,591
|
|
||||
Other underwriting derivative assets
|
148
|
|
|
—
|
|
|
148
|
|
|
—
|
|
||||
Investment derivative assets (1)
|
1,667
|
|
|
—
|
|
|
1,667
|
|
|
—
|
|
||||
Other investments measured at net asset value (2)
|
30,461
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
2,710,952
|
|
|
$
|
617,060
|
|
|
$
|
1,917,859
|
|
|
$
|
145,572
|
|
|
|
|
|
|
|
|
|
||||||||
Investment derivative liabilities (1)
|
257
|
|
|
—
|
|
|
257
|
|
|
—
|
|
||||
Payable for securities sold short:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
66,257
|
|
|
—
|
|
|
66,257
|
|
|
—
|
|
||||
Total liabilities measured at fair value
|
$
|
66,514
|
|
|
$
|
—
|
|
|
$
|
66,514
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||
December 31, 2018
|
Estimated
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
|
($ in thousands)
|
||||||||||||||
Assets measured at fair value:
|
|
|
|
|
|
|
|
||||||||
Term loans
|
$
|
1,000,652
|
|
|
$
|
—
|
|
|
$
|
953,173
|
|
|
$
|
47,479
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
654,607
|
|
|
—
|
|
|
630,330
|
|
|
24,277
|
|
||||
U.S. government and government agency bonds
|
268,675
|
|
|
268,567
|
|
|
108
|
|
|
—
|
|
||||
Asset-backed securities
|
225,983
|
|
|
—
|
|
|
203,423
|
|
|
22,560
|
|
||||
Mortgage-backed securities
|
22,161
|
|
|
—
|
|
|
22,161
|
|
|
—
|
|
||||
Non-U.S. government and government agency bonds
|
136,513
|
|
|
—
|
|
|
136,513
|
|
|
—
|
|
||||
Municipal government and government agency bonds
|
8,231
|
|
|
—
|
|
|
8,231
|
|
|
—
|
|
||||
Short-term investments
|
282,132
|
|
|
256,288
|
|
|
25,844
|
|
|
—
|
|
||||
Equities
|
89,651
|
|
|
7,977
|
|
|
11,223
|
|
|
70,451
|
|
||||
Other underwriting derivative assets
|
249
|
|
|
—
|
|
|
249
|
|
|
—
|
|
||||
Investment derivative assets (1)
|
51
|
|
|
—
|
|
|
51
|
|
|
—
|
|
||||
Other investments measured at net asset value (2)
|
49,762
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
2,738,667
|
|
|
$
|
532,832
|
|
|
$
|
1,991,306
|
|
|
$
|
164,767
|
|
|
|
|
|
|
|
|
|
||||||||
Investment derivative liabilities (1)
|
1,279
|
|
|
—
|
|
|
1,279
|
|
|
—
|
|
||||
Payable for securities sold short:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
7,790
|
|
|
—
|
|
|
7,790
|
|
|
—
|
|
||||
Equities (1)
|
1,138
|
|
|
—
|
|
|
1,138
|
|
|
—
|
|
||||
Total liabilities measured at fair value
|
$
|
10,207
|
|
|
$
|
—
|
|
|
$
|
10,207
|
|
|
$
|
—
|
|
Year Ended December 31, 2019
|
Beginning
Balance
|
|
Transfers in (out) of Level 3 (1)
|
|
Net Purchases (Sales)(2)
|
|
Net Unrealized Gains (Losses)(3)
|
|
Net Unrealized Foreign Exchange Gains (Losses)
|
|
Ending
Balance
|
||||||||||||
Term loans
|
$
|
47,479
|
|
|
$
|
—
|
|
|
$
|
(15,402
|
)
|
|
$
|
3,971
|
|
|
$
|
—
|
|
|
$
|
36,048
|
|
Corporate bonds
|
24,277
|
|
|
—
|
|
|
(23,341
|
)
|
|
(3
|
)
|
|
—
|
|
|
933
|
|
||||||
Asset-backed securities
|
22,560
|
|
|
(22,560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equities
|
70,451
|
|
|
—
|
|
|
39,705
|
|
|
(1,565
|
)
|
|
—
|
|
|
108,591
|
|
||||||
Total
|
$
|
164,767
|
|
|
$
|
(22,560
|
)
|
|
$
|
962
|
|
|
$
|
2,403
|
|
|
$
|
—
|
|
|
$
|
145,572
|
|
Year Ended December 31, 2018
|
Beginning
Balance
|
|
Net Purchases (Sales)(2)
|
|
Net Unrealized Gains (Losses)(3)
|
|
Net Unrealized Foreign Exchange Gains (Losses)
|
|
Ending
Balance
|
||||||||||
Term loans
|
$
|
62,478
|
|
|
$
|
(11,705
|
)
|
|
$
|
(3,294
|
)
|
|
$
|
—
|
|
|
$
|
47,479
|
|
Corporate bonds
|
24,710
|
|
|
985
|
|
|
(285
|
)
|
|
(1,133
|
)
|
|
24,277
|
|
|||||
Asset-backed securities
|
—
|
|
|
22,560
|
|
|
—
|
|
|
—
|
|
|
22,560
|
|
|||||
Equities
|
52,921
|
|
|
21,932
|
|
|
(4,402
|
)
|
|
—
|
|
|
70,451
|
|
|||||
Total
|
$
|
140,109
|
|
|
$
|
33,772
|
|
|
$
|
(7,981
|
)
|
|
$
|
(1,133
|
)
|
|
$
|
164,767
|
|
|
Estimated Fair Value
|
|
|
||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
|
Net Derivatives
|
|
Notional Amount (1)
|
||||||||
|
($ in thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Other underwriting derivatives
|
$
|
148
|
|
|
$
|
—
|
|
|
$
|
148
|
|
|
$
|
59,879
|
|
Total return swaps
|
1,667
|
|
|
257
|
|
|
1,410
|
|
|
162,678
|
|
||||
Total
|
$
|
1,815
|
|
|
$
|
257
|
|
|
$
|
1,558
|
|
|
$
|
222,557
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Other underwriting derivatives
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
249
|
|
|
$
|
72,148
|
|
Options
|
808
|
|
|
1,138
|
|
|
(330
|
)
|
|
24,551
|
|
||||
Total return swaps
|
51
|
|
|
1,279
|
|
|
(1,228
|
)
|
|
91,663
|
|
||||
Total
|
$
|
1,108
|
|
|
$
|
2,417
|
|
|
$
|
(1,309
|
)
|
|
$
|
188,362
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Underwriting derivatives:
|
|
|
|
|
|
||||||
Other underwriting income (loss)
|
$
|
2,412
|
|
|
$
|
2,722
|
|
|
$
|
3,180
|
|
Investment derivatives:
|
|
|
|
|
|
||||||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Options
|
799
|
|
|
1,314
|
|
|
—
|
|
|||
Total return swaps
|
5,441
|
|
|
(1,230
|
)
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands except share and per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss) before preference dividends and redemption costs
|
$
|
62,541
|
|
|
$
|
(34,883
|
)
|
|
$
|
10,741
|
|
Preference dividends
|
(13,632
|
)
|
|
(19,633
|
)
|
|
(19,633
|
)
|
|||
Accelerated amortization of costs related to the redemption of preference shares
|
(4,164
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) available to common shareholders
|
44,745
|
|
|
(54,516
|
)
|
|
(8,892
|
)
|
|||
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
22,366,682
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|||
Effect of dilutive common share equivalents:
|
|
|
|
|
|
||||||
Weighted average non-vested restricted share units (1)
|
7,286
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - diluted (2)
|
22,373,968
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|||
Earnings (loss) per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.00
|
|
|
$
|
(2.40
|
)
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
2.00
|
|
|
$
|
(2.40
|
)
|
|
$
|
(0.39
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
United States
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
—
|
|
Gibraltar
|
—
|
|
|
—
|
|
|
21
|
|
|||
United Kingdom
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
20
|
|
|
27
|
|
|
21
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
||||||
United States
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gibraltar
|
—
|
|
|
—
|
|
|
—
|
|
|||
United Kingdom
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total income tax expense (benefit)
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
Bermuda
|
$
|
42,775
|
|
|
$
|
(52,953
|
)
|
|
$
|
(6,041
|
)
|
United States
|
346
|
|
|
(2,146
|
)
|
|
(1,485
|
)
|
|||
Other
|
1,644
|
|
|
610
|
|
|
(1,345
|
)
|
|||
Total income (loss) before income taxes
|
$
|
44,765
|
|
|
$
|
(54,489
|
)
|
|
$
|
(8,871
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Expected income tax expense (benefit) at Bermuda statutory rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Addition (reduction) in income tax expense (benefit) resulting from:
|
|
|
|
|
|
||||||
Foreign taxes at local expected rates
|
280
|
|
|
(395
|
)
|
|
(659
|
)
|
|||
Change in tax rate related to U.S. tax reform
|
—
|
|
|
—
|
|
|
664
|
|
|||
Change in valuation allowance
|
(120
|
)
|
|
400
|
|
|
17
|
|
|||
Other
|
(140
|
)
|
|
22
|
|
|
(1
|
)
|
|||
Total income tax expense (benefit)
|
$
|
20
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Deferred income tax assets:
|
|
|
|
|
|
||||||
Net operating loss
|
$
|
84
|
|
|
$
|
858
|
|
|
$
|
1,068
|
|
Unearned premium reserve
|
291
|
|
|
142
|
|
|
49
|
|
|||
Loss reserves
|
138
|
|
|
59
|
|
|
10
|
|
|||
Ceding commissions
|
1,006
|
|
|
339
|
|
|
170
|
|
|||
Capitalized expenses
|
92
|
|
|
101
|
|
|
109
|
|
|||
Investment basis differences
|
—
|
|
|
133
|
|
|
—
|
|
|||
Other accruals
|
18
|
|
|
—
|
|
|
—
|
|
|||
Deferred tax assets before valuation allowance
|
1,629
|
|
|
1,632
|
|
|
1,406
|
|
|||
Valuation allowance
|
(1,269
|
)
|
|
(1,488
|
)
|
|
(1,127
|
)
|
|||
Deferred tax assets net of valuation allowance
|
360
|
|
|
144
|
|
|
279
|
|
|||
Deferred income tax liabilities:
|
|
|
|
|
|
||||||
Goodwill and intangible assets
|
(260
|
)
|
|
(144
|
)
|
|
(27
|
)
|
|||
Investment basis differences
|
(100
|
)
|
|
—
|
|
|
(252
|
)
|
|||
Total deferred tax liabilities
|
(360
|
)
|
|
(144
|
)
|
|
(279
|
)
|
|||
Net deferred income tax assets (liabilities)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
($ in thousands)
|
|||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
|||
Interest expense
|
1,131
|
|
|
—
|
|
|
—
|
|
Preference dividends
|
902
|
|
|
1,299
|
|
|
1,299
|
|
Accelerated amortization of costs related to the redemption of preference shares
|
276
|
|
|
—
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
||||||
Acquisition expenses
|
$
|
20,808
|
|
|
$
|
15,578
|
|
|
$
|
10,755
|
|
General and administrative expenses
|
6,899
|
|
|
6,796
|
|
|
6,599
|
|
|||
Total
|
$
|
27,707
|
|
|
$
|
22,374
|
|
|
$
|
17,354
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
||||||
Gross premiums written
|
$
|
201,110
|
|
|
$
|
252,841
|
|
|
$
|
289,484
|
|
Net premiums earned
|
235,923
|
|
|
277,576
|
|
|
302,774
|
|
|||
Losses and loss adjustment expenses
|
198,386
|
|
|
211,434
|
|
|
243,079
|
|
|||
Acquisition expenses (1)
|
71,302
|
|
|
89,832
|
|
|
102,098
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
||||||
Gross premiums ceded
|
$
|
(112,701
|
)
|
|
$
|
(55,934
|
)
|
|
$
|
(32,028
|
)
|
Net premiums earned
|
(65,234
|
)
|
|
(44,730
|
)
|
|
(24,351
|
)
|
|||
Losses and loss adjustment expenses
|
(56,164
|
)
|
|
(31,031
|
)
|
|
(19,125
|
)
|
|||
Acquisition expenses (1)
|
(13,672
|
)
|
|
(10,200
|
)
|
|
(4,906
|
)
|
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Consolidated balance sheet items:
|
|
|
|
||||
Total investments
|
$
|
815,528
|
|
|
$
|
719,189
|
|
Premiums receivable
|
106,462
|
|
|
118,208
|
|
||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses
|
79,597
|
|
|
45,954
|
|
||
Prepaid reinsurance premiums
|
75,249
|
|
|
27,598
|
|
||
Deferred acquisition costs, net
|
31,609
|
|
|
48,380
|
|
||
Funds held by reinsurers
|
29,867
|
|
|
33,352
|
|
||
Other assets - contingent commissions
|
—
|
|
|
2,967
|
|
||
Reserve for losses and loss adjustment expenses
|
693,861
|
|
|
631,670
|
|
||
Unearned premiums
|
143,852
|
|
|
166,491
|
|
||
Losses payable
|
39,619
|
|
|
19,098
|
|
||
Reinsurance balances payable
|
62,301
|
|
|
20,299
|
|
||
Senior notes
|
35,000
|
|
|
—
|
|
||
Amounts due to affiliates
|
4,467
|
|
|
5,888
|
|
||
Other liabilities - contingent commissions
|
5,516
|
|
|
—
|
|
||
Contingently redeemable preference shares
|
3,462
|
|
|
14,627
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
||||||
Investment management fees - related parties
|
$
|
1,062
|
|
|
$
|
1,176
|
|
|
$
|
624
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Consolidated statement of income (loss) items:
|
|
|
|
|
|
||||||
Investment management fees - related parties
|
$
|
17,330
|
|
|
$
|
15,830
|
|
|
$
|
20,827
|
|
Investment performance fees - related parties
|
12,191
|
|
|
48
|
|
|
14,905
|
|
|||
|
$
|
29,521
|
|
|
$
|
15,878
|
|
|
$
|
35,732
|
|
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Consolidated balance sheet items:
|
|
|
|
||||
Other investments, at fair value
|
$
|
30,461
|
|
|
$
|
49,762
|
|
Investment management and performance fees payable
|
17,762
|
|
|
3,807
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Fees paid to Artex under insurance management services agreement
|
$
|
431
|
|
|
$
|
534
|
|
|
$
|
325
|
|
|
Year Ended December 31, 2019
|
||
|
($ in thousands)
|
||
Lease cost:
|
|
||
Operating lease
|
$
|
241
|
|
Other information on operating lease:
|
|
||
Cash payments included in the measurement of lease liability reported in operating cash flows
|
283
|
|
|
Right-of-use assets (1)
|
970
|
|
|
Operating lease liability (2)
|
970
|
|
|
Weighted average discount rate
|
3.9
|
%
|
|
Weighted average remaining lease term in years
|
3.75 years
|
|
|
December 31, 2019
|
|
|
($ in thousands)
|
|
2020
|
283
|
|
2021
|
283
|
|
2022
|
283
|
|
2023
|
189
|
|
Total undiscounted lease payments
|
1,038
|
|
Less: present value adjustment
|
(68
|
)
|
Operating lease liability
|
970
|
|
|
December 31, 2018
|
|
|
($ in thousands)
|
|
Future rental commitments
|
|
|
2019
|
283
|
|
2020
|
283
|
|
2021
|
283
|
|
2022
|
283
|
|
2023
|
189
|
|
Total
|
1,321
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Preference shares:
|
|
|
|
|
|
||||||
Balance at the beginning of the period
|
$
|
220,992
|
|
|
$
|
220,622
|
|
|
$
|
220,253
|
|
Preference shares repurchased during the period
|
(173,081
|
)
|
|
—
|
|
|
—
|
|
|||
Accelerated amortization of costs related to the redemption of preference shares
|
4,164
|
|
|
—
|
|
|
—
|
|
|||
Accretion discount and issuance costs on remaining preference shares
|
230
|
|
|
370
|
|
|
369
|
|
|||
Balance at the end of the period
|
$
|
52,305
|
|
|
$
|
220,992
|
|
|
$
|
220,622
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Common shares:
|
|
|
|
|
|
|||
Shares issued and outstanding, beginning of year
|
22,682,875
|
|
|
22,682,875
|
|
|
22,682,875
|
|
Shares issued (1)
|
9,425
|
|
|
—
|
|
|
—
|
|
Shares issued, end of year
|
22,692,300
|
|
|
22,682,875
|
|
|
22,682,875
|
|
Common shares in treasury, end of year
|
(2,789,405
|
)
|
|
—
|
|
|
—
|
|
Shares outstanding, end of year (2)
|
19,902,895
|
|
|
22,682,875
|
|
|
22,682,875
|
|
|
December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Actual
|
|
Required
|
|
Actual
|
|
Required
|
||||||||
|
($ in thousands)
|
||||||||||||||
Statutory capital and surplus:
|
|
|
|
|
|
|
|
||||||||
Bermuda (1)
|
$
|
1,106,576
|
|
|
$
|
700,000
|
|
|
$
|
1,114,933
|
|
|
$
|
650,902
|
|
Watford Specialty Insurance Company
|
59,763
|
|
|
4,603
|
|
|
60,964
|
|
|
3,464
|
|
||||
Watford Insurance Company
|
29,749
|
|
|
2,280
|
|
|
17,088
|
|
|
1,789
|
|
||||
United States
|
89,512
|
|
|
6,883
|
|
|
78,052
|
|
|
5,253
|
|
||||
Gibraltar
|
29,113
|
|
|
15,710
|
|
|
22,927
|
|
|
13,136
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ in thousands)
|
||||||||||
Statutory net income (loss):
|
|
|
|
|
|
||||||
Bermuda
|
$
|
72,771
|
|
|
$
|
(25,110
|
)
|
|
$
|
10,982
|
|
Watford Specialty Insurance Company
|
426
|
|
|
525
|
|
|
315
|
|
|||
Watford Insurance Company
|
(730
|
)
|
|
(2,488
|
)
|
|
(204
|
)
|
|||
United States
|
(304
|
)
|
|
(1,963
|
)
|
|
111
|
|
|||
Gibraltar
|
1,681
|
|
|
653
|
|
|
1,320
|
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Second Quarter
|
|
First Quarter
|
||||||||
|
($ in thousands, except per share data)
|
||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
$
|
112,353
|
|
|
$
|
155,752
|
|
|
$
|
119,370
|
|
|
$
|
145,387
|
|
Net premiums earned
|
133,446
|
|
|
125,832
|
|
|
151,318
|
|
|
146,094
|
|
||||
Underwriting income (loss)
|
(37,819
|
)
|
|
(5,021
|
)
|
|
(5,266
|
)
|
|
(5,970
|
)
|
||||
Net interest income
|
29,826
|
|
|
29,536
|
|
|
26,415
|
|
|
30,434
|
|
||||
Realized and unrealized gains (losses) on investments
|
6,105
|
|
|
(14,646
|
)
|
|
(936
|
)
|
|
33,720
|
|
||||
Net investment income (loss)
|
32,082
|
|
|
14,040
|
|
|
23,787
|
|
|
58,354
|
|
||||
Preference dividends
|
(1,209
|
)
|
|
(2,608
|
)
|
|
(4,908
|
)
|
|
(4,907
|
)
|
||||
Accelerated amortization of costs related to the redemption of preference shares
|
—
|
|
|
(4,164
|
)
|
|
—
|
|
|
—
|
|
||||
Net income (loss) available to common shareholders
|
(16,864
|
)
|
|
152
|
|
|
13,825
|
|
|
47,632
|
|
||||
Earnings (loss) per common share - basic
|
$
|
(0.79
|
)
|
|
$
|
0.01
|
|
|
$
|
0.61
|
|
|
$
|
2.10
|
|
Earnings (loss) per common share - diluted
|
$
|
(0.79
|
)
|
|
$
|
0.01
|
|
|
$
|
0.61
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
$
|
132,360
|
|
|
$
|
151,677
|
|
|
$
|
140,586
|
|
|
$
|
179,552
|
|
Net premiums earned
|
146,973
|
|
|
135,624
|
|
|
159,518
|
|
|
136,747
|
|
||||
Underwriting income (loss)
|
(22,660
|
)
|
|
(912
|
)
|
|
(1,006
|
)
|
|
(1,262
|
)
|
||||
Net interest income
|
29,955
|
|
|
27,397
|
|
|
26,042
|
|
|
24,139
|
|
||||
Realized and unrealized gains (losses) on investments
|
(97,597
|
)
|
|
(3,617
|
)
|
|
(10,614
|
)
|
|
(2,006
|
)
|
||||
Net investment income (loss)
|
(61,084
|
)
|
|
21,373
|
|
|
13,826
|
|
|
19,536
|
|
||||
Preference dividends
|
(4,909
|
)
|
|
(4,909
|
)
|
|
(4,908
|
)
|
|
(4,907
|
)
|
||||
Net income (loss) available to common shareholders
|
(95,259
|
)
|
|
18,837
|
|
|
9,124
|
|
|
12,782
|
|
||||
Earnings (loss) per common share - basic
|
$
|
(4.20
|
)
|
|
$
|
0.83
|
|
|
$
|
0.41
|
|
|
$
|
0.56
|
|
Earnings (loss) per common share - diluted
|
$
|
(4.20
|
)
|
|
$
|
0.83
|
|
|
$
|
0.41
|
|
|
$
|
0.56
|
|
|
|
Column A
|
|
Column B
|
|
Column C
|
||||
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Stock Options, Warrants and Rights
(1)
|
|
Weighted-Average Exercise Price of Outstanding Stock Options, Warrants and Rights ($)
(1)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A)
(2)
|
||||
Equity compensation plans approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Equity compensation plans not approved by security holders
|
|
155,862
|
|
|
N/A
|
|
|
742,028
|
|
|
Total
|
|
155,862
|
|
|
—
|
|
|
742,028
|
|
1.
|
Financial statements
|
2.
|
Financial statement schedules
|
|
Page
|
I. Summary of Investments- Other than Investments in Related Parties
|
|
As of December 31, 2019
|
|
|
|
II. Condensed Financial Statements of Registrant
|
|
As of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
IV. Reinsurance
|
|
As of and for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
VI. Supplementary Information for Property and Casualty Insurance Underwriters
|
|
As of and for the years ended December 31, 2019, 2018 and 2017
|
3.
|
Exhibits
|
|
|
Incorporated by Reference
|
|
||
Exhibit
Number
|
Exhibit Description
|
Form
|
Original Exhibit Number
|
Date Filed
|
Filed Herewith
|
3.1
|
Form 10
|
3.1
|
January 29, 2019
|
|
|
3.2
|
Form 10
|
3.2
|
January 29, 2019
|
|
|
3.3
|
Form 10
|
3.3
|
January 29, 2019
|
|
|
4.1
|
Form 10
|
4.1
|
January 29, 2019
|
|
|
4.2
|
Form 10
|
4.2
|
January 29, 2019
|
|
|
4.3
|
Form 10
|
4.3
|
January 29, 2019
|
|
|
4.4
|
Form 10
|
4.4
|
January 29, 2019
|
|
|
4.5
|
Form 10
|
4.5
|
January 29, 2019
|
|
|
4.6
|
Form 10
|
4.6
|
January 29, 2019
|
|
|
4.7
|
Form 10
|
4.7
|
January 29, 2019
|
|
|
4.8
|
S-8
|
4.2
|
May 9, 2019
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit
Number
|
Exhibit Description
|
Form
|
Original Exhibit Number
|
Date Filed
|
Filed Herewith
|
4.8.1
|
|
|
|
X
|
|
4.9
|
8-K
|
4.1
|
July 2, 2019
|
|
|
4.10
|
8-K
|
4.2
|
July 2, 2019
|
|
|
4.11
|
|
|
|
X
|
|
10.1
|
Form 10
|
10.1
|
January 29, 2019
|
|
|
10.1.1
|
Form 10
|
10.1.1
|
January 29, 2019
|
|
|
10.2
|
Form 10
|
10.2
|
January 29, 2019
|
|
|
10.3
|
Form 10
|
10.3
|
January 29, 2019
|
|
|
10.3.1
|
Form 10
|
10.3.1
|
January 29, 2019
|
|
|
10.4
|
Form 10
|
10.4
|
January 29, 2019
|
|
|
10.5
|
Form 10
|
10.5
|
January 29, 2019
|
|
|
10.6
|
Form 10
|
10.6
|
January 29, 2019
|
|
|
10.7
|
Form 10
|
10.7
|
January 29, 2019
|
|
|
10.8
|
Form 10
|
10.8
|
January 29, 2019
|
|
|
10.9
|
Form 10
|
10.9
|
January 29, 2019
|
|
|
10.10
|
Form 10
|
10.10
|
January 29, 2019
|
|
|
10.11
|
Form 10
|
10.11
|
January 29, 2019
|
|
|
10.12
|
Form 10
|
10.12
|
January 29, 2019
|
|
|
10.13
|
Form 10
|
10.13
|
January 29, 2019
|
|
|
10.14
|
Form 10
|
10.14
|
January 29, 2019
|
|
|
10.15#
|
Form 10
|
10.15#
|
January 29, 2019
|
|
|
10.15.1#
|
Form 10
|
10.15.1#
|
January 29, 2019
|
|
|
10.16#
|
Form 10
|
10.16#
|
January 29, 2019
|
|
|
10.16.1
|
Form 10
|
10.16.1
|
January 29, 2019
|
|
|
10.16.2
|
Form 10
|
10.16.2
|
January 29, 2019
|
|
|
10.16.3#
|
Form 10
|
10.16.3#
|
January 29, 2019
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit
Number
|
Exhibit Description
|
Form
|
Original Exhibit Number
|
Date Filed
|
Filed Herewith
|
10.17#
|
Form 10
|
10.17#
|
January 29, 2019
|
|
|
10.17.1#
|
Form 10
|
10.17.1#
|
January 29, 2019
|
|
|
10.18#
|
Form 10
|
10.18#
|
January 29, 2019
|
|
|
10.18.1#
|
Form 10
|
10.18.1#
|
January 29, 2019
|
|
|
10.18.2#
|
Form 10
|
10.18.2#
|
January 29, 2019
|
|
|
10.18.3#
|
Form 10
|
10.18.3#
|
January 29, 2019
|
|
|
10.19#
|
Form 10
|
10.19#
|
January 29, 2019
|
|
|
10.19.1
|
Form 10
|
10.19.1
|
January 29, 2019
|
|
|
10.19.2
|
Form 10
|
10.19.2
|
January 29, 2019
|
|
|
10.19.3
|
Form 10
|
10.19.3
|
January 29, 2019
|
|
|
10.20#
|
Form 10
|
10.20#
|
January 29, 2019
|
|
|
10.20.1
|
Form 10
|
10.20.1
|
January 29, 2019
|
|
|
10.21#
|
Form 10
|
10.21#
|
January 29, 2019
|
|
|
10.21.1
|
Form 10
|
10.21.1
|
January 29, 2019
|
|
|
10.22#
|
Form 10
|
10.22#
|
January 29, 2019
|
|
|
10.23
|
Form 10
|
10.23
|
January 29, 2019
|
|
|
10.24
|
Form 10
|
10.24
|
January 29, 2019
|
|
|
10.25
|
Form 10
|
10.25
|
January 29, 2019
|
|
|
10.26
|
Form 10
|
10.26
|
January 29, 2019
|
|
|
10.27
|
Form 10
|
10.27
|
January 29, 2019
|
|
|
10.28
|
Form 10
|
10.28
|
January 29, 2019
|
|
|
10.28.1
|
10-Q
|
10.3
|
August 8, 2019
|
|
|
10.29
|
Form 10
|
10.29
|
January 29, 2019
|
|
|
10.29.1
|
10-Q
|
10.4
|
August 8, 2019
|
|
|
10.30
|
Form 10
|
10.30
|
January 29, 2019
|
|
|
10.30.1
|
10-Q
|
10.5
|
August 8, 2019
|
|
|
10.31
|
Form 10
|
10.31
|
January 29, 2019
|
|
|
10.31.1
|
10-Q
|
10.6
|
August 8, 2019
|
|
|
10.32
|
Form 10
|
10.32
|
January 29, 2019
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit
Number
|
Exhibit Description
|
Form
|
Original Exhibit Number
|
Date Filed
|
Filed Herewith
|
10.32.1
|
10-Q
|
10.7
|
August 8, 2019
|
|
|
10.33#
|
Form 10
|
10.33#
|
January 29, 2019
|
|
|
10.34
|
Form 10
|
10.34
|
January 29, 2019
|
|
|
10.34.1
|
Form 10
|
10.34.1
|
January 29, 2019
|
|
|
10.34.2
|
S-1
|
10.34.2
|
March 6, 2019
|
|
|
10.34.3
|
10-Q
|
10.1
|
August 8, 2019
|
|
|
10.34.4
|
Form 10
|
10.34.3
|
January 29, 2019
|
|
|
10.35
|
Form 10
|
10.35
|
January 29, 2019
|
|
|
10.36
|
Form 10
|
10.36
|
January 29, 2019
|
|
|
10.37
|
Form 10
|
10.37
|
January 29, 2019
|
|
|
10.38
|
Form 10
|
10.38
|
January 29, 2019
|
|
|
10.39
|
S-1
|
10.39
|
March 6, 2019
|
|
|
10.41
|
8-K
|
10.1
|
September 25, 2019
|
|
|
21.1
|
Form 10
|
21.1
|
January 29, 2019
|
|
|
23.1
|
|
|
|
X
|
|
31.1
|
|
|
|
X
|
|
31.2
|
|
|
|
X
|
|
32.1
|
|
|
|
X
|
|
32.2
|
|
|
|
X
|
|
101
|
The following financial information from Watford Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2019 formatted in XBRL: (i) Consolidated Balance Sheets at December 31, 2019 and 2018; (ii) Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2019, 2018 and 2017; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017; and (vi) Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
WATFORD HOLDINGS LTD.
|
|
|
|
(REGISTRANT)
|
|
|
|
|
|
|
|
/s/ John F. Rathgeber
|
Date:
|
February 28, 2020
|
|
John F. Rathgeber, Chief Executive Officer
|
|
|
|
|
Date:
|
February 28, 2020
|
|
/s/ Robert L. Hawley
|
|
|
|
Robert L. Hawley, Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
February 28, 2020
|
John F. Rathgeber
|
|
|
||
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
February 28, 2020
|
Robert Hawley
|
|
|
||
|
|
|
|
|
|
|
Chairman of the Board and Director
|
|
February 28, 2020
|
Walter Harris
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Maamoun Rajeh
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Nicolas Papadopoulo
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Garth Lorimer Turner
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Deborah DeCotis
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Thomas Miller
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
February 28, 2020
|
Elizabeth Gile
|
|
|
||
|
|
|
|
|
|
|
Authorized Representative
in the United States
|
|
February 28, 2020
|
Alexandre Scherer
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost or Amortized Cost
|
|
Fair Value
|
|
Amount Shown on the Balance Sheet
|
||||||
December 31, 2019
|
|
|
|
|
|
||||||
Fair Value Option:
|
|
|
|
|
|
||||||
Term loan investments
|
$
|
1,113,212
|
|
|
$
|
1,061,934
|
|
|
$
|
1,061,934
|
|
Fixed maturities:
|
|
|
|
|
|
|
|||||
Corporate bonds
|
221,024
|
|
|
214,354
|
|
|
214,354
|
|
|||
U.S. government and government agency bonds
|
1,963
|
|
|
1,962
|
|
|
1,962
|
|
|||
Asset-backed securities
|
200,361
|
|
|
190,737
|
|
|
190,737
|
|
|||
Mortgage-backed securities
|
7,399
|
|
|
7,706
|
|
|
7,706
|
|
|||
Non-U.S. government and government agency bonds
|
1,449
|
|
|
1,456
|
|
|
1,456
|
|
|||
Municipal government and government agency bonds
|
380
|
|
|
379
|
|
|
379
|
|
|||
Short-term investments
|
325,542
|
|
|
329,303
|
|
|
329,303
|
|
|||
Other investments (1)
|
28,672
|
|
|
30,461
|
|
|
30,461
|
|
|||
Equities
|
54,893
|
|
|
59,799
|
|
|
59,799
|
|
|||
Investments, fair value option
|
1,954,895
|
|
|
1,898,091
|
|
|
1,898,091
|
|
|||
Fair Value Through Net Income:
|
|
|
|
|
|
|
|||||
Equities, fair value through net income
|
78,031
|
|
|
65,338
|
|
|
65,338
|
|
|||
Available for Sale:
|
|
|
|
|
|
|
|||||
U.S. government and government agency bonds
|
282,076
|
|
|
283,647
|
|
|
283,647
|
|
|||
Non-U.S. government and government agency bonds
|
129,456
|
|
|
131,953
|
|
|
131,953
|
|
|||
Corporate bonds
|
155,834
|
|
|
158,119
|
|
|
158,119
|
|
|||
Asset-backed securities
|
145,555
|
|
|
145,434
|
|
|
145,434
|
|
|||
Mortgage-backed securities
|
24,776
|
|
|
24,750
|
|
|
24,750
|
|
|||
Municipal government and government agency bonds
|
1,759
|
|
|
1,805
|
|
|
1,805
|
|
|||
Total investments, available for sale
|
739,456
|
|
|
745,708
|
|
|
745,708
|
|
|||
Total Investments
|
$
|
2,772,382
|
|
|
$
|
2,709,137
|
|
|
$
|
2,709,137
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
179
|
|
|
$
|
4
|
|
Investments in subsidiaries
|
1,111,003
|
|
|
1,120,596
|
|
||
Prepaid expenses
|
80
|
|
|
31
|
|
||
Total assets
|
$
|
1,111,262
|
|
|
$
|
1,120,631
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Other liabilities
|
$
|
840
|
|
|
$
|
4,995
|
|
Amounts due to affiliates
|
13,346
|
|
|
5,036
|
|
||
Senior notes
|
172,418
|
|
|
—
|
|
||
Total liabilities
|
186,604
|
|
|
10,031
|
|
||
|
|
|
|
||||
Contingently redeemable preference shares
|
52,305
|
|
|
220,992
|
|
||
|
|
|
|
||||
Common shares ($0.01 par; shares authorized: 120 million; shares issued: 22,692,300 and 22,682,875)
|
227
|
|
|
227
|
|
||
Additional paid-in capital
|
898,083
|
|
|
895,386
|
|
||
Retained earnings (deficit)
|
43,470
|
|
|
(1,275
|
)
|
||
Accumulated other comprehensive income (loss)
|
5,629
|
|
|
(4,730
|
)
|
||
Common shares held in treasury, at cost (shares: 2,789,405 and Nil)
|
(75,056
|
)
|
|
—
|
|
||
Total shareholders’ equity
|
872,353
|
|
|
889,608
|
|
||
Total liabilities, contingently redeemable preference shares and shareholders’ equity
|
$
|
1,111,262
|
|
|
$
|
1,120,631
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Equity in earnings of consolidated subsidiaries
|
$
|
72,771
|
|
|
$
|
(25,110
|
)
|
|
$
|
10,981
|
|
Net investment income (loss)
|
247
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total revenues
|
73,018
|
|
|
(25,111
|
)
|
|
10,980
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
General and administrative expenses
|
(4,686
|
)
|
|
(772
|
)
|
|
(239
|
)
|
|||
Interest expense
|
(5,791
|
)
|
|
—
|
|
|
—
|
|
|||
Non-recurring direct listing expenses
|
—
|
|
|
(9,000
|
)
|
|
—
|
|
|||
Total expenses
|
(10,477
|
)
|
|
(9,772
|
)
|
|
(239
|
)
|
|||
|
|
|
|
|
|
||||||
Net income (loss) before preference dividends and redemption costs
|
62,541
|
|
|
(34,883
|
)
|
|
10,741
|
|
|||
Preference dividends
|
(13,632
|
)
|
|
(19,633
|
)
|
|
(19,633
|
)
|
|||
Accelerated amortization of costs related to the redemption of preference shares
|
(4,164
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) available to common shareholders
|
$
|
44,745
|
|
|
$
|
(54,516
|
)
|
|
$
|
(8,892
|
)
|
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
$
|
55,104
|
|
|
$
|
(58,274
|
)
|
|
$
|
(9,489
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income (loss) before preference dividends and redemption costs
|
$
|
62,541
|
|
|
$
|
(34,883
|
)
|
|
$
|
10,741
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Share-based compensation
|
2,697
|
|
|
—
|
|
|
—
|
|
|||
Equity in earnings of consolidated subsidiaries
|
(72,771
|
)
|
|
25,110
|
|
|
(10,981
|
)
|
|||
Prepaid expenses
|
(49
|
)
|
|
3,825
|
|
|
(3,850
|
)
|
|||
Other liabilities
|
(4,155
|
)
|
|
4,618
|
|
|
374
|
|
|||
Amounts due to affiliates
|
8,310
|
|
|
1,332
|
|
|
3,704
|
|
|||
Other items
|
136
|
|
|
—
|
|
|
—
|
|
|||
Net Cash Provided By (Used For) Operating Activities
|
(3,291
|
)
|
|
2
|
|
|
(12
|
)
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Return of capital from subsidiary
|
80,687
|
|
|
—
|
|
|
—
|
|
|||
Dividend received from subsidiary
|
12,035
|
|
|
19,265
|
|
|
19,265
|
|
|||
Net Cash Provided By (Used For) Investing Activities
|
92,722
|
|
|
19,265
|
|
|
19,265
|
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Repurchase of preference shares
|
(173,081
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds of issuances of senior notes
|
172,283
|
|
|
—
|
|
|
—
|
|
|||
Purchases of common shares under share repurchase program
|
(75,056
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid on redeemable preference shares
|
(13,402
|
)
|
|
(19,264
|
)
|
|
(19,264
|
)
|
|||
Net Cash Provided By (Used For) Financing Activities
|
(89,256
|
)
|
|
(19,264
|
)
|
|
(19,264
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash
|
175
|
|
|
3
|
|
|
(11
|
)
|
|||
Cash and cash equivalents, beginning of year
|
4
|
|
|
1
|
|
|
12
|
|
|||
Cash and cash equivalents, end of year
|
$
|
179
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
Gross Amount
|
|
Ceded to Other Companies
|
|
Assumed from Other Companies
|
|
Net Amount
|
|
Percentage of Amount Assumed to Net
|
|||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums written:
|
|
|
|
|
|
|
|
|
|
|||||||||
Insurance
|
$
|
339,170
|
|
|
$
|
(162,459
|
)
|
|
$
|
—
|
|
|
$
|
176,711
|
|
|
—
|
%
|
Reinsurance
|
—
|
|
|
(59,560
|
)
|
|
415,711
|
|
|
356,151
|
|
|
116.7
|
%
|
||||
Total
|
$
|
339,170
|
|
|
$
|
(222,019
|
)
|
|
$
|
415,711
|
|
|
$
|
532,862
|
|
|
78.0
|
%
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums written:
|
|
|
|
|
|
|
|
|
|
|||||||||
Insurance
|
$
|
253,760
|
|
|
$
|
(113,922
|
)
|
|
$
|
—
|
|
|
$
|
139,838
|
|
|
—
|
%
|
Reinsurance
|
—
|
|
|
(16,918
|
)
|
|
481,255
|
|
|
464,337
|
|
|
103.6
|
%
|
||||
Total
|
$
|
253,760
|
|
|
$
|
(130,840
|
)
|
|
$
|
481,255
|
|
|
$
|
604,175
|
|
|
79.7
|
%
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums written:
|
|
|
|
|
|
|
|
|
|
|||||||||
Insurance
|
$
|
133,983
|
|
|
$
|
(30,770
|
)
|
|
$
|
—
|
|
|
$
|
103,213
|
|
|
—
|
%
|
Reinsurance
|
—
|
|
|
(16,417
|
)
|
|
466,321
|
|
|
449,904
|
|
|
103.6
|
%
|
||||
Total
|
$
|
133,983
|
|
|
$
|
(47,187
|
)
|
|
$
|
466,321
|
|
|
$
|
553,117
|
|
|
84.3
|
%
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
Column F
|
Column G
|
Column H
|
Column I
|
Column J
|
Column K
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
Net Losses and Loss Adjustment Expenses Incurred Relating to
|
|
|
|
|||||||||||||||||||||||
Affiliation with Registrant
|
Deferred Acquisition Costs, Net
|
Reserves for Losses and Loss Adjustment Expenses
|
Discount, if any,
deducted in
Column C
|
Unearned
Premiums
|
Net
Premiums
Earned
|
Net Investment
Income (Loss)
|
(a) Current Year
|
(b)
Prior Years
|
Amortization
of Deferred
Acquisition Costs
|
Net Paid Losses
and Loss
Adjustment
Expenses
|
Net Premiums Written
|
||||||||||||||||||||||
Consolidated Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
2019
|
$
|
64,044
|
|
$
|
1,263,628
|
|
$
|
—
|
|
$
|
438,907
|
|
$
|
556,690
|
|
$
|
128,263
|
|
$
|
429,322
|
|
$
|
23,813
|
|
$
|
(126,788
|
)
|
$
|
321,835
|
|
$
|
532,862
|
|
2018
|
80,858
|
|
1,032,760
|
|
—
|
|
390,114
|
|
578,862
|
|
(6,349
|
)
|
443,482
|
|
(2,227
|
)
|
(141,136
|
)
|
224,206
|
|
604,175
|
|
|||||||||||
2017
|
85,961
|
|
798,262
|
|
—
|
|
330,644
|
|
531,726
|
|
72,738
|
|
399,530
|
|
36,872
|
|
(140,726
|
)
|
182,119
|
|
553,117
|
|