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EVEREST GROUP, LTD. - Quarter Report: 2022 June (Form 10-Q)

re-20220630
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE
 
COMMISSION
Washington, D.C.
 
20549
FORM
10-Q
_
X
_
 
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
June 30, 2022
___
 
Transition Report Pursuant
 
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission file number
1-15731
EVEREST RE GROUP, LTD.
(Exact name of registrant as specified in its charter)
Bermuda
98-0365432
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Seon Place – 4th Floor
141 Front Street
PO Box HM 845
Hamilton
HM 19
,
Bermuda
441
-
295-0006
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive office)
Indicate
 
by
 
check
 
mark
 
whether
 
the
 
registrant:
 
(1)
 
has
 
filed
 
all
 
reports
 
required
 
to
 
be
 
filed
 
by
 
Section
 
13
 
or
 
15(d)
 
of
 
the
 
Securities
Exchange Act
 
of 1934
 
during the
 
preceding 12
 
months (or
 
for such
 
shorter period
 
that the
 
registrant
 
was required
 
to file
 
such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes
X
No
Indicate by check mark
 
whether the registrant
 
has submitted electronically
 
every Interactive Data
 
File required to be
 
submitted pursuant
to Rule 405 of
 
Regulation S-T during the
 
preceding 12 months (or
 
for such shorter period
 
that the registrant
 
was required to
 
submit such
files).
Yes
X
No
Indicate by check mark
 
whether the registrant
 
is a large accelerated
 
filer, an
 
accelerated filer,
 
a non-accelerated filer,
 
a smaller reporting
company
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
 
reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer
X
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
Indicate by
 
check mark
 
if the
 
registrant
 
is an
 
emerging growth
 
company
 
and has
 
elected not
 
to use
 
the extended
 
transition period
 
for
complying with any new or revised financial accounting standards provided
 
pursuant to Section 13(a) of the Exchange act.
 
YES
NO
X
Indicate by check mark whether the registrant is a shell company (as defined in
 
Rule 12b-2 of the Exchange Act).
YES
NO
X
Securities registered pursuant to Section 12(b) of the Act:
 
Class
Trading Symbol
Name of Exchange where
 
Registered
Number of Shares Outstanding
At August 1, 2022
Common Shares, $0.01 par value
RE
New York Stock Exchange
39,410,456
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
EVEREST RE GROUP,
 
LTD.
CONSOLIDATED
 
BALANCE SHEETS
 
 
June 30,
 
December 31,
 
(Dollars and share amounts in thousands, except par value per share)
2022
2021
(unaudited)
ASSETS:
Fixed maturities - available for sale, at fair value
$
21,880,443
$
22,308,272
(amortized cost: 2022, $
23,408,417
; 2021, $
22,063,592
, credit allowances: 2022, $
(
42,714
)
; 2021, $
(
29,738
)
)
Fixed maturities - held to maturity, at amortized cost, net of credit allowances
 
(fair value: 2022, $
71,245
, credit allowances: 2022, $
(
366
)
)
71,390
-
Equity securities, at fair value
1,299,221
1,825,908
Short-term investments (cost: 2022, $
300,854
; 2021, $
1,178,386
)
300,840
1,178,337
Other invested assets
3,055,356
2,919,965
Cash
2,116,049
1,440,861
Total investments and cash
28,723,299
29,673,343
Accrued investment income
178,123
149,105
Premiums receivable
3,406,564
3,293,598
Reinsurance recoverables
2,096,968
2,053,354
Funds held by reinsureds
909,454
868,601
Deferred acquisition costs
836,496
872,289
Prepaid reinsurance premiums
562,550
515,445
Income taxes
336,646
2,381
Other assets
857,550
757,167
TOTAL
 
ASSETS
$
37,907,650
$
38,185,283
LIABILITIES:
Reserve for losses and loss adjustment expenses
$
19,993,054
$
19,009,486
Future policy benefit reserve
33,580
35,669
Unearned premium reserve
4,681,010
4,609,634
Funds held under reinsurance treaties
12,658
18,391
Other net payable to reinsurers
492,556
449,723
Losses in course of payment
79,549
260,684
Senior notes
2,346,495
2,345,800
Long term notes
223,824
223,774
Borrowings from FHLB
519,000
519,000
Accrued interest on debt and borrowings
16,664
17,348
Unsettled securities payable
66,150
16,698
Other liabilities
590,244
539,896
Total liabilities
29,054,784
28,046,103
Commitments and contingencies (Note 7)
(nil)
(nil)
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $
0.01
;
50,000
 
shares authorized;
 
no
 
shares issued and outstanding
-
-
Common shares, par value: $
0.01
;
200,000
 
shares authorized; (2022)
69,947
and (2021)
69,790
 
outstanding before treasury shares
700
698
Additional paid-in capital
2,283,513
2,274,431
Accumulated other comprehensive income (loss), net of deferred income
 
tax expense (benefit) of $
(208,066)
 
at 2022 and $
26,781
 
at 2021
(1,576,854)
11,523
Treasury shares, at cost;
30,529
 
shares (2022) and
30,524
 
shares (2021)
(3,848,630)
(3,847,308)
Retained earnings
11,994,137
11,699,836
Total shareholders' equity
 
8,852,866
10,139,180
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
37,907,650
$
38,185,283
The accompanying notes are an integral part of the consolidated
 
financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
EVEREST RE GROUP,
 
LTD.
CONSOLIDATED
 
STATEMENTS
 
OF OPERATIONS
 
AND COMPREHENSIVE INCOME (LOSS)
 
 
Three Months Ended
 
Six Months Ended
June 30,
June 30,
(Dollars in thousands, except per share amounts)
2022
2021
2022
2021
(unaudited)
(unaudited)
REVENUES:
Premiums earned
 
$
2,916,237
$
2,558,372
$
5,708,003
$
4,946,237
Net investment income
225,978
407,095
468,808
667,508
Net gains (losses) on investments:
Credit allowances on fixed maturity securities
(1,490)
(15,927)
(13,343)
(22,904)
Gains (losses) from fair value adjustments
(188,924)
103,525
(325,784)
132,581
Net realized gains (losses) from
 
dispositions
(45,851)
16,511
(50,765)
33,334
Total net gains
 
(losses) on investments
(236,265)
104,109
(389,892)
143,011
Other income (expense)
(71,337)
7,114
(55,977)
63,707
Total revenues
2,834,613
3,076,690
5,730,942
5,820,463
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
 
1,876,247
1,586,141
3,666,110
3,297,560
Commission, brokerage, taxes
 
and fees
630,294
557,749
1,235,523
1,046,760
Other underwriting expenses
 
169,533
140,844
330,826
283,075
Corporate expenses
15,018
16,168
29,038
28,546
Interest, fees and bond issue
 
cost amortization expense
24,398
15,607
48,476
31,246
Total claims and expenses
2,715,490
2,316,509
5,309,973
4,687,187
INCOME (LOSS) BEFORE TAXES
119,123
760,181
420,969
1,133,276
Income tax expense (benefit)
(3,507)
80,199
588
111,432
NET INCOME (LOSS)
$
122,630
$
679,982
$
420,381
$
1,021,844
Other comprehensive income (loss), net
 
of tax:
Unrealized appreciation (depreciation)
 
("URA(D)") on securities arising during the period
(732,364)
84,171
(1,547,540)
(204,444)
Reclassification adjustment for
 
realized losses (gains) included
 
in net income (loss)
15,841
1,590
20,019
(2,076)
Total URA(D) on
 
securities arising during the period
(716,523)
85,761
(1,527,521)
(206,520)
Foreign currency translation adjustments
(28,269)
34,295
(62,371)
24,713
Reclassification adjustment for
 
amortization of net (gain) loss included
 
in net income (loss)
758
2,043
1,515
4,086
Total benefit plan
 
net gain (loss) for the period
758
2,043
1,515
4,086
Total other comprehensive
 
income (loss), net of tax
(744,034)
122,099
(1,588,377)
(177,721)
COMPREHENSIVE INCOME (LOSS)
$
(621,404)
$
802,081
$
(1,167,996)
$
844,123
EARNINGS PER COMMON SHARE:
Basic
$
3.11
$
16.97
$
10.67
$
25.50
Diluted
3.11
16.95
10.67
25.47
The accompanying notes are an integral part of the consolidated
 
financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
EVEREST RE GROUP,
 
LTD.
CONSOLIDATED
 
STATEMENTS
 
OF
 
CHANGES IN SHAREHOLDERS’ EQUITY
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands, except share and dividends per share
 
amounts)
2022
2021
2022
2021
(unaudited)
(unaudited)
COMMON SHARES (shares outstanding):
Balance beginning of period
39,448,677
40,082,500
39,266,633
39,983,481
Issued (redeemed) during the period, net
(30,923)
940
156,121
197,421
Treasury shares acquired
-
(68,100)
(5,000)
(165,562)
Balance end of period
 
39,417,754
40,015,340
39,417,754
40,015,340
COMMON SHARES (par value):
Balance beginning of period
$
700
$
698
$
698
$
696
Issued during the period, net
-
-
2
2
Balance end of period
 
700
698
700
698
ADDITIONAL PAID-IN CAPITAL:
Balance beginning of period
2,271,890
2,245,737
2,274,431
2,245,301
Share-based compensation plans
11,623
10,653
9,082
11,089
Balance end of period
 
2,283,513
2,256,390
2,283,513
2,256,390
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance beginning of period
(832,820)
235,079
11,523
534,899
Net increase (decrease) during the period
(744,034)
122,099
(1,588,377)
(177,721)
Balance end of period
 
(1,576,854)
357,178
(1,576,854)
357,178
RETAINED EARNINGS:
Balance beginning of period
11,936,489
10,847,086
11,699,836
10,567,452
Net income (loss)
 
122,630
679,982
420,381
1,021,844
Dividends declared ($
1.65
 
per share in 2Q 2022 and $
3.20
 
per share YTD
in 2022; $
1.55
 
per share in 2Q 2021 and $
3.10
 
per share YTD in 2021)
(64,982)
(62,046)
(126,079)
(124,274)
Balance, end of period
11,994,137
11,465,022
11,994,137
11,465,022
TREASURY SHARES AT COST:
Balance beginning of period
(3,848,630)
(3,645,717)
(3,847,308)
(3,622,172)
Purchase of treasury shares
-
(16,782)
(1,322)
(40,327)
Balance end of period
 
(3,848,630)
(3,662,499)
(3,848,630)
(3,662,499)
TOTAL
 
SHAREHOLDERS' EQUITY, END OF PERIOD
$
8,852,866
$
10,416,789
$
8,852,866
$
10,416,789
The accompanying notes are an integral part
 
of the consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
EVEREST RE GROUP,
 
LTD.
CONSOLIDATED
 
STATEMENTS
 
OF CASH FLOWS
 
 
Six Months Ended
June 30,
(Dollars in thousands)
2022
2021
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
420,381
$
1,021,844
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable
(223,030)
(499,647)
Decrease (increase) in funds held by reinsureds, net
(51,451)
(79,485)
Decrease (increase) in reinsurance recoverables
(236,849)
15,836
Decrease (increase) in income taxes
(100,230)
76,452
Decrease (increase) in prepaid reinsurance premiums
(109,716)
(71,566)
Increase (decrease) in reserve for losses and loss adjustment expenses
1,360,076
1,139,879
Increase (decrease) in future policy benefit reserve
(2,089)
(1,226)
Increase (decrease) in unearned premiums
176,631
500,077
Increase (decrease) in other net payable to reinsurers
119,858
72,850
Increase (decrease) in losses in course of payment
(178,091)
70,653
Change in equity adjustments in limited partnerships
(156,868)
(377,120)
Distribution of limited partnership income
105,452
49,053
Change in other assets and liabilities, net
(11,031)
(206,994)
Non-cash compensation expense
 
23,919
22,439
Amortization of bond premium (accrual of bond discount)
35,052
37,928
Net (gains) losses on investments
389,892
(143,011)
Net cash provided by (used in) operating activities
1,561,906
1,627,962
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale
1,661,128
1,897,536
Proceeds from fixed maturities matured/called/repaid - held to maturity
333
-
Proceeds from fixed maturities sold - available for sale
772,148
599,737
Proceeds from equity securities sold, at fair value
437,815
474,663
Distributions from other invested assets
204,790
112,398
Cost of fixed maturities acquired - available for sale
(4,070,949)
(3,949,973)
Cost of fixed maturities acquired - held to maturity
(72,061)
-
Cost of equity securities acquired, at fair value
(283,352)
(360,016)
Cost of other invested assets acquired
(307,525)
(309,691)
Net change in short-term investments
878,360
506,285
Net change in unsettled securities transactions
22,512
(103,527)
Net cash provided by (used in) investing activities
(756,801)
(1,132,588)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued (redeemed) during the period for share-based compensation, net of expense
(14,835)
(11,349)
Purchase of treasury shares
(1,322)
(40,328)
Dividends paid to shareholders
(126,079)
(124,274)
Cost of shares withheld on settlements of share-based compensation awards
(17,352)
(13,713)
Net cash provided by (used in) financing activities
(159,588)
(189,664)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
29,671
(1,016)
Net increase (decrease) in cash
675,188
304,694
Cash, beginning of period
1,440,861
801,651
Cash, end of period
$
2,116,049
$
1,106,345
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$
100,506
$
34,780
Interest paid
 
48,414
31,695
The accompanying notes are an integral
 
part of the consolidated financial statements.
 
5
NOTES TO CONSOLIDATED
 
INTERIM FINANCIAL STATEMENTS
 
(UNAUDITED)
For the Three and Six Months Ended June 30, 2022 and 2021
1.
 
GENERAL
 
Everest
 
Re Group,
 
Ltd. (“Group”),
 
a Bermuda company,
 
through its
 
subsidiaries, principally
 
provides reinsurance
and
 
insurance
 
in
 
the
 
U.S.,
 
Bermuda
 
and
 
international
 
markets.
 
As
 
used
 
in
 
this
 
document,
 
“Company”
 
means
Group and its subsidiaries.
 
2.
 
BASIS OF PRESENTATION
The unaudited
 
consolidated
 
financial statements
 
of the
 
Company
 
as
 
of June
 
30,
 
2022 and
 
December
 
31,
 
2021
and
 
for
 
the three
 
and six
 
months
 
ended June
 
30,
 
2022 and
 
2021
 
include
 
all
 
adjustments,
 
consisting
 
of normal
recurring accruals,
 
which, in the
 
opinion of management,
 
are necessary
 
for a
 
fair statement
 
of the results
 
on an
interim basis.
 
Certain financial
 
information,
 
which is
 
normally included
 
in annual
 
financial statements
 
prepared
in accordance
 
with accounting
 
principles generally
 
accepted in
 
the United States
 
of America (“GAAP”),
 
has been
omitted
 
since
 
it
 
is
 
not
 
required
 
for
 
interim
 
reporting
 
purposes.
 
The
 
December
 
31,
 
2021
 
consolidated
 
balance
sheet data was
 
derived from audited
 
financial statements
 
but does not
 
include all disclosures
 
required by
 
GAAP.
 
The
 
results
 
for
 
the
 
three
 
and
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
and
 
2021
 
are
 
not
 
necessarily
 
indicative
 
of
 
the
results
 
for
 
a full
 
year.
 
These financial
 
statements
 
should be
 
read
 
in conjunction
 
with the
 
audited
 
consolidated
financial statements
 
and notes
 
thereto for
 
the years
 
ended December
 
31, 2021,
 
2020 and
 
2019, included
 
in the
Company’s most recent
 
Form 10-K filing.
The Company
 
consolidates
 
the results
 
of operations
 
and financial
 
position of
 
all voting
 
interest
 
entities ("VOE")
in
 
which
 
the
 
Company
 
has
 
a controlling
 
financial
 
interest
 
and
 
all
 
variable
 
interest
 
entities
 
("VIE")
 
in
 
which
 
the
Company is considered to be the primary beneficiary.
 
The consolidation assessment, including
 
the determination
as
 
to
 
whether
 
an
 
entity
 
qualifies
 
as
 
a
 
VIE
 
or
 
VOE,
 
depends
 
on
 
the
 
facts
 
and
 
circumstances
 
surrounding
 
each
entity.
 
The preparation
 
of financial
 
statements
 
in conformity
 
with GAAP
 
requires
 
management
 
to make
 
estimates
 
and
assumptions
 
that
 
affect
 
the reported
 
amounts
 
of assets
 
and liabilities
 
(and disclosure
 
of contingent
 
assets
 
and
liabilities) at the date of the financial
 
statements and the reported
 
amounts of revenues and expenses
 
during the
reporting period.
 
Ultimate actual results could differ,
 
possibly materially,
 
from those estimates.
 
All intercompany accounts
 
and transactions have been eliminated.
 
Certain
 
reclassifications
 
and
 
format
 
changes
 
have
 
been
 
made
 
to
 
prior
 
years’
 
amounts
 
to
 
conform
 
to
 
the
 
2022
presentation.
Application of Recently Issued Accounting
 
Standard Changes.
 
The Company
 
did not
 
adopt any
 
new accounting
 
standards
 
that had
 
a material
 
impact during
 
the three
 
and six
months
 
ended
 
June
 
30,
 
2022.
 
The
 
Company
 
assessed
 
the
 
adoption
 
impacts
 
of
 
recently
 
issued
 
accounting
standards
 
by the
 
Financial Accounting
 
Standards
 
Board on
 
the Company’s
 
consolidated
 
financial statements
 
as
well as
 
material updates
 
to previous
 
assessments,
 
if any,
 
from the
 
Company’s
 
Annual Report
 
on Form
 
10-K for
the year ended
 
December 31, 2021.
 
There were
 
no new material
 
accounting standards
 
issued in the
 
six months
ended June 30, 2022, that impacted Group.
Any
 
issued
 
guidance
 
and
 
pronouncements,
 
other
 
than
 
those
 
directly
 
referenced
 
above,
 
are
 
deemed
 
by
 
the
Company to be either not applicable or immaterial to
 
its financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
3.
 
INVESTMENTS
 
The
 
following
 
tables
 
show
 
amortized
 
cost,
 
allowance
 
for
 
credit
 
losses,
 
gross
 
unrealized
appreciation/(depreciation) and fair
 
value of fixed maturity securities available
 
for sale as of the dates indicated:
 
At June 30, 2022
Amortized
Allowance for
Unrealized
Unrealized
Fair
(Dollars in thousands)
Cost
Credit Losses
Appreciation
Depreciation
Value
Fixed maturity securities - available for
 
sale
U.S. Treasury securities and
 
obligations of
 
U.S. government agencies and corporations
$
1,385,608
$
-
$
7,193
$
(54,571)
$
1,338,230
Obligations of U.S. states and
 
political subdivisions
528,830
(151)
3,950
(24,348)
508,281
Corporate securities
7,505,558
(25,583)
31,650
(524,848)
6,986,777
Asset-backed securities
4,081,011
-
909
(183,241)
3,898,679
Mortgage-backed securities
Commercial
1,024,591
-
124
(72,820)
951,895
Agency residential
2,874,574
-
2,937
(186,656)
2,690,855
Non-agency residential
5,349
-
-
(208)
5,141
Foreign government securities
1,463,494
-
11,670
(115,421)
1,359,743
Foreign corporate securities
4,539,402
(16,980)
21,900
(403,480)
4,140,842
Total fixed
 
maturity securities - available for
 
sale
$
23,408,417
$
(42,714)
$
80,333
$
(1,565,593)
$
21,880,443
At December 31, 2021
Amortized
Allowance for
Unrealized
Unrealized
Fair
(Dollars in thousands)
Cost
Credit Losses
Appreciation
Depreciation
Value
Fixed maturity securities - available for
 
sale
U.S. Treasury securities and
 
obligations of
 
U.S. government agencies and corporations
$
1,407,256
$
-
$
23,720
$
(10,358)
$
1,420,618
Obligations of U.S. states and
 
political subdivisions
558,842
(151)
29,080
(1,150)
586,621
Corporate securities
7,443,535
(19,267)
195,210
(62,580)
7,556,898
Asset-backed securities
3,579,439
(7,679)
21,817
(11,848)
3,581,729
Mortgage-backed securities
Commercial
1,032,506
-
37,550
(5,690)
1,064,366
Agency residential
2,361,208
-
32,997
(18,873)
2,375,332
Non-agency residential
6,530
-
22
(16)
6,536
Foreign government securities
1,423,634
-
41,957
(28,079)
1,437,512
Foreign corporate securities
4,250,642
(2,641)
95,195
(64,536)
4,278,660
Total fixed
 
maturity securities - available for
 
sale
$
22,063,592
$
(29,738)
$
477,548
$
(203,130)
$
22,308,272
The amortized
 
cost and
 
fair value
 
of fixed
 
maturity securities
 
available for
 
sale are
 
shown in
 
the following
 
table
by
 
contractual
 
maturity.
 
Mortgage-backed
 
securities
 
are
 
generally
 
more
 
likely
 
to
 
be
 
prepaid
 
than
 
other
 
fixed
maturity securities. As the stated
 
maturity of such securities may not
 
be indicative of actual maturities, the totals
for mortgage-backed and
 
asset-backed securities
 
are shown separately.
 
 
At June 30, 2022
At December 31, 2021
Amortized
Fair
Amortized
Fair
(Dollars in thousands)
Cost
Value
Cost
Value
Fixed maturity securities – available for sale:
 
Due in one year or less
$
1,261,875
$
1,263,628
$
1,398,742
$
1,398,006
 
Due after one year through five years
7,565,293
7,187,705
7,075,077
7,154,468
 
Due after five years through ten years
4,746,315
4,285,866
5,003,792
5,100,672
 
Due after ten years
1,849,409
1,596,674
1,606,298
1,627,163
Asset-backed securities
4,081,011
3,898,679
3,579,439
3,581,729
Mortgage-backed securities:
Commercial
1,024,591
951,895
1,032,506
1,064,366
Agency residential
2,874,574
2,690,855
2,361,208
2,375,332
Non-agency residential
5,349
5,141
6,530
6,536
Total fixed maturity securities
$
23,408,417
$
21,880,443
$
22,063,592
$
22,308,272
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
During
 
the
 
second
 
quarter
 
of
 
2022,
 
the
 
Company
 
purchased
 
fixed
 
maturity
 
securities
 
classified
 
as
 
held
 
to
maturity
 
with
 
an
 
amortized
 
cost
 
of
 
$
71.8
 
million
 
and
 
a
 
fair
 
value
 
of
 
$
71.2
 
million
 
as
 
of
 
June
 
30,
 
2022.
 
Fixed
maturity securities held to maturity
 
consist of debt securities for which the
 
Company has both the positive intent
and ability
 
to hold
 
to
 
maturity or
 
redemption
 
and
 
are
 
reported
 
at
 
amortized
 
cost,
 
net of
 
the current
 
expected
credit loss
 
allowance.
 
Interest
 
income for
 
fixed
 
maturity
 
securities held
 
to maturity
 
is determined
 
in the
 
same
manner as interest income for
 
fixed maturity securities available
 
for sale.
 
These fixed maturity
 
securities held to maturity
 
are comprised of asset-backed
 
securities, with an amortized
 
cost
of $
62.8
 
million, gross
 
unrealized appreciation
 
of $
0.1
 
million, gross
 
unrealized depreciation
 
of $
0.2
 
million, and
fair
 
value
 
of
 
$
62.4
 
million,
 
and
 
corporate
 
securities,
 
with
 
an
 
amortized
 
cost
 
of
 
$
9.0
 
million,
 
unrealized
appreciation of
 
$
0.0
 
million, unrealized
 
depreciation of
 
$
0.1
 
million, and fair
 
value of
 
$
8.8
 
million, as of
 
June 30,
2022. The
 
contractual
 
maturity
 
of the
 
corporate
 
securities
 
held to
 
maturity
 
is
5 years
 
as of
 
June 30,
 
2022. The
stated maturity of asset-backed
 
securities held to maturity may not be indicative
 
of actual maturities.
The Company evaluated
 
fixed maturity
 
securities classified as
 
held to maturity
 
for current
 
expected credit
 
losses
as
 
of
 
June
 
30,
 
2022
 
utilizing
 
risk
 
characteristics
 
of
 
each
 
security,
 
including
 
credit
 
rating,
 
remaining
 
time
 
to
maturity,
 
adjusted
 
for
 
prepayment
 
considerations,
 
and
 
subordination
 
level,
 
and
 
applying
 
default
 
and
 
recovery
rates,
 
which
 
include
 
the
 
incorporation
 
of
 
historical
 
credit
 
loss
 
experience
 
and
 
macroeconomic
 
forecasts,
 
to
develop an estimate
 
of current expected
 
credit losses. These
 
fixed maturities classified
 
as held to maturity
 
are of
a
 
high
 
credit
 
quality
 
and
 
are
 
all
 
rated
 
investment
 
grade
 
as
 
of
 
June
 
30,
 
2022.
 
The
 
allowance
 
for
 
credit
 
losses
expected to be
 
recognized over
 
the remaining life
 
of the fixed
 
maturity securities classified
 
as held to maturity
 
is
$
0.4
 
million as of June 30, 2022.
The changes
 
in
 
net
 
unrealized
 
appreciation
 
(depreciation)
 
for
 
the
 
Company’s
 
available
 
for
 
sale
 
and
 
short-term
investments are derived
 
from the following sources for
 
the periods indicated:
 
 
Three Months Ended
 
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Increase (decrease) during the period between the fair value and cost
of investments carried at fair value, and deferred taxes thereon:
Fixed maturity securities - available for sale and short-term investments
$
(832,237)
$
97,127
$
(1,759,644)
$
(235,581)
Change in unrealized appreciation (depreciation), pre-tax
(832,237)
97,127
(1,759,644)
(235,581)
Deferred tax benefit (expense)
115,714
(11,366)
232,123
29,061
Change in unrealized appreciation (depreciation),
 
net of deferred taxes, included in shareholders’ equity
 
$
(716,523)
$
85,761
$
(1,527,521)
$
(206,520)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
The tables
 
below display
 
the aggregate
 
fair value
 
and gross
 
unrealized
 
depreciation
 
of fixed
 
maturity securities
available for
 
sale, by security
 
type and contractual
 
maturity,
 
in each case
 
subdivided according
 
to length
 
of time
that individual securities had been in a continuous unrealized
 
loss position for the periods indicated.
 
 
Duration of Unrealized Loss at June
 
30, 2022 By Security Type
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Unrealized
Unrealized
Unrealized
(Dollars in thousands)
Fair Value
Depreciation
Fair Value
Depreciation
Fair Value
Depreciation
Fixed maturity securities - available for
 
sale
U.S. Treasury securities and
 
obligations of
U.S. government agencies and corporations
$
949,790
$
(39,469)
$
199,364
$
(15,102)
$
1,149,154
$
(54,571)
Obligations of U.S. states and
 
political subdivisions
210,645
(21,935)
12,067
(2,366)
222,712
(24,301)
Corporate securities
4,911,170
(420,055)
779,916
(104,127)
5,691,086
(524,182)
Asset-backed securities
3,623,327
(180,189)
42,484
(3,052)
3,665,811
(183,241)
Mortgage-backed securities
Commercial
926,417
(69,573)
21,217
(3,247)
947,634
(72,820)
Agency residential
1,939,847
(116,105)
579,272
(70,551)
2,519,119
(186,656)
Non-agency residential
4,402
(188)
739
(20)
5,141
(208)
Foreign government securities
972,856
(73,986)
177,226
(41,435)
1,150,082
(115,421)
Foreign corporate securities
3,100,785
(329,255)
479,179
(73,849)
3,579,964
(403,104)
Total
$
16,639,239
$
(1,250,755)
$
2,291,464
$
(313,749)
$
18,930,703
$
(1,564,504)
Securities where an allowance for credit
 
loss was recorded
7,213
(1,089)
-
-
7,213
(1,089)
Total fixed
 
maturity securities
$
16,646,452
$
(1,251,844)
$
2,291,464
$
(313,749)
$
18,937,916
$
(1,565,593)
Duration of Unrealized Loss at June
 
30, 2022 By Maturity
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Unrealized
Unrealized
Unrealized
(Dollars in thousands)
Fair Value
Depreciation
Fair Value
Depreciation
Fair Value
Depreciation
Fixed maturity securities
 
- available for sale
Due in one year or less
$
660,642
$
(4,878)
$
90,052
$
(7,477)
$
750,694
$
(12,355)
Due in one year through five years
5,163,545
(300,876)
818,035
(79,426)
5,981,580
(380,302)
Due in five years through ten years
3,087,307
(359,536)
598,581
(114,767)
3,685,888
(474,303)
Due after ten years
1,233,752
(219,410)
141,084
(35,209)
1,374,836
(254,619)
Asset-backed securities
3,623,327
(180,189)
42,484
(3,052)
3,665,811
(183,241)
Mortgage-backed securities
2,870,666
(185,866)
601,228
(73,818)
3,471,894
(259,684)
Total
 
$
16,639,239
$
(1,250,755)
$
2,291,464
$
(313,749)
$
18,930,703
$
(1,564,504)
Securities where an allowance for credit
 
loss was recorded
7,213
(1,089)
-
-
7,213
(1,089)
Total fixed
 
maturity securities
$
16,646,452
$
(1,251,844)
$
2,291,464
$
(313,749)
$
18,937,916
$
(1,565,593)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
The aggregate
 
fair
 
value
 
and gross
 
unrealized
 
losses related
 
to
 
fixed
 
maturity
 
securities available
 
for
 
sale in
 
an
unrealized
 
loss
 
position
 
at
 
June 30,
 
2022
 
were
 
$
18.9
 
billion
 
and
 
$
1.6
 
billion,
 
respectively.
 
The
 
fair
 
value
 
of
securities for the
 
single issuer (the United
 
States government)
 
whose securities comprised
 
the largest unrealized
loss
 
position
 
at
 
June 30,
 
2022,
 
did
 
not
 
exceed
5.3
%
 
of
 
the
 
overall
 
fair
 
value
 
of
 
the
 
Company’s
 
fixed
 
maturity
securities available
 
for sale.
 
The fair
 
value of
 
the securities
 
for the
 
issuer with
 
the second
 
largest unrealized
 
loss
position at June 30,
 
2022, comprised less than
1.3
% of the Company’s
 
fixed maturity
 
securities available
 
for sale.
In addition,
 
as indicated
 
on the
 
above
 
table,
 
there
 
was
 
no significant
 
concentration
 
of unrealized
 
losses
 
in any
one market sector.
 
The $
1.3
 
billion of unrealized
 
losses related to
 
fixed maturity securities available
 
for sale that
have been in an unrealized
 
loss position for
 
less than one year were generally
 
comprised of foreign and domestic
corporate securities,
 
agency residential and
 
commercial mortgage-backed
 
securities, asset-backed
 
securities, U.S
government
 
securities and
 
foreign
 
government
 
securities.
 
Of these
 
unrealized
 
losses, $
1.1
 
billion were
 
related
to securities
 
that were
 
rated
 
investment
 
grade by
 
at least
 
one nationally
 
recognized
 
rating
 
agency.
 
The $
313.7
million of unrealized
 
losses related to
 
fixed maturity securities
 
available for sale
 
in an unrealized
 
loss position for
more
 
than
 
one
 
year
 
related
 
primarily
 
to
 
domestic
 
and
 
foreign
 
corporate
 
securities,
 
foreign
 
government
securities,
 
agency
 
residential
 
mortgage-backed
 
securities
 
and
 
U.S.
 
government
 
securities.
 
Of
 
these
 
unrealized
losses,
 
$
300.6
 
million
 
were
 
related
 
to
 
securities
 
that
 
were
 
rated
 
investment
 
grade
 
by
 
at
 
least
 
one
 
nationally
recognized
 
rating
 
agency.
 
In all
 
instances, there
 
were no
 
projected cash
 
flow shortfalls
 
to recover
 
the full
 
book
value of
 
the investments
 
and the
 
related
 
interest
 
obligations.
 
The mortgage
 
-backed
 
securities still
 
have excess
credit
 
coverage
 
and
 
are
 
current
 
on
 
interest
 
and
 
principal
 
payments.
 
Based
 
upon
 
the
 
Company’s
 
current
evaluation
 
of
 
securities
 
in
 
an
 
unrealized
 
loss
 
position
 
as
 
of
 
June
 
30,
 
2022,
 
the
 
unrealized
 
losses
 
are
 
due
 
to
changes
 
in
 
interest
 
rates
 
and
 
non-issuer
 
specific
 
credit
 
spreads
 
and
 
are
 
not
 
credit-related.
 
In
 
addition,
 
the
contractual
 
terms
 
of
 
these
 
securities
 
do
 
not
 
permit
 
these
 
securities
 
to
 
be
 
settled
 
at
 
a
 
price
 
less
 
than
 
their
amortized cost.
 
The
 
Company,
 
given
 
the
 
size
 
of
 
its
 
investment
 
portfolio
 
and
 
capital
 
position,
 
does
 
not
 
have
 
the
 
intent
 
to
 
sell
these securities; and it is more
 
likely than not that
 
the Company will not have
 
to sell the security before
 
recovery
of
 
its
 
cost
 
basis.
 
In
 
addition,
 
all
 
securities
 
currently
 
in
 
an
 
unrealized
 
loss
 
position
 
are
 
current
 
with
 
respect
 
to
principal and interest payments.
 
The tables
 
below display
 
the aggregate
 
fair value
 
and gross
 
unrealized
 
depreciation
 
of fixed
 
maturity securities
available for
 
sale, by security
 
type and contractual
 
maturity,
 
in each case
 
subdivided according
 
to length
 
of time
that
 
individual
 
securities
 
had
 
been
 
in
 
a
 
continuous
 
unrealized
 
loss
 
position
 
for
 
the
 
periods
 
indicated.
 
The
amounts presented
 
in the
 
tables below
 
include $
15.7
 
million of
 
fair value
 
and $(
0.4
) million
 
of gross
 
unrealized
depreciation
 
as
 
of
 
December
 
31,
 
2021
 
related
 
to
 
fixed
 
maturity
 
securities
 
available
 
for
 
sale
 
for
 
which
 
the
Company has recorded an allowance
 
for credit losses.
 
Duration of Unrealized Loss at December
 
31, 2021 By Security Type
 
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Unrealized
Unrealized
Unrealized
(Dollars in thousands)
Fair Value
Depreciation
Fair Value
Depreciation
Fair Value
Depreciation
Fixed maturity securities
 
- available for sale
U.S. Treasury securities and
 
obligations of
U.S. government agencies and corporations
$
504,168
$
(6,264)
$
91,735
$
(4,094)
$
595,903
$
(10,358)
Obligations of U.S. states and
 
political subdivisions
51,094
(1,038)
2,558
(112)
53,652
(1,150)
Corporate securities
2,132,576
(38,316)
472,831
(24,264)
2,605,407
(62,580)
Asset-backed securities
1,954,079
(11,180)
41,823
(668)
1,995,902
(11,848)
Mortgage-backed securities
Commercial
221,852
(2,854)
40,496
(2,836)
262,348
(5,690)
Agency residential
1,101,215
(12,178)
279,697
(6,695)
1,380,912
(18,873)
Non-agency residential
2,320
(14)
156
(2)
2,476
(16)
Foreign government securities
392,447
(9,709)
100,673
(18,370)
493,120
(28,079)
Foreign corporate securities
1,734,510
(46,247)
210,722
(18,289)
1,945,232
(64,536)
Total fixed
 
maturity securities
$
8,094,261
$
(127,800)
$
1,240,691
$
(75,330)
$
9,334,952
$
(203,130)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10
Duration of Unrealized Loss at December
 
31, 2021 By Maturity
Less than 12 months
Greater than 12 months
Total
Gross
Gross
Gross
Unrealized
Unrealized
Unrealized
(Dollars in thousands)
Fair Value
Depreciation
Fair Value
Depreciation
Fair Value
Depreciation
Fixed maturity securities - available for
 
sale
Due in one year or less
$
129,860
$
(2,415)
$
136,827
$
(11,832)
$
266,687
$
(14,247)
Due in one year through five years
2,165,467
(35,264)
446,247
(28,685)
2,611,714
(63,949)
Due in five years through ten years
1,727,823
(47,413)
244,454
(22,038)
1,972,277
(69,451)
Due after ten years
791,645
(16,482)
50,991
(2,574)
842,636
(19,056)
Asset-backed securities
1,954,079
(11,180)
41,823
(668)
1,995,902
(11,848)
Mortgage-backed securities
1,325,387
(15,046)
320,349
(9,533)
1,645,736
(24,579)
Total fixed
 
maturity securities
$
8,094,261
$
(127,800)
$
1,240,691
$
(75,330)
$
9,334,952
$
(203,130)
The
 
aggregate
 
fair
 
value
 
and
 
gross
 
unrealized
 
losses
 
related
 
to
 
investments
 
in
 
an
 
unrealized
 
loss
 
position
 
at
December 31, 2021
 
were $
9.3
 
billion and
 
$
203.1
 
million, respectively.
 
The fair
 
value of
 
securities for
 
the single
issuer
 
(the
 
United
 
States
 
government)
 
whose
 
securities
 
comprised
 
the
 
largest
 
unrealized
 
loss
 
position
 
at
December
 
31,
 
2021,
 
did
 
not
 
exceed
2.7
%
 
of
 
the
 
overall
 
fair
 
value
 
of
 
the
 
Company’s
 
fixed
 
maturity
 
securities
available for sale.
 
The fair value of the securities
 
for the issuer with the second
 
largest unrealized
 
loss comprised
less
 
than
0.5
%
 
of
 
the
 
Company’s
 
fixed
 
maturity
 
securities
 
available
 
for
 
sale.
 
In
 
addition,
 
as
 
indicated
 
on
 
the
above
 
table,
 
there was
 
no significant
 
concentration
 
of unrealized
 
losses
 
in any
 
one market
 
sector.
 
The $
127.8
million of unrealized
 
losses related
 
to fixed
 
maturity securities
 
available for
 
sale that
 
have been
 
in an unrealized
loss
 
position
 
for
 
less
 
than
 
one
 
year
 
were
 
generally
 
comprised
 
of
 
domestic
 
and
 
foreign
 
corporate
 
securities,
agency
 
residential
 
mortgage-backed
 
securities,
 
asset-backed
 
securities
 
and
 
foreign
 
government
 
securities.
 
Of
these unrealized
 
losses,
 
$
116.2
 
million were
 
related
 
to
 
securities
 
that
 
were rated
 
investment
 
grade
 
by
 
at
 
least
one
 
nationally
 
recognized
 
rating
 
agency.
 
The
 
$
75.3
 
million
 
of
 
unrealized
 
losses
 
related
 
to
 
fixed
 
maturity
securities available
 
for
 
sale in
 
an unrealized
 
loss position
 
for
 
more than
 
one year
 
related
 
primarily to
 
domestic
and
 
foreign
 
corporate
 
securities,
 
foreign
 
government
 
securities
 
and
 
agency
 
residential
 
mortgage-backed
securities.
 
Of these unrealized
 
losses, $
72.3
 
million were related
 
to securities
 
that were rated
 
investment grade
by at least one
 
nationally recognized
 
rating agency.
 
In all instances,
 
there were no projected
 
cash flow shortfalls
to
 
recover
 
the
 
full
 
book
 
value
 
of
 
the
 
investments
 
and
 
the
 
related
 
interest
 
obligations.
 
The
 
mortgage-backed
securities still have excess
 
credit coverage and are
 
current on interest and
 
principal payments.
 
The components of net investment
 
income are presented in the table
 
below for the periods indicated:
 
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Fixed maturities
$
168,769
$
148,262
$
316,995
$
289,178
Equity securities
4,600
3,493
8,746
8,331
Short-term investments and cash
6,587
773
6,746
953
Other invested assets:
Limited partnerships
47,584
239,966
136,021
354,299
Other
 
13,991
25,855
25,822
31,874
Gross investment income before
 
adjustments
241,531
418,349
494,330
684,635
Funds held interest income (expense)
772
3,287
4,457
11,253
Future policy benefit reserve income (expense)
(128)
(170)
(350)
(461)
Gross investment income
242,175
421,466
498,437
695,427
Investment expenses
(16,197)
(14,371)
(29,629)
(27,919)
Net investment income
$
225,978
$
407,095
$
468,808
$
667,508
The
 
Company
 
records
 
results
 
from
 
limited
 
partnership
 
investments
 
on
 
the
 
equity
 
method
 
of
 
accounting
 
with
changes
 
in
 
value
 
reported
 
through
 
net
 
investment
 
income.
 
The
 
net
 
investment
 
income
 
from
 
limited
partnerships is dependent
 
upon the Company’s
 
share of the net asset
 
values of interests
 
underlying each limited
partnership.
 
Due
 
to
 
the
 
timing
 
of
 
receiving
 
financial
 
information
 
from
 
these
 
partnerships,
 
the
 
results
 
are
generally
 
reported
 
on
 
a
 
one
 
month
 
or
 
quarter
 
lag.
 
If
 
the
 
Company
 
determines
 
there
 
has
 
been
 
a
 
significant
 
11
decline in value
 
of a limited
 
partnership during
 
this lag period,
 
a loss will
 
be recorded
 
in the period
 
in which the
Company identifies the decline.
 
The Company had
 
contractual commitments
 
to invest
 
up to an additional
 
$
2.4
 
billion in limited partnerships
 
and
private
 
placement
 
loan
 
securities
 
at
 
June
 
30,
 
2022.
 
These
 
commitments
 
will
 
be
 
funded
 
when
 
called
 
in
accordance
 
with
 
the
 
partnership
 
and
 
loan
 
agreements,
 
which
 
have
 
investment
 
periods
 
that
 
expire,
 
unless
extended, through
2026
.
 
The Company
 
participates in
 
a private
 
placement liquidity
 
sweep facility
 
(“the facility”).
 
The primary purpose
 
of
the
 
facility
 
is
 
to
 
enhance
 
the
 
Company’s
 
return
 
on
 
its
 
short-term
 
investments
 
and
 
cash
 
positions.
 
The
 
facility
invests
 
in
 
high
 
quality,
 
short-duration
 
securities
 
and
 
permits
 
daily
 
liquidity.
 
The
 
Company
 
consolidates
 
its
participation in
 
the facility.
 
As of
 
June 30,
 
2022, the
 
fair value
 
of investments
 
in the
 
facility consolidated
 
within
the Company’s balance sheets
 
was $
377.7
 
million.
 
Variable Interest
 
Entities
The
 
Company
 
is
 
engaged
 
with
 
various
 
special
 
purpose
 
entities
 
and
 
other
 
entities
 
that
 
are
 
deemed
 
to
 
be
 
VIEs
primarily
 
as
 
an
 
investor
 
through
 
normal
 
investment
 
activities
 
but
 
also
 
as
 
an
 
investment
 
manager.
 
A
 
VIE
 
is
 
an
entity that
 
either has
 
investors
 
that lack
 
certain essential
 
characteristics
 
of a
 
controlling
 
financial interest,
 
such
as simple
 
majority kick-out
 
rights, or
 
lacks sufficient
 
funds to
 
finance its
 
own activities
 
without financial
 
support
provided
 
by
 
other
 
entities.
 
The
 
Company
 
performs
 
ongoing
 
qualitative
 
assessments
 
of
 
its
 
VIEs
 
to
 
determine
whether the Company has
 
a controlling financial interest
 
in the VIE and therefore
 
is the primary beneficiary.
 
The
Company
 
is
 
deemed to
 
have
 
a
 
controlling
 
financial
 
interest
 
when
 
it
 
has
 
both
 
the
 
ability to
 
direct
 
the
 
activities
that most
 
significantly impact
 
the economic
 
performance of
 
the VIE
 
and the
 
obligation to
 
absorb losses
 
or right
to
 
receive
 
benefits
 
from
 
the
 
VIE
 
that
 
could
 
potentially
 
be
 
significant
 
to
 
the
 
VIE.
 
Based
 
on
 
the
 
Company’s
assessment,
 
if it
 
determines
 
it
 
is
 
the
 
primary
 
beneficiary,
 
the
 
Company
 
consolidates
 
the
 
VIE
 
in
 
the
 
Company’s
Consolidated Financial
 
Statements.
 
As of June
 
30, 2022 and
 
December 31, 2021, the
 
Company did
no
t hold any
securities for which it is the primary beneficiary.
The
 
Company,
 
through
 
normal
 
investment
 
activities,
 
makes
 
passive
 
investments
 
in
 
general
 
and
 
limited
partnerships
 
and other
 
alternative
 
investments.
 
For these
 
non-consolidated
 
VIEs, the
 
Company has
 
determined
it is not the
 
primary beneficiary as
 
it has no ability
 
to direct activities
 
that could significantly
 
affect the economic
performance
 
of
 
the
 
investments.
 
The
 
Company’s
 
maximum
 
exposure
 
to
 
loss
 
as
 
of
 
June
 
30,
 
2022
 
and
December 31, 2021
 
is limited
 
to the
 
total
 
carrying value
 
of $
3.1
 
billion and
 
$
2.9
 
billion,
 
respectively,
 
which are
included in
 
general
 
and limited
 
partnerships
 
and
 
other alternative
 
investments
 
in Other
 
Invested
 
Assets
 
in the
Company's
 
Consolidated
 
Balance
 
Sheets.
 
As
 
of
 
June
 
30,
 
2022,
 
the
 
Company
 
has
 
outstanding
 
commitments
totaling
 
$
2.2
 
billion
 
whereby
 
the
 
Company
 
is
 
committed
 
to
 
fund
 
these
 
investments
 
and
 
may
 
be
 
called
 
by
 
the
partnership during
 
the commitment period
 
to fund
 
the purchase
 
of new investments
 
and partnership
 
expenses.
 
These
 
investments
 
are
 
generally
 
of
 
a
 
passive
 
nature
 
in
 
that
 
the
 
Company
 
does
 
not
 
take
 
an
 
active
 
role
 
in
management.
In
 
addition,
 
the
 
Company
 
makes
 
passive
 
investments
 
in
 
structured
 
securities
 
issued
 
by
 
VIEs
 
for
 
which
 
the
Company
 
is
 
not
 
the
 
manager.
 
These
 
investments
 
are
 
included
 
in
 
asset-backed
 
securities,
 
which
 
includes
collateralized loan
 
obligations and are
 
reported in fixed
 
maturities, available
 
-for-sale and fixed
 
maturities held to
maturity.
 
The
 
Company
 
has
 
not
 
provided
 
financial
 
or
 
other
 
support
 
with
 
respect
 
to
 
these
 
investments
 
other
than its
 
original investment.
 
For these
 
investments,
 
the Company
 
determined
 
it is
 
not the
 
primary beneficiary
due
 
to
 
the
 
relative
 
size
 
of the
 
Company’s
 
investment
 
in
 
comparison
 
to
 
the principal
 
amount
 
of the
 
structured
securities issued by the
 
VIEs, the level of
 
credit subordination
 
which reduces the Company’s
 
obligation to absorb
losses
 
or
 
right
 
to
 
receive
 
benefits
 
and
 
the
 
Company’s
 
inability
 
to
 
direct
 
the
 
activities
 
that
 
most
 
significantly
impact the economic performance
 
of the VIEs.
 
The Company’s
 
maximum exposure
 
to loss on
 
these investments
is limited to the amount of the Company’s
 
investment.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
The components of net gains (losses) on investments
 
are presented in the tables below for
 
the periods indicated:
 
 
Three Months Ended
 
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Fixed maturity securities:
Allowance for credit losses
$
(1,490)
$
(15,927)
$
(13,343)
$
(22,904)
Net realized gains (losses) from dispositions
(15,560)
10,060
(12,761)
19,234
Equity securities, fair value:
Net realized gains (losses) from dispositions
(30,926)
3,755
(42,713)
9,993
Gains (losses) from fair value adjustments
(188,924)
103,525
(325,784)
132,581
Other invested assets
583
2,748
4,735
4,094
Short-term investments gain (loss)
52
(52)
(26)
13
Total net gains (losses) on investments
$
(236,265)
$
104,109
$
(389,892)
$
143,011
(Some amounts may not reconcile due to rounding.)
Roll Forward of Allowance for Credit Losses – Fixed maturities, available for sale
Three Months Ended June 30, 2022
Six Months Ended June 30, 2022
Obligations of
Obligations of
U.S. States
Foreign
U.S. States
Foreign
Corporate
Asset-Backed
and Political
Corporate
Corporate
Asset-Backed
and Political
Corporate
Securities
Securities
Subdivisions
Securities
Total
Securities
Securities
Subdivisions
Securities
Total
(Dollars in thousands)
Beginning Balance
$
(20,049)
$
(7,679)
$
(151)
$
(13,712)
$
(41,591)
$
(19,267)
$
(7,679)
$
(151)
$
(2,641)
$
(29,738)
Credit losses on securities where credit
losses were not previously recorded
(4,887)
-
-
(4,706)
(9,593)
(6,816)
-
-
(15,890)
(22,706)
Increases in allowance on previously
impaired securities
(654)
-
-
(732)
(1,386)
(654)
-
-
(732)
(1,386)
Decreases in allowance on previously
 
impaired securities
-
-
-
-
-
-
-
-
-
-
Reduction in allowance due to disposals
7
7,679
-
2,170
9,856
1,154
7,679
-
2,283
11,116
Balance as of June 30, 2022
$
(25,583)
$
-
$
(151)
$
(16,980)
$
(42,714)
$
(25,583)
$
-
$
(151)
$
(16,980)
$
(42,714)
Roll Forward of Allowance for Credit Losses – Fixed maturities,
 
available for sale
Three Months Ended June 30, 2021
Six Months Ended June 30, 2021
Foreign
Foreign
Foreign
Corporate
Asset-Backed
Corporate
Corporate
Asset-Backed
Government
Corporate
Securities
Securities
Securities
Total
Securities
Securities
Securities
Securities
Total
(Dollars in thousands)
Beginning Balance
$
(3,603)
$
(4,915)
$
(205)
$
(8,723)
$
(1,220)
$
-
$
(22)
$
(503)
$
(1,745)
Credit losses on securities where credit
losses were not previously recorded
(13,537)
-
(1,055)
(14,592)
(15,920)
(4,915)
-
(1,055)
(21,890)
Increases in allowance on previously
impaired securities
(1,468)
-
-
(1,468)
(1,468)
-
-
-
(1,468)
Decreases in allowance on previously
 
impaired securities
-
-
-
-
-
-
-
-
-
Reduction in allowance due to disposals
133
-
-
133
133
-
22
298
453
Balance as of June 30, 2021
$
(18,475)
$
(4,915)
$
(1,260)
$
(24,650)
$
(18,475)
$
(4,915)
$
-
$
(1,260)
$
(24,650)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13
The proceeds
 
and split
 
between gross
 
gains and
 
losses from
 
dispositions of
 
fixed maturity
 
and equity
 
securities,
are presented in the table below
 
for the periods indicated:
 
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Proceeds from sales of fixed maturity securities, available for sale
$
353,160
$
371,459
$
772,148
$
599,737
Gross gains from dispositions
7,456
19,870
27,578
34,734
Gross losses from dispositions
(23,016)
(9,810)
(40,339)
(15,500)
Proceeds from sales of equity securities
$
347,714
$
193,350
$
437,815
$
474,663
Gross gains from dispositions
4,135
5,803
7,643
18,107
Gross losses from dispositions
(35,061)
(2,048)
(50,356)
(8,114)
4.
 
RESERVE FOR LOSSES, LAE AND FUTURE
 
POLICY BENEFIT RESERVE
 
Activity in the reserve for losses and LAE is summarized
 
for the periods indicated:
 
 
Six Months Ended
 
June 30,
(Dollars in thousands)
2022
2021
Gross reserves beginning of period
$
19,009,486
$
16,322,143
 
Less reinsurance recoverables on unpaid losses
(1,946,365)
(1,843,691)
 
Net reserves beginning of period
17,063,121
14,478,452
Incurred related to:
 
Current year
3,667,769
3,302,013
 
Prior years
(1,659)
(4,453)
 
Total incurred losses and LAE
3,666,110
3,297,560
Paid related to:
 
Current year
 
978,599
710,677
 
Prior years
1,483,844
1,399,579
 
Total paid losses and LAE
2,462,443
2,110,256
Foreign exchange/translation adjustment
(259,484)
35,651
Net reserves end of period
18,007,304
15,701,407
 
Plus reinsurance recoverables on unpaid losses
1,985,750
1,862,760
 
Gross reserves end of period
$
19,993,054
$
17,564,167
(Some amounts may not reconcile due
 
to rounding.)
Current year
 
incurred losses
 
were $
3.7
 
billion and $
3.3
 
billion for the
 
six months ended
 
June 30, 2022
 
and 2021,
respectively.
 
Gross and net
 
reserves increased
 
for the six
 
months ended June
 
30, 2022, reflecting
 
an increase
 
in
underlying
 
exposure
 
due
 
to premium
 
growth
 
and
 
the
 
impact
 
of $
45.0
 
million
 
of incurred
 
losses
 
related
 
to
 
the
Ukraine/Russia war,
 
partially offset by a reduction of $
115.0
 
million in current year catastrophe
 
losses.
 
The war in
 
the Ukraine
 
is ongoing
 
and an evolving
 
event. Economic
 
and legal
 
sanctions have
 
been levied against
Russia,
 
specific
 
named
 
individuals
 
and
 
entities
 
connected
 
to
 
the
 
Russian
 
government,
 
as
 
well
 
as
 
businesses
located
 
in
 
the
 
Russian
 
Federation
 
and/or
 
owned
 
by
 
Russian
 
nationals
 
by
 
numerous
 
countries,
 
including
 
the
United States.
 
The significant
 
political and
 
economic uncertainty
 
surrounding
 
the war
 
and associated
 
sanctions
have
 
impacted
 
economic and
 
investment
 
markets
 
both within
 
Russia and
 
around
 
the world.
 
The Company
 
has
recorded
 
$
45.0
 
million
 
of incurred
 
underwriting
 
losses
 
related
 
to
 
the
 
Ukraine/Russia
 
war for
 
the
 
three
 
and
 
six
months ended June 30, 2022.
 
14
5.
 
FAIR VALUE
 
GAAP guidance
 
regarding
 
fair
 
value
 
measurements
 
addresses
 
how
 
companies
 
should
 
measure
 
fair
 
value
 
when
they are
 
required to
 
use fair
 
value measures
 
for recognition
 
or disclosure
 
purposes under
 
GAAP and
 
provides
 
a
common
 
definition
 
of fair
 
value
 
to
 
be used
 
throughout
 
GAAP.
 
It
 
defines
 
fair
 
value
 
as
 
the
 
price that
 
would
 
be
received
 
to
 
sell an
 
asset
 
or paid
 
to
 
transfer
 
a liability
 
in an
 
orderly
 
fashion
 
between market
 
participants
 
at the
measurement
 
date.
 
In
 
addition,
 
it
 
establishes
 
a
 
three-level
 
valuation
 
hierarchy
 
for
 
the
 
disclosure
 
of fair
 
value
measurements.
 
The valuation
 
hierarchy
 
is based
 
on the
 
transparency
 
of inputs
 
to
 
the valuation
 
of an
 
asset or
liability.
 
The level in the
 
hierarchy within
 
which a given fair
 
value measurement
 
falls is determined
 
based on the
lowest
 
level
 
input
 
that
 
is
 
significant
 
to
 
the
 
measurement,
 
with
 
Level
 
1
 
being
 
the
 
highest
 
priority
 
and
 
Level
 
3
being the lowest priority.
 
The levels in the hierarchy
 
are defined as follows:
Level 1:
 
Inputs
 
to
 
the valuation
 
methodology
 
are
 
observable
 
inputs that
 
reflect unadjusted
 
quoted
 
prices for
identical assets or liabilities in an active market;
Level 2:
 
Inputs
 
to
 
the
 
valuation
 
methodology
 
include
 
quoted
 
prices
 
for
 
similar
 
assets
 
and
 
liabilities
 
in
 
active
markets,
 
and
 
inputs
 
that
 
are
 
observable
 
for
 
the
 
asset
 
or
 
liability,
 
either
 
directly
 
or
 
indirectly,
 
for
substantially the full term of the financial instrument;
Level 3:
 
Inputs to the valuation methodology are
 
unobservable and significant to the fair
 
value measurement.
The
 
Company’s
 
fixed
 
maturity
 
and
 
equity
 
securities
 
are
 
primarily
 
managed
 
by
 
third
 
party
 
investment
 
asset
managers.
 
The
 
investment
 
asset
 
managers
 
managing
 
publicly
 
traded
 
securities
 
obtain
 
prices
 
from
 
nationally
recognized
 
pricing
 
services.
 
These
 
services
 
seek
 
to
 
utilize
 
market
 
data
 
and
 
observations
 
in
 
their
 
evaluation
process.
 
They use pricing
 
applications that
 
vary by asset
 
class and incorporate
 
available market
 
information and
when fixed
 
maturity securities
 
do not trade
 
on a daily
 
basis the services
 
will apply available
 
information through
processes
 
such
 
as
 
benchmark
 
curves,
 
benchmarking
 
of
 
like
 
securities,
 
sector
 
groupings
 
and
 
matrix
 
pricing.
 
In
addition,
 
they
 
use
 
model
 
processes,
 
such
 
as
 
the
 
Option
 
Adjusted
 
Spread
 
model
 
to
 
develop
 
prepayment
 
and
interest rate scenarios
 
for securities that have
 
prepayment features.
 
The investment
 
asset managers
 
do not
 
make any
 
changes to
 
prices received
 
from either
 
the pricing
 
services or
the
 
investment
 
brokers.
 
In
 
addition,
 
the
 
investment
 
asset
 
managers
 
have
 
procedures
 
in
 
place
 
to
 
review
 
the
reasonableness
 
of
 
the
 
prices
 
from
 
the
 
service
 
providers
 
and
 
may
 
request
 
verification
 
of
 
the
 
prices.
 
The
Company
 
also
 
continually
 
performs
 
quantitative
 
and
 
qualitative
 
analysis
 
of prices,
 
including
 
but
 
not
 
limited
 
to
initial
 
and
 
ongoing
 
review
 
of
 
pricing
 
methodologies,
 
review
 
of
 
prices
 
obtained
 
from
 
pricing
 
services
 
and
 
third
party
 
investment
 
asset
 
managers,
 
review
 
of
 
pricing
 
statistics
 
and
 
trends,
 
and
 
comparison
 
of
 
prices
 
for
 
certain
securities
 
with
 
a
 
secondary
 
price
 
source
 
for
 
reasonableness.
 
No
 
material
 
variances
 
were
 
noted
 
during
 
these
price validation
 
procedures.
 
In limited
 
situations,
 
where financial
 
markets
 
are inactive
 
or illiquid,
 
the Company
may use
 
its own
 
assumptions
 
about future
 
cash flows
 
and risk-adjusted
 
discount
 
rates
 
to determine
 
fair value.
 
At
 
June
 
30,
 
2022,
 
$
2.2
 
billion
 
of
 
fixed
 
maturities
 
were
 
fair
 
valued
 
using
 
unobservable
 
inputs.
 
The
 
majority
 
of
these fixed maturities were
 
valued by investment
 
managers’ valuation
 
committees and many
 
of these fair values
were
 
substantiated
 
by
 
valuations
 
from
 
independent
 
third
 
parties.
 
The
 
Company
 
has
 
procedures
 
in
 
place
 
to
evaluate
 
these independent
 
third party
 
valuations.
 
At December
 
31, 2021,
 
$
2.1
 
billion of
 
fixed maturities
 
were
fair valued using unobservable inputs.
 
The Company internally
 
manages a public equity
 
portfolio which had
 
a fair value at
 
June 30, 2022 and
 
December
31, 2021 of $
896.9
 
million and $
1.3
 
billion, respectively.
 
During the fourth
 
quarter of 2021,
 
the Company
 
began
to
 
internally
 
manage
 
a
 
portfolio
 
of collateralized
 
loan
 
obligations
 
included
 
in
 
asset-backed
 
securities,
 
available
for
 
sale,
 
which
 
had
 
a
 
fair
 
value
 
of
 
$
2.1
 
billion
 
and
 
$
2.0
 
billion
 
at
 
June
 
30,
 
2022
 
and
 
December
 
31,
 
2021,
respectively.
 
All
 
prices
 
for
 
these
 
securities
 
were
 
obtained
 
from
 
publicly
 
published
 
sources
 
or
 
nationally
recognized pricing vendors.
 
15
Equity
 
securities
 
denominated
 
in
 
U.S.
 
currency
 
with
 
quoted
 
prices
 
in
 
active
 
markets
 
for
 
identical
 
assets
 
are
categorized
 
as
 
Level
 
1
 
since
 
the
 
quoted
 
prices
 
are
 
directly
 
observable.
 
Equity
 
securities
 
traded
 
on
 
foreign
exchanges are
 
categorized as
 
Level 2 due to
 
the added input of
 
a foreign exchange
 
conversion
 
rate to determine
fair value.
 
The Company uses foreign currency exchange
 
rates published by national
 
ly recognized sources.
 
Fixed maturity
 
securities listed in
 
the tables have
 
been categorized
 
as Level 2, since
 
a particular security may
 
not
have
 
traded
 
but
 
the
 
pricing
 
services
 
are
 
able
 
to
 
use
 
valuation
 
models
 
with
 
observable
 
market
 
inputs
 
such
 
as
interest rate yield
 
curves and prices for similar fixed
 
maturity securities in terms of issuer,
 
maturity and seniority.
 
For
 
foreign
 
government
 
securities
 
and
 
foreign
 
corporate
 
securities,
 
the
 
fair
 
values
 
provided
 
by
 
the
 
third
 
party
pricing services
 
in local
 
currencies, and
 
where applicable,
 
are converted
 
to U.S.
 
dollars using
 
currency exchange
rates from nationally recognized
 
sources.
 
In
 
addition
 
to
 
the
 
valuations
 
from
 
investment
 
managers,
 
some
 
of
 
the
 
fixed
 
maturities
 
with
 
fair
 
values
categorized
 
as
 
Level
 
3 result
 
when
 
prices
 
are
 
not
 
available
 
from
 
the
 
nationally
 
recognized
 
pricing
 
services
 
and
are
 
derived
 
using
 
unobservable
 
inputs.
 
The
 
Company
 
will
 
value
 
the
 
securities
 
with
 
unobservable
 
inputs
 
using
comparable
 
market
 
information
 
or
 
receive
 
fair
 
values
 
from
 
investment
 
managers.
 
The
 
investment
 
managers
may obtain
 
non-binding price
 
quotes for
 
the securities
 
from brokers.
 
The single
 
broker
 
quotes are
 
provided by
market
 
makers
 
or
 
broker-dealers
 
who
 
are
 
recognized
 
as
 
market
 
participants
 
in
 
the
 
markets
 
in
 
which
 
they
 
are
providing the quotes.
 
The prices received from
 
brokers are
 
reviewed for
 
reasonableness by the
 
third party asset
managers
 
and
 
the
 
Company.
 
If
 
the
 
broker
 
quotes
 
are
 
for
 
foreign
 
denominated
 
securities,
 
the
 
quotes
 
are
converted to U.S. dollars
 
using currency exchange rates
 
from nationally recognized
 
sources.
 
The composition
 
and
 
valuation
 
inputs
 
for
 
the
 
presented
 
fixed
 
maturities
 
categories
 
Level
 
1 and
 
Level
 
2
 
are
 
as
follows:
U.S.
 
Treasury
 
securities
 
and
 
obligations
 
of
 
U.S.
 
government
 
agencies
 
and
 
corporations
 
are
 
primarily
comprised
 
of U.S.
 
Treasury
 
bonds
 
and the
 
fair
 
value
 
is based
 
on observable
 
market
 
inputs
 
such as
 
quoted
prices, reported trades, quoted
 
prices for similar issuances or benchmark yields;
 
Obligations of U.S.
 
states and political
 
subdivisions are comprised
 
of state and municipal
 
bond issuances and
the
 
fair
 
values
 
are
 
based
 
on
 
observable
 
market
 
inputs
 
such
 
as
 
quoted
 
market
 
prices,
 
quoted
 
prices
 
for
similar securities, benchmark yields and credit spreads;
Corporate securities
 
are primarily
 
comprised of U.S.
 
corporate
 
and public
 
utility bond issuances
 
and the fair
values
 
are
 
based
 
on
 
observable
 
market
 
inputs
 
such
 
as
 
quoted
 
market
 
prices,
 
quoted
 
prices
 
for
 
similar
securities, benchmark yields and credit spreads;
 
Asset-backed
 
and
 
mortgage-backed
 
securities
 
fair
 
values
 
are
 
based
 
on
 
observable
 
inputs
 
such
 
as
 
quoted
prices, reported
 
trades, quoted
 
prices for
 
similar issuances
 
or benchmark yields
 
and cash flow
 
models using
observable inputs such as prepayment speeds,
 
collateral performance and default
 
spreads;
Foreign
 
government
 
securities
 
are
 
comprised
 
of
 
global
 
non-U.S.
 
sovereign
 
bond
 
issuances
 
and
 
the
 
fair
values
 
are
 
based
 
on
 
observable
 
market
 
inputs
 
such
 
as
 
quoted
 
market
 
prices,
 
quoted
 
prices
 
for
 
similar
securities and
 
models with observable
 
inputs such
 
as benchmark
 
yields and
 
credit spreads
 
and then,
 
where
applicable, converted to U.S.
 
dollars using an exchange rate
 
from a nationally recognized
 
source;
Foreign corporate
 
securities are
 
comprised of
 
global non-U.S.
 
corporate
 
bond issuances
 
and the
 
fair values
are
 
based
 
on
 
observable
 
market
 
inputs
 
such
 
as
 
quoted
 
market
 
prices,
 
quoted
 
prices
 
for
 
similar
 
securities
and models with observable inputs
 
such as benchmark yields and
 
credit spreads and then, where
 
applicable,
converted to U.S. dollars
 
using an exchange rate
 
from a nationally recognized
 
source.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16
The following
 
tables present
 
the fair
 
value measurement
 
levels for
 
all assets
 
and liabilities,
 
which the
 
Company
has recorded at fair value
 
as of the periods indicated:
Fair Value Measurement Using:
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Dollars in thousands)
June 30, 2022
(Level 1)
(Level 2)
(Level 3)
Assets:
Fixed maturities, available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations
$
1,338,230
$
-
$
1,338,230
$
-
Obligations of U.S. States and political subdivisions
508,281
-
508,281
-
Corporate securities
6,986,777
-
6,124,350
862,427
Asset-backed securities
3,898,679
-
2,643,282
1,255,397
Mortgage-backed securities
Commercial
951,895
-
946,204
5,691
Agency residential
2,690,855
-
2,690,855
-
Non-agency residential
5,141
-
5,141
-
Foreign government securities
1,359,743
-
1,359,743
-
Foreign corporate securities
4,140,842
-
4,100,881
39,961
Total fixed maturities, available for sale
21,880,443
-
19,716,967
2,163,476
Equity securities, fair value
1,299,221
1,226,921
72,300
-
Fair Value Measurement Using:
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Dollars in thousands)
December 31, 2021
(Level 1)
(Level 2)
(Level 3)
Assets:
Fixed maturities, available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations
$
1,420,618
$
-
$
1,420,618
$
-
Obligations of U.S. States and political subdivisions
586,621
-
586,621
-
Corporate securities
7,556,898
-
6,756,324
800,574
Asset-backed securities
3,581,729
-
2,330,448
1,251,281
Mortgage-backed securities
Commercial
1,064,366
-
1,064,366
-
Agency residential
2,375,332
-
2,375,332
-
Non-agency residential
6,536
-
6,536
-
Foreign government securities
1,437,512
-
1,437,512
-
Foreign corporate securities
4,278,660
-
4,262,645
16,015
Total fixed maturities, available for sale
22,308,272
-
20,240,402
2,067,870
Equity securities, fair value
1,825,908
1,742,367
83,541
-
In addition,
 
$
297.2
 
million and
 
$
286.6
 
million
 
of investments
 
within other
 
invested
 
assets
 
on the
 
consolidated
balance sheets
 
as of
 
June 30,
 
2022 and
 
December 31,
 
2021, respectively,
 
are not
 
included within
 
the fair
 
value
hierarchy tables as
 
the assets are measured at NAV
 
as a practical expedient to determine
 
fair value.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17
The following
 
table presents
 
the activity
 
under Level
 
3, fair
 
value measurements
 
using significant
 
unobservable
inputs for fixed maturities available
 
for sale, for the periods indicated:
 
Total Fixed Maturities,
 
Available for Sale
Three Months Ended June 30, 2022
Six Months Ended June 30, 2022
Corporate
Asset-Backed
Foreign
Corporate
Asset-Backed
Foreign
(Dollars in thousands)
Securities
Securities
CMBS
Corporate
Total
Securities
Securities
CMBS
Corporate
Total
Beginning balance fixed maturities
$
714,656
$
1,388,691
$
5,890
$
15,926
$
2,125,163
$
800,574
$
1,251,281
$
-
$
16,015
$
2,067,870
Total gains or (losses) (realized/unrealized)
Included in earnings
(4,534)
35
-
16
(4,483)
11,409
137
-
29
11,575
Included in other comprehensive income (loss)
(3,003)
(47,202)
(199)
(3,747)
(54,151)
(7,170)
(75,990)
(222)
(3,808)
(87,190)
Purchases, issuances and settlements
27,750
61,565
-
7,632
96,947
(69,944)
227,661
5,913
7,591
171,221
Transfers in/(out) of Level
 
3 and reclassification of
securities in/(out) of investment categories
127,558
(147,692)
-
20,134
-
127,558
(147,692)
-
20,134
-
Ending balance
$
862,427
$
1,255,397
$
5,691
$
39,961
$
2,163,476
$
862,427
$
1,255,397
$
5,691
$
39,961
$
2,163,476
The amount of total gains or losses for the period
included in earnings (or changes in net assets)
attributable to the change in unrealized gains
 
or losses relating to assets still held
 
at the reporting date
$
(5,261)
$
7,679
$
-
$
-
$
2,418
$
(4,943)
$
7,679
$
-
$
-
$
2,736
(Some amounts may not reconcile due to rounding.)
Total Fixed Maturities,
 
Available for Sale
Three Months Ended June 30, 2021
Six Months Ended June 30, 2021
Corporate
Asset-Backed
Foreign
Corporate
Asset-Backed
Foreign
(Dollars in thousands)
Securities
Securities
Corporate
Total
Securities
Securities
Corporate
Total
Beginning balance fixed maturities
$
704,542
$
785,360
$
5,598
$
1,495,500
$
701,492
$
623,033
$
5,699
$
1,330,224
Total gains or (losses) (realized/unrealized)
Included in earnings
(13,761)
206
137
(13,418)
(15,550)
(3,962)
140
(19,372)
Included in other comprehensive income (loss)
4,582
7,610
(85)
12,107
7,418
4,475
(36)
11,857
Purchases, issuances and settlements
10,208
22,100
(763)
31,545
12,211
191,730
(916)
203,025
Transfers in/(out) of Level
 
3 and reclassification of
securities in/(out) of investment categories
-
-
-
-
-
-
-
-
Ending balance
$
705,571
$
815,276
$
4,887
$
1,525,734
$
705,571
$
815,276
$
4,887
$
1,525,734
The amount of total gains or losses for the period
included in earnings (or changes in net assets)
attributable to the change in unrealized gains
 
or losses relating to assets still held
 
at the reporting date
$
(17,279)
$
(4,915)
$
-
$
(22,194)
$
(17,279)
$
(4,915)
$
-
$
(22,194)
(Some amounts may not reconcile due to rounding.)
The
 
Company’s
 
fixed
 
maturity
 
securities
 
held
 
to
 
maturity
 
are
 
recorded
 
at
 
amortized
 
cost,
 
net
 
of
 
credit
allowances,
 
with a
 
carrying value
 
of $
71.4
 
million and
 
a fair
 
value of
 
$
71.2
 
million as
 
of June
 
30, 2022.
 
The fair
values
 
of
 
these
 
securities
 
are
 
determined
 
in
 
a
 
similar
 
manner
 
as
 
the
 
Company’s
 
fixed
 
maturity
 
securities
available
 
for
 
sale
 
as
 
described
 
above.
 
The
 
fair
 
values
 
of
 
these
 
securities
 
incorporate
 
the
 
use
 
of
 
significant
unobservable inputs and therefore
 
are classified as Level 3 within the fair
 
value hierarchy as
 
of June 30, 2022.
6.
 
EARNINGS PER COMMON SHARE
Basic
 
earnings
 
per
 
share
 
are
 
calculated
 
by
 
dividing
 
net
 
income
 
by
 
the
 
weighted
 
average
 
number
 
of
 
common
shares outstanding.
 
Diluted earnings per
 
share reflect
 
the potential
 
dilution that
 
would occur if
 
options granted
under various
 
share-based compensation
 
plans were
 
exercised
 
resulting in
 
the issuance
 
of common
 
shares that
would participate in the earnings of the entity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18
Net income
 
(loss) per
 
common share
 
has been
 
computed as
 
per below,
 
based upon
 
weighted average
 
common
basic and dilutive shares outstanding.
 
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands, except per share amounts)
2022
2021
2022
2021
Net income (loss) per share:
Numerator
Net income (loss)
 
$
122,630
$
679,982
$
420,381
$
1,021,844
Less:
 
dividends declared-common shares and unvested
 
common shares
(64,982)
(62,045)
(126,079)
(124,274)
Undistributed earnings
57,648
617,937
294,302
897,570
Percentage allocated to
 
common shareholders (1)
98.6
%
98.6
%
98.7
%
98.7
%
56,870
609,411
290,356
885,595
Add:
 
dividends declared-common shareholders
64,184
61,245
124,466
122,659
Numerator for basic and diluted
 
earnings per common share
$
121,054
$
670,656
$
414,822
$
1,008,254
Denominator
Denominator for basic earnings per weighted
 
-average common shares
38,898
39,527
38,861
39,535
Effect of dilutive securities:
 
 
 
 
Options
-
41
7
48
Denominator for diluted earnings per adjusted
 
weighted-average common shares
38,898
39,567
38,867
39,582
Per common share net income (loss)
Basic
$
3.11
$
16.97
$
10.67
$
25.50
Diluted
$
3.11
$
16.95
$
10.67
$
25.47
(1)
Basic weighted-average common shares outstanding
38,898
39,527
38,861
39,535
Basic weighted-average common shares outstanding and unvested common shares expected to vest
39,430
40,080
39,389
40,069
Percentage allocated to common shareholders
98.6
%
98.6
%
98.7
%
98.7
%
(Some amounts may not reconcile due to rounding.)
There were
no
 
anti-diluted options outstanding
 
for the three and six months ended June 30, 2022 and 2021.
 
All outstanding options granted
 
under share-based compensation
 
plans expire on
September 19, 2022
.
 
7.
 
COMMITMENTS AND CONTINGENCIES
In
 
the
 
ordinary
 
course
 
of
 
business,
 
the
 
Company
 
is
 
involved
 
in
 
lawsuits,
 
arbitrations
 
and
 
other
 
formal
 
and
informal
 
dispute
 
resolution
 
procedures,
 
the
 
outcomes
 
of
 
which
 
will
 
determine
 
the
 
Company’s
 
rights
 
and
obligations
 
under insurance
 
and reinsurance
 
agreements.
 
In some
 
disputes,
 
the Company
 
seeks
 
to
 
enforce
 
its
rights under an agreement or to
 
collect funds owing to it.
 
In other matters, the Company
 
is resisting attempts by
others
 
to
 
collect
 
funds
 
or
 
enforce
 
alleged
 
rights.
 
These
 
disputes
 
arise
 
from
 
time
 
to
 
time
 
and
 
are
 
ultimately
resolved through
 
both informal
 
and formal
 
means, including
 
negotiated resolution,
 
arbitration and
 
litigation.
 
In
all such matters,
 
the Company believes
 
that its positions
 
are legally and
 
commercially reasonable.
 
The Company
considers
 
the statuses
 
of these
 
proceedings
 
when determining
 
its reserves
 
for unpaid
 
loss and
 
loss adjustment
expenses.
 
Aside
 
from
 
litigation
 
and
 
arbitrations
 
related
 
to
 
these
 
insurance
 
and
 
reinsurance
 
agreements,
 
the
 
Company
 
is
not a party to any other material litigation
 
or arbitration.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19
8.
 
OTHER COMPREHENSIVE INCOME (LOSS)
The following
 
table presents
 
the components
 
of comprehensive
 
income (loss) in
 
the consolidated
 
statements
 
of
operations for the periods indicated:
 
 
Three Months Ended June
 
30, 2022
Six Months Ended June 30, 2022
(Dollars in thousands)
Before Tax
Tax Effect
Net of Tax
Before Tax
Tax Effect
Net of Tax
Unrealized appreciation (depreciation)
 
("URA(D)") on securities - non-
credit related
$
(848,704)
$
116,340
$
(732,364)
$
(1,781,013)
$
233,473
$
(1,547,540)
Reclassification of net realized
 
losses (gains) included in net income
(loss)
16,467
(626)
15,841
21,369
(1,350)
20,019
Foreign currency translation adjustments
(30,896)
2,627
(28,269)
(65,499)
3,128
(62,371)
Reclassification of benefit plan liability amortization
 
included in net
income (loss)
959
(201)
758
1,919
(404)
1,515
Total other comprehensive
 
income (loss)
$
(862,174)
$
118,140
$
(744,034)
$
(1,823,224)
$
234,847
$
(1,588,377)
Three Months Ended June 30, 2021
Six Months Ended June 30, 2021
(Dollars in thousands)
Before Tax
Tax Effect
Net of Tax
Before Tax
Tax Effect
Net of Tax
Unrealized appreciation (depreciation)
 
("URA(D)") on securities - non-
credit related
$
94,009
$
(9,838)
$
84,171
$
(235,157)
$
30,713
$
(204,444)
Reclassification of net realized
 
losses (gains) included in net income
(loss)
3,118
(1,528)
1,590
(424)
(1,652)
(2,076)
Foreign currency translation adjustments
38,022
(3,727)
34,295
29,034
(4,321)
24,713
Reclassification of benefit plan liability amortization
 
included in net
income (loss)
2,586
(543)
2,043
5,172
(1,086)
4,086
Total other comprehensive
 
income (loss)
$
137,735
$
(15,636)
$
122,099
$
(201,375)
$
23,654
$
(177,721)
The following table presents details
 
of the amounts reclassified from AOCI for
 
the periods indicated:
 
Three Months Ended
Six Months Ended
June 30,
June 30,
Affected line item within the statements of
AOCI component
2022
2021
2022
2021
operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities
$
16,467
$
3,118
$
21,369
$
(424)
Other net realized capital gains (losses)
(626)
(1,528)
(1,350)
(1,652)
Income tax expense (benefit)
$
15,841
$
1,590
$
20,019
$
(2,076)
Net income (loss)
Benefit plan net gain (loss)
$
959
$
2,586
$
1,919
$
5,172
Other underwriting expenses
(201)
(543)
(404)
(1,086)
Income tax expense (benefit)
$
758
$
2,043
$
1,515
$
4,086
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20
The following
 
table presents
 
the components
 
of accumulated
 
other comprehensive
 
income (loss),
 
net of
 
tax, in
the consolidated balance sheets for the periods
 
indicated:
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Beginning balance of URA (D) on securities
$
(571,602)
$
431,878
$
239,397
$
724,159
Current period change in URA (D) of investments - non-credit related
(716,523)
85,761
(1,527,521)
(206,520)
Ending balance of URA (D) on securities
(1,288,124)
517,639
(1,288,124)
517,639
Beginning balance of foreign currency translation adjustments
(211,583)
(124,972)
(177,481)
(115,390)
Current period change in foreign currency translation adjustments
(28,269)
34,295
(62,371)
24,713
Ending balance of foreign currency translation adjustments
 
(239,852)
(90,677)
(239,852)
(90,677)
Beginning balance of benefit plan net gain (loss)
(49,634)
(71,827)
(50,392)
(73,870)
Current period change in benefit plan net gain (loss)
758
2,043
1,515
4,086
Ending balance of benefit plan net gain (loss)
(48,877)
(69,784)
(48,877)
(69,784)
Ending balance of accumulated other comprehensive income (loss)
$
(1,576,854)
$
357,178
$
(1,576,854)
$
357,178
(Some amounts may not reconcile due to rounding.)
9.
 
CREDIT FACILITIES
The Company
 
has multiple active
 
letter of
 
credit facilities
 
for a
 
total commitment
 
of up to
 
$
1.2
 
billion as of
 
June
30, 2022.
 
The Company
 
also has
 
additional uncommitted
 
letter of
 
credit facilities
 
of up to
 
$
340.0
 
million which
may be
 
accessible via
 
written
 
request and
 
corresponding
 
authorization
 
from the
 
applicable lender.
 
There is
 
no
guarantee the uncommitted
 
capacity will be available to us on
 
a future date.
 
The terms and outstanding amounts for
 
each facility are discussed below:
Group Credit Facility
Effective
 
May
 
26,
 
2016, Group,
 
Everest
 
Reinsurance
 
(Bermuda),
 
Ltd.
 
(“Bermuda
 
Re”)
 
and
 
Everest
 
International
Reinsurance,
 
Ltd.
 
(“Everest
 
International”),
 
both
 
direct
 
subsidiaries
 
of
 
Group,
 
entered
 
into
 
a
five year
,
 
$
800.0
million senior credit
 
facility with
 
a syndicate
 
of lenders,
 
which amended and
 
restated
 
in its entirety
 
the June 22,
2012,
four year
,
 
$
800.0
 
million
 
senior
 
credit
 
facility.
 
Both
 
the
 
May
 
26,
 
2016
 
and
 
June
 
22,
 
2012
 
senior
 
credit
facilities, which
 
have similar
 
terms, are
 
referred
 
to as
 
the “2016 Group
 
Credit Facility”.
 
Wells Fargo
 
Corporation
(“Wells Fargo Bank”) is
 
the administrative agent
 
for the 2016 Group Credit Facility.
Effective
 
May 26,
 
2021, the
 
term of
 
the 2016
 
Group Credit
 
Facility expired.
 
The Company
 
elected not
 
to renew
this facility
 
to allow
 
for the
 
replacement
 
by other
 
collateralized
 
bi-lateral
 
letter
 
of credit
 
facilities such
 
as those
described
 
below.
 
As
 
a
 
result
 
of
 
the
 
non-renewal
 
in
 
May
 
2021,
 
letter
 
of
 
credit
 
commitment/availability
 
in
 
the
2016 Group
 
Credit Facility
 
was
 
limited only
 
to the
 
letters
 
of credit
 
already
 
issued.
 
Those letters
 
of credit
 
were
subsequently cancelled from
 
this facility and the
 
facility is now fully
 
matured.
 
Prior to its maturity,
 
the Company
was in compliance with all Group Credit
 
Facility covenants.
The following table summarizes the
 
outstanding letters of credit
 
and/or borrowings for the periods
 
indicated:
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
Capacity
In Use
Date of Expiry
Wells Fargo Bank Group
 
Credit Facility
$
-
$
-
$
39,198
$
39,198
12/30/2022
Total Wells
 
Fargo Bank Group Credit Facility
$
-
$
-
$
39,198
$
39,198
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21
Bermuda Re Wells Fargo
 
Letter of Credit Facility
Effective February
 
23, 2021, Bermuda Re entered into
 
a letter of credit issuance facility
 
with Wells Fargo
 
referred
to as
 
the “2021
 
Bermuda Re
 
Wells
 
Fargo
 
Letter of
 
Credit Facility.”
 
The Bermuda
 
Re Wells
 
Fargo
 
Letter of
 
Credit
Facility
 
originally provided
 
for
 
the issuance
 
of up
 
to $
50.0
 
million of
 
secured
 
letters
 
of credit.
 
Effective
 
May
 
5,
2021,
 
the
 
agreement
 
was
 
amended
 
to
 
provide
 
for
 
the
 
issuance
 
of
 
up
 
to
 
$
500.0
 
million
 
of
 
secured
 
letters
 
of
credit.
 
The following table summarizes the
 
outstanding letters of credit
 
for the periods indicated:
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
 
Capacity
In Use
Date of Expiry
 
Wells Fargo Bank Bilateral
 
LOC Agreement
$
500,000
$
435,413
12/30/2022
$
500,000
$
351,497
12/30/2022
Total Wells
 
Fargo Bank Bilateral
 
LOC Agreement
$
500,000
$
435,413
$
500,000
$
351,497
Bermuda Re Citibank Letter of Credit Facility
Effective
 
August
 
9,
 
2021,
 
Bermuda
 
Re
 
entered
 
into
 
a
 
new
 
letter
 
of
 
credit
 
issuance
 
facility
 
with
 
Citibank
 
N.A.
which superseded
 
the previous
 
letter
 
of credit
 
issuance facility
 
with Citibank
 
N.A. that
 
was effective
 
December
31, 2020.
 
Both of
 
these agreements
 
are referred
 
to as
 
the “Bermuda
 
Re Citibank
 
Letter of
 
Credit Facility”.
 
The
current Bermuda Re
 
Citibank Letter of Credit
 
Facility provides
 
for the committed
 
issuance of up to $
230.0
 
million
of
 
secured
 
letters
 
of
 
credit.
 
In
 
addition,
 
the
 
facility
 
provided
 
for
 
the
 
uncommitted
 
issuance
 
of
 
up
 
the
 
$
140.0
million,
 
which
 
may
 
be
 
accessible
 
via
 
written
 
request
 
by
 
the
 
Company
 
and
 
corresponding
 
authorization
 
from
Citibank N.A.
 
The following table summarizes the
 
outstanding letters of credit
 
for the periods indicated:
 
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
Capacity
In Use
Date of Expiry
Bermuda Re Citibank LOC Facility-
 
Committed
$
230,000
$
419
12/16/22
$
230,000
$
4,425
02/28/22
208,340
12/31/22
925
03/01/22
473
01/21/23
1,264
11/24/22
4,425
02/28/23
423
12/16/22
1,097
03/01/23
146
12/20/22
975
08/15/23
216,622
12/31/22
1,222
09/23/23
473
01/21/23
145
12/20/23
985
08/15/23
1,234
09/23/23
Bermuda Re Citibank LOC Facility
 
- Uncommitted
140,000
84,203
12/31/22
140,000
84,203
12/31/22
21,671
03/30/26
22,731
12/30/25
Total Citibank
 
Bilateral Agreement
$
370,000
$
322,970
$
370,000
$
333,429
Bermuda Re Bayerische Landesbank
 
Credit Facility
Effective
 
August
 
27,
 
2021
 
Bermuda
 
Re
 
entered
 
into
 
a
 
letter
 
of
 
credit
 
issuance
 
facility
 
with
 
Bayerische
Landesbank,
 
an agreement
 
referred
 
to as
 
the “Bermuda
 
Re Bayerische
 
Landesbank
 
Bilateral
 
LOC
 
Facility”.
 
The
Bermuda Re
 
Bayerische
 
Landesbank
 
Bilateral
 
LOC
 
Facility
 
provides
 
for
 
the committed
 
issuance
 
of up
 
to $
200.0
million of secured letters of credit.
 
The following table summarizes the
 
outstanding letters of credit
 
for the periods indicated:
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
Capacity
In Use
Date of Expiry
Bayerische Landesbank Bilateral LOC
 
Agreement
$
200,000
$
153,427
12/31/2022
$
200,000
$
154,691
12/31/2022
Total Bayerische
 
Landesbank Bilateral LOC Agreement
$
200,000
$
153,427
$
200,000
$
154,691
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22
Bermuda Re Lloyd’s
 
Bank Credit Facility.
 
Effective October
 
8, 2021 Bermuda Re entered
 
into a letter of credit
 
issuance facility with Lloyd’s
 
Bank Corporate
Markets
 
PLC,
 
an
 
agreement
 
referred
 
to
 
as
 
the
 
“Bermuda
 
Re
 
Lloyd’s
 
Bank
 
Credit
 
Facility”.
 
The
 
Bermuda
 
Re
Lloyd’s
 
Bank
 
Credit
 
Facility
 
provides
 
for
 
the
 
committed
 
issuance
 
of
 
up
 
to
 
$
50.0
 
million
 
of
 
secured
 
letters
 
of
credit, and subject to credit approval
 
a maximum total facility amount of $
250.0
 
million.
The following table summarizes the
 
outstanding letters of credit
 
for the periods indicated:
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
 
Capacity
In Use
Date of Expiry
 
Bermuda Re Lloyd's Bank Credit Facility
 
-Committed
$
50,000
$
46,008
12/31/2022
$
50,000
$
46,008
12/31/2022
Bermuda Re Lloyd's Bank Credit Facility
 
-Uncommitted
200,000
84,806
12/31/2022
-
-
Total Bermuda Re
 
Lloyd's Bank Credit Facility
$
250,000
$
130,814
$
50,000
$
46,008
Bermuda Re Barclays Bank Credit
 
Facility.
 
Effective
 
November 3,
 
2021 Bermuda
 
Re entered
 
into a
 
letter of
 
credit issuance
 
facility with
 
Barclays
 
Bank PLC,
an agreement
 
referred
 
to as
 
the “Bermuda
 
Re Barclays
 
Credit Facility”.
 
The Bermuda
 
Re Barclays
 
Credit Facility
provides for the committed issuance
 
of up to $
200.0
 
million of secured letters of credit.
 
The following table summarizes the
 
outstanding letters of credit
 
for the periods indicated:
 
(Dollars in thousands)
At June 30, 2022
At December 31, 2021
Bank
Capacity
In Use
Date of Expiry
 
Capacity
In Use
Date of Expiry
 
Bermuda Re Barclays Bilateral
 
Letter of Credit Facility
$
200,000
$
171,628
12/31/2022
$
200,000
$
186,299
12/31/2022
Total Bermuda Re
 
Barclays Bilateral Letter
 
of Credit Facility
$
200,000
$
171,628
$
200,000
$
186,299
Federal Home Loan Bank Membership
Everest
 
Reinsurance
 
Company
 
(“Everest
 
Re”)
 
is
 
a
 
member
 
of
 
the
 
Federal
 
Home
 
Loan
 
Bank
 
of
 
New
 
York
(“FHLBNY”), which allows
 
Everest
 
Re to
 
borrow up
 
to
10
% of its
 
statutory
 
admitted assets.
 
As of June
 
30, 2022,
Everest
 
Re
 
had
 
admitted
 
assets
 
of
 
approximately
 
$
20.8
 
billion
 
which
 
provides
 
borrowing
 
capacity
 
of
 
up
 
to
approximately
 
$
2.1
 
billion.
 
As of
 
June 30,
 
2022, Everest
 
Re has
 
$
519.0
 
million of
 
borrowings
 
outstanding,
 
with
maturities in
 
November and
 
December,
 
2022, and
 
interest
 
payable
 
at interest
 
rates
 
between
0.53
% and
0.65
%.
 
Everest
 
Re incurred
 
interest
 
expense of
 
$
0.8
 
million and
 
$
0.3
 
million for
 
the three
 
months ended
 
June 30,
 
2022
and 2021,
 
respectively.
 
Everest
 
Re incurred
 
interest
 
expense of
 
$
1.5
 
million and
 
$
0.6
 
million for
 
the six
 
months
ended
 
June
 
30,
 
2022
 
and
 
2021,
 
respectively.
 
The
 
FHLBNY
 
membership
 
agreement
 
requires
 
that
4.5
%
 
of
borrowed funds be used to acquire additional
 
membership stock.
 
10.
 
COLLATERALIZED
 
REINSURANCE AND TRUST AGREEMENTS
Certain
 
subsidiaries
 
of
 
Group
 
have
 
established
 
trust
 
agreements,
 
which
 
effectively
 
use
 
the
 
Company’s
investments
 
as collateral,
 
as security
 
for assumed
 
losses payable
 
to certain
 
non-affiliated
 
ceding companies.
 
At
June 30, 2022, the total amount on deposit in trust
 
accounts was $
2.0
 
billion.
 
The Company
 
reinsures
 
some of
 
its catastrophe
 
exposures
 
with the
 
segregated
 
accounts
 
of Mt.
 
Logan
 
Re.
 
Mt.
Logan Re is
 
a Collateralized
 
insurer registered
 
in Bermuda and
100
% of the voting
 
common shares
 
are owned by
Group.
 
Each segregated
 
account invests
 
predominantly in
 
a diversified
 
set of catastrophe
 
exposures, diversified
by risk/peril and across different
 
geographic regions globally.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23
The
 
following
 
table
 
summarizes
 
the
 
premiums
 
and
 
losses
 
that
 
are
 
ceded
 
by
 
the
 
Company
 
to
 
Mt.
 
Logan
 
Re
segregated accounts and
 
assumed by the Company from Mt. Logan
 
Re segregated accounts.
 
Three Months Ended
 
Six Months Ended
June 30,
June 30,
Mt. Logan Re Segregated Accounts
2022
2021
2022
2021
(Dollars in thousands)
Ceded written premiums
$
31,805
$
56,183
$
82,044
$
155,293
Ceded earned premiums
41,068
71,422
91,511
149,529
Ceded losses and LAE
21,097
31,052
61,717
111,895
Assumed written premiums
580
2,741
1,373
5,217
Assumed earned premiums
580
2,741
1,373
5,217
Assumed losses and LAE
-
-
-
-
Effective
 
April
 
1,
 
2018,
 
the
 
Company
 
entered
 
into
 
a
 
retroactive
 
reinsurance
 
transaction
 
with
 
one
 
of
 
the
 
Mt.
Logan
 
Re segregated
 
accounts
 
to
 
retrocede
 
$
269.2
 
million
 
of casualty
 
reserves
 
held
 
by
 
Bermuda Re
 
related
 
to
accident years
2002
 
through
2015
.
 
As consideration
 
for entering
 
the agreement,
 
the Company
 
transferred
 
cash
of $
252.0
 
million
 
to
 
the
 
Mt. Logan
 
Re
 
segregated
 
account.
 
The maximum
 
liability
 
to
 
be retroceded
 
under
 
the
agreement
 
will
 
be
 
$
319.0
 
million.
 
The
 
Company
 
will
 
retain
 
liability
 
for
 
any
 
amounts
 
exceeding
 
the
 
maximum
liability.
 
As
 
of
 
June
 
30,
 
2022
 
and
 
December
 
31,
 
2021,
 
the
 
Company
 
has
 
a
 
reinsurance
 
recoverable
 
of
 
$
181.2
million and
 
$
206.1
 
million, respectively.
 
In addition,
 
the Company
 
has a
 
deferred
 
gain liability
 
of $
14.2
 
million
and $
15.5
 
million as of June 30, 2022 and December 31, 2021, respectively,
 
reported in other liabilities.
The
 
Company
 
entered
 
into
 
various
 
collateralized
 
reinsurance
 
agreements
 
with
 
Kilimanjaro
 
Re
 
Limited
(“Kilimanjaro”),
 
a
 
Bermuda
 
based
 
special
 
purpose
 
reinsurer,
 
to
 
provide
 
the
 
Company
 
with
 
catastrophe
reinsurance
 
coverage.
 
These
 
agreements
 
are
 
multi-year
 
reinsurance
 
contracts
 
which
 
cover
 
named
 
storm
 
and
earthquake events.
 
The table below summarizes the various
 
agreements.
 
 
(Dollars in thousands)
Class
Description
Effective Date
Expiration Date
Limit
Coverage Basis
Series 2018-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/30/2018
5/5/2023
$
62,500
Aggregate
Series 2018-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/30/2018
5/5/2023
200,000
Aggregate
Series 2019-1 Class A-1
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
12/12/2019
12/19/2023
150,000
Occurrence
Series 2019-1 Class B-1
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
12/12/2019
12/19/2023
275,000
Aggregate
Series 2019-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
12/12/2019
12/19/2024
150,000
Occurrence
Series 2019-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
12/12/2019
12/19/2024
275,000
Aggregate
Series 2021-1 Class A-1
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/21/2025
150,000
Occurrence
Series 2021-1 Class B-1
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/21/2025
85,000
Aggregate
Series 2021-1 Class C-1
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/21/2025
85,000
Aggregate
Series 2021-1 Class A-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/20/2026
150,000
Occurrence
Series 2021-1 Class B-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/20/2026
90,000
Aggregate
Series 2021-1 Class C-2
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
4/8/2021
4/20/2026
90,000
Aggregate
Series 2022-1 Class A
US, Canada, Puerto Rico – Named Storm and Earthquake
 
Events
6/22/2022
6/22/2025
300,000
Aggregate
Total available limit as of
 
June 30, 2022
$
2,062,500
Recoveries
 
under
 
these
 
collateralized
 
reinsurance
 
agreements
 
with
 
Kilimanjaro
 
are
 
primarily
 
dependent
 
on
estimated
 
industry
 
level
 
insured
 
losses
 
from
 
covered
 
events,
 
as
 
well
 
as
 
the
 
geographic
 
location
 
of
 
the
 
events.
 
The
 
estimated
 
industry
 
level
 
of
 
insured
 
losses
 
is
 
obtained
 
from
 
published
 
estimates
 
by
 
an
 
independent
recognized
 
authority
 
on
 
insured
 
property
 
losses.
 
Currently,
 
none
 
of
 
the
 
published
 
insured
 
loss
 
estimates
 
for
catastrophe
 
events
 
during
 
the applicable
 
covered
 
periods
 
of the
 
various
 
agreements
 
have
 
exceeded
 
the
 
single
event retentions or aggregate
 
retentions under the terms of the agreements
 
that would result in a recovery.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24
Kilimanjaro
 
has
 
financed the
 
various
 
property
 
catastrophe
 
reinsurance
 
coverages
 
by
 
issuing catastrophe
 
bonds
to
 
unrelated,
 
external
 
investors.
 
The
 
proceeds
 
from
 
the
 
issuance
 
of
 
the
 
Notes
 
listed
 
below
 
are
 
held
 
in
reinsurance trusts
 
throughout the
 
duration of
 
the applicable reinsurance
 
agreements and
 
invested
 
solely in U.S.
government money market
 
funds with a rating of at least
 
“AAAm” by Standard
 
& Poor’s.
 
(Dollars in thousands)
Note Series
Issue Date
Maturity Date
Amount
Series 2018-1 Class A-2
4/30/2018
5/5/2023
$
62,500
Series 2018-1 Class B-2
4/30/2018
5/5/2023
200,000
Series 2019-1 Class A-1
12/12/2019
12/19/2023
150,000
Series 2019-1 Class B-1
12/12/2019
12/19/2023
275,000
Series 2019-1 Class A-2
12/12/2019
12/19/2024
150,000
Series 2019-1 Class B-2
12/12/2019
12/19/2024
275,000
Series 2021-1 Class A-1
4/8/2021
4/21/2025
150,000
Series 2021-1 Class B-1
4/8/2021
4/21/2025
85,000
Series 2021-1 Class C-1
4/8/2021
4/21/2025
85,000
Series 2021-1 Class A-2
4/8/2021
4/20/2026
150,000
Series 2021-1 Class B-2
4/8/2021
4/20/2026
90,000
Series 2021-1 Class C-2
4/8/2021
4/20/2026
90,000
Series 2022-1 Class A
6/22/2022
6/22/2025
300,000
$
2,062,500
11.
 
SENIOR NOTES
The
 
table
 
below
 
displays
 
Everest
 
Reinsurance
 
Holdings’
 
(“Holdings”)
 
outstanding
 
senior
 
notes.
 
Fair
 
value
 
is
based on
 
quoted market
 
prices, but
 
due to
 
limited trading
 
activity,
 
these senior
 
notes are
 
considered Level
 
2 in
the fair value hierarchy.
 
June 30, 2022
December 31, 2021
Consolidated Balance
Consolidated Balance
(Dollars in thousands)
Date Issued
Date Due
Principal Amounts
Sheet Amount
Fair Value
Sheet Amount
Fair Value
4.868
% Senior notes
6/5/2014
6/1/2044
$
400,000
$
397,373
$
374,212
$
397,314
$
503,840
3.5
% Senior notes
10/7/2020
10/15/2050
1,000,000
980,310
769,220
980,046
1,054,520
3.125
% Senior notes
10/4/2021
10/15/2052
1,000,000
968,811
701,820
968,440
983,140
$
2,400,000
$
2,346,495
$
1,845,252
$
2,345,800
$
2,541,500
Interest expense incurred in
 
connection with these senior notes is as follows
 
for the periods indicated:
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars In thousands
2022
2021
2022
2021
Interest expense incurred
4.868
% Senior notes
$
4,868
$
4,868
$
9,736
$
9,736
Interest expense incurred
3.5
% Senior notes
8,807
8,805
17,614
17,610
Interest expense incurred
3.125
% Senior notes
7,827
-
15,741
-
$
21,502
$
13,673
$
43,090
$
27,346
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25
12.
 
LONG TERM SUBORDINATED
 
NOTES
 
The table below
 
displays Holdings’
 
outstanding fixed
 
to floating rate
 
long term subordinated
 
notes.
 
Fair value
 
is
based
 
on
 
quoted
 
market
 
prices,
 
but
 
due
 
to
 
limited
 
trading
 
activity,
 
these
 
subordinated
 
notes
 
are
 
considered
Level 2 in the fair value hierarchy.
 
Maturity Date
June 30, 2022
December 31, 2021
Original
Consolidated Balance
Fair
Consolidated Balance
Fair
(Dollars in thousands)
Date Issued
Principal Amount
Scheduled
Final
Sheet Amount
Value
Sheet Amount
Value
Long term subordinated notes
4/26/2007
$
400,000
5/15/2037
5/1/2067
$
223,824
$
189,012
$
223,774
$
216,289
During the fixed
 
rate interest
 
period from
May 3, 2007
 
through
May 14, 2017
, interest
 
was at the
 
annual rate
 
of
6.6
%, payable semi-annually in arrears
 
on November 15 and May 15 of each year,
 
commencing on
November 15,
2007
.
 
During the floating rate
 
interest period from
 
May 15, 2017 through
 
maturity,
 
interest will be based
 
on the
3
 
month
 
LIBOR
 
plus
238.5
 
basis
 
points,
 
reset
 
quarterly,
 
payable
 
quarterly
 
in
 
arrears
 
on
 
February
 
15,
 
May
 
15,
August 15
 
and November
 
15 of
 
each year,
 
subject to
 
Holdings’ right
 
to defer
 
interest
 
on
one
 
or more
 
occasions
for up
 
to
ten
 
consecutive
 
years.
 
Deferred
 
interest
 
will accumulate
 
interest
 
at the
 
applicable rate
 
compounded
quarterly
 
for
 
periods
 
from
 
and
 
including
 
May
 
15,
 
2017.
 
The
 
reset
 
quarterly
 
interest
 
rate
 
for
 
May
 
16,
 
2022
 
to
August 14, 2022 is
3.80
%.
 
Holdings may redeem
 
the long term subordinated
 
notes on or after
 
May 15, 2017, in
 
whole or in part at
100
% of
the principal amount
 
plus accrued and unpaid
 
interest; however,
 
redemption on or
 
after the scheduled
 
maturity
date and
 
prior to
May 1, 2047
 
is subject
 
to a
 
replacement
 
capital covenant.
 
This covenant
 
is for
 
the benefit
 
of
certain
 
senior
 
note
 
holders
 
and
 
it
 
mandates
 
that
 
Holdings
 
receive
 
proceeds
 
from
 
the
 
sale
 
of
 
another
subordinated
 
debt issue,
 
of at
 
least similar
 
size, before
 
it may
 
redeem the
 
subordinated
 
notes.
 
The Company’s
4.868
% senior notes,
 
due on
June 1, 2044
,
3.5
% senior noted
 
due on
October 15, 2050
 
and
3.125
% senior notes
due
 
on
October 15, 2052
 
are
 
the
 
Company’s
 
long
 
term
 
indebtedness
 
that
 
rank
 
senior
 
to
 
the
 
long
 
term
subordinated notes.
 
On March
 
19, 2009,
 
Group
 
announced the
 
commencement
 
of a
 
cash tender
 
offer
 
for
 
any
 
and all
 
of the
6.60
%
fixed
 
to
 
floating
 
rate
 
long
 
term
 
subordinated
 
notes.
 
Upon
 
expiration
 
of
 
the
 
tender
 
offer,
 
the
 
Company
 
had
reduced its
 
outstanding debt
 
by $
161.4
 
million.
 
In addition, during
 
2020, the Company
 
repurchased and
 
retired
$
13.2
 
million of the notes.
 
Interest
 
expense
 
incurred
 
in
 
connection
 
with
 
these
 
long
 
term
 
subordinated
 
notes
 
is
 
as follows
 
for
 
the
 
periods
indicated:
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
Interest expense incurred
$
1,927
$
1,460
$
3,458
$
2,922
13.
 
SEGMENT REPORTING
The Reinsurance
 
operation
 
writes worldwide
 
property
 
and casualty
 
reinsurance
 
and specialty
 
lines of
 
business,
on both
 
a treaty
 
and facultative
 
basis,
 
through
 
reinsurance
 
brokers,
 
as well
 
as directly
 
with ceding
 
companies.
 
Business is
 
written in
 
the U.S.,
 
Bermuda, and
 
Ireland offices,
 
as well as,
 
through branches
 
in Canada,
 
Singapore,
the United
 
Kingdom
 
and Switzerland.
 
The Insurance
 
operation
 
writes property
 
and casualty
 
insurance
 
directly
and
 
through
 
brokers,
 
surplus
 
lines
 
brokers
 
and
 
general
 
agents
 
within
 
the
 
U.S.,
 
Bermuda,
 
Canada,
 
Europe,
Singapore
 
and South
 
America through
 
its offices
 
in the
 
U.S.,
 
Canada, Chile,
 
Singapore,
 
United Kingdom,
 
Ireland
and a branch in the Netherlands.
 
These segments are
 
managed independently,
 
but conform
 
with corporate
 
guidelines with respect
 
to pricing, risk
management,
 
control
 
of
 
aggregate
 
catastrophe
 
exposures,
 
capital,
 
investments
 
and
 
support
 
operations.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26
Management
 
generally
 
monitors
 
and
 
evaluates
 
the
 
financial
 
performance
 
of
 
these
 
operating
 
segments
 
based
upon their underwriting results.
 
Underwriting
 
results
 
include
 
earned
 
premium
 
less
 
losses
 
and
 
loss
 
adjustment
 
expenses
 
(“LAE”)
 
incurred,
commission and brokerage
 
expenses and other
 
underwriting expenses.
 
The Company measures
 
its underwriting
results using
 
ratios, in
 
particular loss,
 
commission and
 
brokerage
 
and other
 
underwriting expense
 
ratios, which,
respectively,
 
divide incurred
 
losses, commissions
 
and brokerage
 
and other
 
underwriting expenses
 
by premiums
earned.
 
The
 
Company
 
does
 
not
 
maintain
 
separate
 
balance
 
sheet
 
data
 
for
 
its
 
operating
 
segments.
 
Accordingly,
 
the
Company does not
 
review and evaluate
 
the financial results
 
of its operating
 
segments based upon
 
balance sheet
data.
The following tables present the underwriting
 
results for the operating segments
 
for the periods indicated:
Three Months Ended June 30, 2022
Six Months Ended June 30, 2022
(Dollars in thousands)
Reinsurance
Insurance
Total
Reinsurance
Insurance
Total
Gross written premiums
$
2,201,210
$
1,245,829
$
3,447,038
$
4,386,822
$
2,246,567
$
6,633,389
Net written premiums
2,122,221
899,242
3,021,464
4,203,670
1,629,806
5,833,477
Premiums earned
$
2,139,559
$
776,678
$
2,916,237
$
4,205,813
$
1,502,189
$
5,708,003
Incurred losses and LAE
1,382,104
494,143
1,876,247
2,706,820
959,290
3,666,110
Commission and brokerage
530,859
99,435
630,294
1,045,101
190,422
1,235,523
Other underwriting expenses
52,063
117,470
169,533
102,516
228,310
330,826
Underwriting gain (loss)
$
174,534
$
65,630
$
240,165
$
351,376
$
124,168
$
475,544
Net investment income
225,978
468,808
Net gains (losses) on investments
(236,265)
(389,892)
Corporate expenses
(15,018)
(29,038)
Interest, fee and bond
 
issue cost amortization expense
(24,398)
(48,476)
Other income (expense)
(71,337)
(55,977)
Income (loss) before taxes
$
119,123
$
420,969
(Some amounts may not reconcile due to rounding.)
Three Months Ended June 30, 2021
Six Months Ended June 30, 2021
(Dollars in thousands)
Reinsurance
Insurance
Total
Reinsurance
Insurance
Total
Gross written premiums
$
2,148,235
$
1,041,905
$
3,190,140
$
4,207,250
$
1,914,323
$
6,121,573
Net written premiums
2,059,919
749,492
2,809,411
3,972,868
1,390,479
5,363,347
Premiums earned
$
1,920,801
$
637,571
$
2,558,372
$
3,698,253
$
1,247,984
$
4,946,237
Incurred losses and LAE
1,168,139
418,002
1,586,141
2,440,045
857,515
3,297,560
Commission and brokerage
473,258
84,490
557,749
881,982
164,777
1,046,760
Other underwriting expenses
47,065
93,779
140,844
99,061
184,014
283,075
Underwriting gain (loss)
$
232,339
$
41,300
$
273,639
$
277,165
$
41,678
$
318,843
Net investment income
407,095
667,508
Net gains (losses) on investments
104,109
143,011
Corporate expenses
(16,168)
(28,546)
Interest, fee and bond
 
issue cost amortization expense
(15,607)
(31,246)
Other income (expense)
7,114
63,707
Income (loss) before taxes
$
760,181
$
1,133,276
(Some amounts may not reconcile due to rounding.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
27
The
 
Company
 
produces
 
business
 
in
 
the
 
U.S.,
 
Bermuda
 
and
 
internationally.
 
The
 
net
 
income
 
deriving
 
from
 
and
assets
 
residing
 
in the
 
individual
 
foreign
 
countries
 
in which
 
the Company
 
writes
 
business
 
are
 
not identifiable
 
in
the Company’s
 
financial records.
 
Based on gross written
 
premium, the table below
 
presents the largest
 
country,
other than the U.S., in which the Company writes business,
 
for the periods indicated:
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in thousands)
2022
2021
2022
2021
United Kingdom gross written premium
$
312,343
$
249,314
$
623,924
$
615,462
14.
 
SHARE-BASED COMPENSATION
 
PLANS
 
For
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022, a
 
total
 
of
2,330
 
restricted
 
stock
 
awards
 
were
 
granted
 
on
 
May
 
10,
2022 with a fair value of $
280.98
 
per share.
 
For
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022,
 
a
 
total
 
of
199,138
 
restricted
 
stock
 
awards
 
were
 
granted:
 
187,760
,
9,048
 
and
2,330
 
restricted
 
share
 
awards
 
were
 
granted
 
on
 
February
 
23,
 
2022,
 
February
 
24,
 
2022
 
and
 
May
 
10,
2022,
 
with
 
a
 
fair
 
value
 
of
 
$
301.535
 
per
 
share,
 
$
287.9425
 
per
 
share
 
and
 
$
280.98
 
per
 
share,
 
respectively.
 
Additionally,
18,340
 
performance
 
share
 
unit
 
awards
 
were
 
granted
 
on
 
February
 
23,
 
2022,
 
with
 
a
 
fair
 
value
 
of
$
301.535
 
per unit.
 
15.
 
INCOME TAXES
The
 
Company
 
is
 
domiciled
 
in
 
Bermuda
 
and
 
has
 
subsidiaries
 
and/or
 
branches
 
in
 
Canada,
 
Chile,
 
Ireland,
 
the
Netherlands,
 
Singapore,
 
Switzerland,
 
the
 
United
 
Kingdom,
 
and
 
the
 
United
 
States.
 
The
 
Company’s
 
Bermuda
domiciled
 
subsidiaries
 
are
 
exempt
 
from
 
income
 
taxation
 
under
 
Bermuda
 
law
 
until
 
2035.
 
The
 
Company’s
 
non-
Bermudian
 
subsidiaries
 
and
 
branches
 
are
 
subject
 
to
 
income
 
taxation
 
at
 
varying
 
rates
 
in
 
their
 
respective
domiciles.
The Company generally
 
applies the estimated
 
Annualized Effective
 
Tax
 
Rate (“AETR”)
 
approach for
 
calculating its
tax
 
provision
 
for
 
interim
 
periods
 
as prescribed
 
by
 
ASC 740-270,
 
Interim
 
Reporting.
 
Under
 
the
 
AETR approach,
the
 
estimated
 
annualized
 
effective
 
tax
 
rate
 
is
 
applied
 
to
 
the
 
interim
 
year-to-date
 
pre-tax
 
income/(loss)
 
to
determine
 
the
 
income
 
tax
 
expense
 
or
 
benefit
 
for
 
the
 
year-to-date
 
period.
 
The
 
tax
 
expense
 
or
 
benefit
 
for
 
the
quarter represents
 
the difference
 
between the
 
year-to-date
 
tax expense
 
or benefit
 
for the
 
current year
 
-to-date
period less such
 
amount for
 
the immediately
 
preceding year-to-date
 
period.
 
Management considers
 
the impact
of all known events
 
in its estimation
 
of the Company’s
 
annual pre-tax
 
income/(loss) and annualized
 
effective tax
rate.
 
16.
 
SUBSEQUENT EVENTS
 
The Company
 
has evaluated
 
known recognized
 
and non-recognized
 
subsequent events.
 
The Company
 
does not
have any subsequent
 
events to report.
28
ITEM 2.
 
MANAGEMENT’S
 
DISCUSSION
 
AND
 
ANALYSIS
 
OF
 
FINANCIAL
 
CONDITION
 
AND
 
RESULTS
 
OF
OPERATION
 
Industry Conditions.
The worldwide
 
reinsurance
 
and
 
insurance
 
businesses
 
are highly
 
competitive,
 
as well
 
as cyclical
 
by
 
product
 
and
market.
 
As
 
such,
 
financial
 
results
 
tend
 
to
 
fluctuate
 
with
 
periods
 
of
 
constrained
 
availability,
 
higher
 
rates
 
and
stronger
 
profits
 
followed
 
by
 
periods
 
of
 
abundant
 
capacity,
 
lower
 
rates
 
and
 
constrained
 
profitability.
 
Competition
 
in
 
the
 
types
 
of reinsurance
 
and
 
insurance
 
business
 
that
 
we
 
underwrite
 
is
 
based
 
on
 
many
 
factors,
including the perceived overall
 
financial strength of
 
the reinsurer or insurer,
 
ratings of the reinsurer
 
or insurer by
A.M. Best
 
and/or
 
Standard
 
& Poor’s,
 
underwriting expertise,
 
the jurisdictions
 
where the
 
reinsurer
 
or insurer
 
is
licensed
 
or
 
otherwise
 
authorized,
 
capacity
 
and
 
coverages
 
offered,
 
premiums
 
charged,
 
other
 
terms
 
and
conditions
 
of
 
the
 
reinsurance
 
and
 
insurance
 
business
 
offered,
 
services
 
offered,
 
speed
 
of
 
claims
 
payment
 
and
reputation
 
and
 
experience
 
in
 
lines
 
written.
 
Furthermore,
 
the
 
market
 
impact
 
from
 
these
 
competitive
 
factors
related
 
to
 
reinsurance
 
and
 
insurance
 
is
 
generally
 
not
 
consistent
 
across
 
lines
 
of
 
business,
 
domestic
 
and
international geographical
 
areas and distribution channels.
 
We
 
compete
 
in
 
the
 
U.S.,
 
Bermuda
 
and
 
international
 
reinsurance
 
and
 
insurance
 
markets
 
with
 
numerous
 
global
competitors.
 
Our
 
competitors
 
include
 
independent
 
reinsurance
 
and
 
insurance
 
companies,
 
subsidiaries
 
or
affiliates
 
of
 
established
 
worldwide
 
insurance
 
companies,
 
reinsurance
 
departments
 
of
 
certain
 
insurance
companies, domestic
 
and international
 
underwriting operations,
 
including underwriting
 
syndicates
 
at Lloyd’s
 
of
London
 
and
 
certain
 
government
 
sponsored
 
risk
 
transfer
 
vehicles.
 
Some
 
of
 
these
 
competitors
 
have
 
greater
financial resources
 
than we do
 
and have
 
established long
 
term and continuing
 
business relationships,
 
which can
be
 
a
 
significant
 
competitive
 
advantage.
 
In
 
addition,
 
the
 
lack
 
of
 
strong
 
barriers
 
to
 
entry
 
into
 
the
 
reinsurance
business
 
and
 
recently,
 
the
 
securitization
 
of
 
reinsurance
 
and
 
insurance
 
risks
 
through
 
capital
 
markets
 
provide
additional sources of potential reinsurance
 
and insurance capacity and competition.
 
Worldwide
 
insurance
 
and
 
reinsurance
 
market
 
conditions
 
historically
 
have
 
been
 
competitive.
 
Generally,
 
there
was ample
 
insurance and
 
reinsurance
 
capacity relative
 
to demand,
 
as well
 
as additional
 
capital from
 
the capital
markets
 
through
 
insurance
 
linked
 
financial
 
instruments.
 
These
 
financial
 
instruments
 
such
 
as
 
side
 
cars,
catastrophe
 
bonds and
 
collateralized
 
reinsurance
 
funds, provided
 
capital
 
markets
 
with access
 
to insurance
 
and
reinsurance
 
risk exposure.
 
The capital
 
markets
 
demand for
 
these products
 
was being
 
primarily driven
 
by a
 
low
interest environment
 
and the desire to
 
achieve greater risk
 
diversification and
 
potentially higher returns
 
on their
investments.
 
This increased competition
 
was generally
 
having a negative
 
impact on rates,
 
terms and conditions;
however,
 
the impact varies widely by market
 
and coverage.
The industry continues to deal with the impacts of a global
 
pandemic, COVID-19 and its subsequent
 
variants.
 
We
continue to service and
 
meet the needs of our clients
 
while ensuring the safety
 
and health of our employees
 
and
customers.
Prior
 
to
 
the
 
pandemic,
 
there
 
was
 
a
 
growing
 
industry
 
consensus
 
that
 
there
 
was
 
some
 
firming
 
of
 
(re)insurance
rates
 
for
 
the
 
areas
 
impacted
 
by
 
the
 
recent
 
catastrophes.
 
The
 
increased
 
frequency
 
of
 
catastrophe
 
losses
 
that
continued
 
to
 
be
 
experienced
 
in
 
2022
 
and
 
throughout
 
2021
 
appears
 
to
 
be
 
further
 
pressuring
 
the
 
increase
 
of
rates.
 
As business activity continues
 
to regain strength,
 
rates also appear
 
to be firming in
 
most lines of business,
particularly
 
in
 
the
 
casualty
 
lines
 
that
 
had
 
seen
 
significant
 
losses
 
such
 
as
 
excess
 
casualty
 
and
 
directors’
 
and
officers’ liability.
 
Other casualty
 
lines are
 
experiencing modest
 
rate increase,
 
while some
 
lines such
 
as workers’
compensation
 
were
 
experiencing
 
softer
 
market
 
conditions.
 
It
 
is
 
too
 
early
 
to
 
tell
 
what
 
the
 
impact
 
on
 
pricing
conditions will be, but it is likely to change
 
depending on the line of business and geography.
While we
 
are unable
 
to predict
 
the full
 
impact the
 
pandemic will
 
have on
 
the insurance
 
industry as
 
it continues
to have
 
a negative
 
impact on the global
 
economy,
 
we are well
 
positioned to continue
 
to service our clients.
 
Our
capital
 
position
 
remains
 
a
 
source
 
of
 
strength,
 
with
 
high
 
quality
 
invested
 
assets,
 
significant
 
liquidity
 
and
 
a
 
low
operating
 
expense
 
ratio.
 
Our
 
diversified
 
global
 
platform
 
with
 
its
 
broad
 
mix
 
of
 
products,
 
distribution
 
and
geography is resilient.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
29
The war in the
 
Ukraine is ongoing
 
and an evolving
 
event.
 
Economic and legal
 
sanctions have been
 
levied against
Russia,
 
specific
 
named
 
individuals
 
and
 
entities
 
connected
 
to
 
the
 
Russian
 
government,
 
as
 
well
 
as
 
businesses
located
 
in
 
the
 
Russian
 
Federation
 
and/or
 
owned
 
by
 
Russian
 
nationals
 
by
 
numerous
 
countries,
 
including
 
the
United States.
 
The significant
 
political and
 
economic uncertainty
 
surrounding the
 
war and
 
associated sanctions
have
 
impacted
 
economic and
 
investment
 
markets
 
both within
 
Russia and
 
around
 
the world.
 
The Company
 
has
recorded $45.0
 
million of
 
incurred underwriting
 
losses related
 
to the
 
Ukraine/Russia
 
war as
 
of the
 
three and
 
six
months ended June 30, 2022.
 
Financial Summary.
We
 
monitor and
 
evaluate
 
our overall
 
performance
 
based upon
 
financial results.
 
The following
 
table displays
 
a
summary of the consolidated net income (loss), ratios
 
and shareholders’ equity for the periods
 
indicated.
Three Months Ended
Percentage
Six Months Ended
Percentage
June 30,
Increase/
June 30,
Increase/
(Dollars in millions)
2022
2021
(Decrease)
2022
2021
(Decrease)
Gross written premiums
 
$
3,447.0
 
 
$
3,190.1
 
 
8.1
%
$
6,633.4
 
 
$
6,121.6
 
 
8.4
%
Net written premiums
 
3,021.5
2,809.4
7.5
%
5,833.5
5,363.3
8.8
%
 
 
 
 
 
 
 
 
 
 
 
 
REVENUES:
Premiums earned
$
2,916.2
 
 
$
2,558.4
 
 
14.0
%
$
5,708.0
 
 
$
4,946.2
 
 
15.4
%
Net investment income
226.0
407.1
-44.5
%
468.8
667.5
-29.8
%
Net gains (losses) on investments
(236.3)
 
 
104.1
 
 
NM
(389.9)
 
 
143.0
 
 
NM
Other income (expense)
(71.3)
 
 
7.1
 
 
NM
(56.0)
 
 
63.7
 
 
-187.9
%
Total revenues
2,834.6
3,076.7
-7.9
%
5,730.9
5,820.5
-1.5
%
 
 
 
 
 
 
 
 
 
 
 
 
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
1,876.2
 
 
1,586.1
 
 
18.3
%
3,666.1
 
 
3,297.6
 
 
11.2
%
Commission, brokerage, taxes
 
and fees
630.3
557.7
13.0
%
1,235.5
1,046.8
18.0
%
Other underwriting expenses
169.5
 
 
140.8
 
 
20.4
%
330.8
 
 
283.1
 
 
16.9
%
Corporate expenses
15.0
16.2
-7.1
%
29.0
28.5
1.7
%
Interest, fees and bond issue
 
cost amortization expense
24.4
 
 
15.6
 
 
56.3
%
48.5
 
 
31.2
 
 
55.1
%
Total claims and expenses
2,715.4
2,316.5
17.2
%
5,309.9
4,687.2
13.3
%
 
 
 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE TAXES
119.1
760.2
-84.3
%
421.0
1,133.3
-62.9
%
Income tax expense (benefit)
 
(3.5)
 
 
80.2
 
 
-104.4
%
0.6
 
 
111.4
 
 
-99.5
%
NET INCOME (LOSS)
$
122.6
$
680.0
-82.0
$
420.4
$
1,021.8
-58.9
%
RATIOS:
Point
Change
Point
Change
Loss ratio
64.3
%
62.0
%
2.3
 
64.2
%
66.7
%
(2.5)
Commission and brokerage ratio
21.6
%
21.8
%
(0.2)
21.6
%
21.2
%
0.4
Other underwriting expense ratio
5.8
%
5.5
%
0.3
 
5.8
%
5.7
%
0.1
Combined ratio
91.8
%
89.3
%
2.5
91.7
%
93.6
%
(1.9)
At
At
Percentage
June 30,
December 31,
Increase/
(Dollars in millions, except per share amounts)
2022
2021
(Decrease)
Balance sheet data:
Total investments
 
and cash
$
28,723.3
 
$
29,673.3
 
-3.2
%
Total assets
37,907.7
38,185.3
-0.7
%
Loss and loss adjustment expense reserves
19,993.1
 
19,009.5
 
5.2
%
Total debt
3,089.3
3,088.6
-
%
Total liabilities
29,054.8
 
28,046.1
 
3.6
%
Shareholders' equity
8,852.9
10,139.2
-12.7
%
Book value per share
224.59
 
258.21
 
-13.0
%
(NM, not meaningful)
(Some amounts may not reconcile due to rounding.)
 
 
 
 
30
Revenues.
 
Premiums.
 
Gross written premiums
 
increased by 8.1% to
 
$3.4 billion for the
 
three months ended
 
June 30, 2022,
compared
 
to
 
$3.2
 
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021,
 
reflecting
 
a
 
$203.9
 
million,
 
or
 
19.6%,
increase in our
 
insurance business
 
and a $53.0 million,
 
or 2.5%, increase
 
in our reinsurance
 
business.
 
The rise in
insurance
 
premiums
 
was
 
primarily
 
due
 
to
 
increases
 
across
 
all
 
lines
 
of
 
business,
 
notably
 
specialty
 
casualty
business,
 
professional liability
 
business and other
 
specialty business.
 
The increase in
 
reinsurance premiums
 
was
primarily
 
due
 
to
 
increases
 
in
 
property
 
catastrophe
 
excess
 
of
 
loss
 
business
 
and
 
casualty
 
pro
 
rata
 
business,
partially
 
offset
 
by
 
a
 
decline
 
in
 
property
 
pro
 
rata
 
business.
 
Gross
 
written
 
premiums
 
increased
 
by
 
8.4%
 
to
 
$6.6
billion for the six
 
months ended June 30,
 
2022, compared to
 
$6.1 billion for the
 
six months ended June
 
30, 2021,
reflecting a $332.2 million, or 17.4%, increase
 
in our insurance business and a $179.6
 
million, or 4.3%, increase in
our
 
reinsurance
 
business.
 
The
 
rise
 
in
 
insurance
 
premiums
 
was
 
primarily
 
due
 
to
 
increases
 
across
 
all
 
lines
 
of
business,
 
notably
 
specialty
 
casualty
 
business,
 
professional
 
liability
 
business
 
and
 
other
 
specialty
 
business.
 
The
increase in reinsurance
 
premiums was
 
primarily due to
 
increases in casualty
 
pro rata
 
business and financial
 
lines
of business.
 
Net written premiums
 
increased by
 
7.5% to $3.0
 
billion for the
 
three months ended
 
June 30, 2022, compared
 
to
$2.8 billion
 
for the
 
three months
 
ended June
 
30, 2021.
 
Net written
 
premiums increased
 
by 8.8%
 
to $5.8
 
billion
for the
 
six months
 
ended June
 
30, 2022,
 
compared to
 
$5.4 billion
 
for the
 
six months
 
ended June
 
30, 2021.
 
The
percentage
 
increases
 
in
 
net
 
written
 
premiums
 
are
 
consistent
 
with
 
the
 
percentage
 
changes
 
in
 
gross
 
written
premiums.
 
Premiums
 
earned
 
increased
 
by
 
14.0%
 
to
 
$2.9
 
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022,
compared
 
to
 
$2.6 billion
 
for
 
the three
 
months
 
ended June
 
30, 2021.
 
Premiums
 
earned
 
increased
 
by
 
15.4% to
$5.7 billion for
 
the six months
 
ended June 30,
 
2022, compared
 
to $4.9
 
billion for
 
the six months
 
ended June 30,
2021.
 
The
 
changes
 
in
 
premiums
 
earned
 
relative
 
to
 
net
 
written
 
premiums
 
are
 
primarily
 
the
 
result
 
of
 
timing;
premiums are
 
earned ratably
 
over the
 
coverage period
 
whereas written
 
premiums are
 
recorded at
 
the initiation
of the
 
coverage
 
period.
 
Accordingly,
 
the significant
 
increases in
 
gross written
 
premiums from
 
pro rata
 
business
during
 
the
 
latter
 
half
 
of 2021
 
contributed
 
to
 
the
 
current
 
quarter
 
and
 
year-to-date
 
percentage
 
increases
 
in
 
net
earned premiums.
 
Other
 
Income
 
(Expense).
 
We
 
recorded
 
other
 
expense
 
of
 
$71.3
 
million
 
and
 
$56.0
 
million
 
for
 
the
 
three
 
and
 
six
months ended
 
June 30,
 
2022, respectively.
 
We recorded
 
other income
 
of $7.1
 
million and
 
$63.7 million
 
for the
three and six months
 
ended June 30, 2021, respectively.
 
The changes were primarily
 
the result of fluctuations
 
in
foreign currency exchange
 
rates.
 
We recognized
 
foreign currency exchange
 
expense of $73.9 million and
 
foreign
currency exchange
 
income of $8.8 million
 
for the three months
 
ended June 30, 2022 and 2021,
 
respectively.
 
We
recognized
 
foreign
 
currency exchange
 
expense of
 
$60.8 million
 
and foreign
 
currency exchange
 
income of
 
$60.6
million for the six months ended June 30, 2022 and 2021, respectively.
 
Net Investment Income.
 
Refer to Consolidated
 
Investments Results Section below.
Net Gains (Losses) on Investments.
 
Refer to Consolidated Investments
 
Results Section below.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31
Claims and Expenses.
Incurred
 
Losses
 
and
 
Loss
 
Adjustment
 
Expenses.
 
The
 
following
 
table
 
presents
 
our
 
incurred
 
losses
 
and
 
loss
adjustment expenses (“LAE”) for
 
the periods indicated.
 
Three Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
1,792.0
61.4
%
$
(0.7)
-
%
$
1,791.2
61.4
%
Catastrophes
85.0
2.9
%
-
-
%
85.0
2.9
%
Total
 
$
1,877.0
64.3
%
$
(0.7)
-
%
$
1,876.2
64.3
%
2021
 
 
 
Attritional
$
1,543.8
60.3
%
$
(2.6)
-0.1
%
$
1,541.1
60.2
%
Catastrophes
45.0
1.8
%
-
-
%
45.0
1.8
%
Total
 
$
1,588.8
62.1
%
$
(2.6)
-0.1
%
$
1,586.1
62.0
%
 
 
 
Variance 2022/2021
Attritional
$
248.2
1.1
pts
$
1.9
0.1
pts
$
250.1
1.2
pts
Catastrophes
40.0
1.1
pts
-
-
pts
40.0
1.1
pts
Total
 
$
288.2
2.2
pts
$
1.9
0.1
pts
$
290.1
2.3
pts
Six Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
3,467.8
60.8
%
$
(1.7)
-
%
3,466.1
60.8
%
Catastrophes
200.0
3.5
%
-
-
%
200.0
3.5
%
Total
 
$
3,667.8
64.3
%
$
(1.7)
-
%
$
3,666.1
64.2
%
2021
 
 
 
Attritional
$
2,987.0
60.4
%
$
(4.5)
-0.1
%
2,982.6
60.3
%
Catastrophes
315.0
6.4
%
-
-
%
315.0
6.4
%
Total
 
$
3,302.0
66.8
%
$
(4.5)
-0.1
%
$
3,297.6
66.7
%
 
 
 
Variance 2022/2021
Attritional
$
480.8
0.4
pts
$
2.8
0.1
pts
$
483.5
0.5
pts
Catastrophes
(115.0)
(2.9)
pts
-
-
pts
(115.0)
(2.9)
pts
Total
 
$
365.8
(2.5)
pts
$
2.8
0.1
pts
$
368.5
(2.5)
pts
(Some amounts may not reconcile due to rounding.)
Incurred losses and
 
LAE increased by
 
18.3% to $1.9 billion
 
for the three
 
months ended June
 
30, 2022, compared
to
 
$1.6
 
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021,
 
primarily
 
due
 
to
 
an
 
increase
 
of
 
$248.2
 
million
 
in
current year attritional losses
 
and an increase of $40.0 million in current
 
year catastrophe losses.
 
The increase in
current
 
year
 
attritional
 
losses
 
was
 
mainly
 
due
 
to
 
the
 
impact
 
of
 
the
 
increase
 
in
 
premiums
 
earned
 
and
 
$45.0
million of attritional losses
 
incurred due to the
 
Ukraine/Russia war.
 
The current year catastrophe
 
losses of $85.0
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
 
related
 
primarily
 
to
 
the
 
2022
 
South
 
Africa
 
flood
 
($45.0
million), the 2022
 
Canada derecho
 
($18.0 million), the
 
2022 2
nd
 
quarter U.S.
 
storms ($12.0
 
million) and the
 
2022
Western
 
Europe
 
Convective
 
storm
 
($10.0 million).
 
The $45.0
 
million of
 
current
 
year catastrophe
 
losses for
 
the
three
 
months
 
ended
 
June
 
30,
 
2021
 
related
 
to
 
Tropical
 
Storm
 
Claudette,
 
the
 
Texas
 
winter
 
storms,
 
the
 
2021
Australia floods and the Europe Convective
 
storms.
 
Incurred losses
 
and LAE increased
 
by 11.2% to
 
$3.7 billion for
 
the six months
 
ended June 30,
 
2022, compared
 
to
$3.3 billion for the six months ended
 
June 30, 2021, primarily due to an increase
 
of $480.8 million in current year
attritional
 
losses, partially
 
offset by
 
a decline
 
of $115.0
 
million in
 
current year
 
catastrophe
 
losses.
 
The increase
in
 
current
 
year
 
attritional
 
losses
 
was
 
mainly
 
due
 
to
 
the
 
impact
 
of
 
the
 
increase
 
in
 
premiums
 
earned
 
and
 
$45.0
million
 
of
 
attritional
 
losses
 
incurred
 
due
 
to
 
the
 
Ukraine/Russia
 
war.
 
The
 
current
 
year
 
catastrophe
 
losses
 
of
$200.0
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
related
 
primarily
 
to
 
the
 
2022
 
Australia
 
floods
 
($76.4
million), the 2022
 
South Africa flood
 
($45.0 million), the
 
2022 European
 
storms ($30.0 million),
 
the 2022 Canada
derecho ($18.0
 
million), the
 
2022 2
nd
 
quarter
 
U.S. storms
 
($12.0 million),
 
the 2022
 
Western
 
Europe
 
Convective
 
 
 
 
 
32
Storm
 
($10.0
 
million)
 
and
 
the
 
2022
 
March
 
U.S.
 
storms
 
($8.6
 
million).
 
The
 
$315.0
 
million
 
of
 
current
 
year
catastrophe
 
losses for
 
the six
 
months ended
 
June 30,
 
2021 related
 
primarily to
 
the Texas
 
winter storms
 
($270.0
million) with
 
the rest
 
of the
 
losses emanating
 
from Tropical
 
Storm Claudette,
 
the 2021
 
Australia
 
floods, Victoria
Australia flooding and the Europe Convective
 
storms.
 
Commission,
 
Brokerage,
 
Taxes
 
and Fees.
 
Commission, brokerage,
 
taxes
 
and fees
 
increased by
 
13.0% to
 
$630.3
million for the
 
three months
 
ended June 30,
 
2022, compared to
 
$557.7 million for
 
the three months
 
ended June
30, 2021.
 
Commission,
 
brokerage,
 
taxes
 
and fees
 
increased
 
by
 
18.0% to
 
$1.2 billion
 
for
 
the six
 
months
 
ended
June 30,
 
2022, compared
 
to $1.0
 
billion for
 
the six
 
months ended
 
June 30,
 
2021.
 
The increases
 
were primarily
due to the impact of the increases in premiums earned and
 
changes in the mix of business.
 
Other
 
Underwriting
 
Expenses.
 
Other
 
underwriting
 
expenses
 
were
 
$169.5
 
million
 
and
 
$140.8
 
million
 
for
 
the
three
 
months
 
ended
 
June
 
30,
 
2022
 
and
 
2021,
 
respectively.
 
Other
 
underwriting
 
expenses
 
were
 
$330.8
 
million
and
 
$283.1
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
and
 
2021,
 
respectively.
 
The
 
increases
 
in
 
other
underwriting
 
expenses
 
were
 
mainly
 
due
 
to
 
the
 
impact
 
of
 
the
 
increase
 
in
 
premiums
 
earned
 
as
 
well
 
as
 
the
continued build out of our insurance operations
 
,
 
including an expansion of the international insurance
 
platform.
 
Corporate
 
Expenses.
 
Corporate
 
expenses,
 
which
 
are
 
general
 
operating
 
expenses
 
that
 
are
 
not
 
allocated
 
to
segments,
 
were
 
$15.0
 
million
 
and
 
$16.2
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
 
and
 
2021,
respectively,
 
and $29.0 million
 
and $28.5 million
 
for the six
 
months ended June
 
30, 2022 and
 
2021, respectively.
 
The variances are mainly due to the changes
 
in variable incentive compensative expenses.
 
Interest,
 
Fees and
 
Bond Issue
 
Cost
 
Amortization
 
Expense.
 
Interest,
 
fees
 
and other
 
bond
 
amortization
 
expense
was $24.4
 
million and $15.6
 
million for
 
the three
 
months ended
 
June 30, 2022
 
and 2021,
 
respectively.
 
Interest,
fees and other bond
 
amortization expense was
 
$48.5 million and $31.2 million for
 
the six months ended June 30,
2022 and
 
2021, respectively.
 
The increases
 
were primarily
 
due to
 
the issuance
 
of $1.0
 
billion of
 
senior notes
 
in
October 2021.
 
Interest expense
 
was also impacted
 
by the movements
 
in the floating
 
interest rate
 
related to
 
the
long term
 
subordinated
 
notes, which
 
is reset
 
quarterly per
 
the note
 
agreement.
 
The floating
 
rate was
 
3.80% as
of June 30, 2022.
 
Income
 
Tax
 
Expense
 
(Benefit).
 
We
 
had
 
income
 
tax
 
benefit
 
of
 
$3.5
 
million
 
and
 
income
 
tax
 
expense
 
of
 
$80.2
million for
 
the three
 
months ended
 
June 30,
 
2022 and
 
2021,
 
respectively.
 
We
 
had income
 
tax
 
expense of
 
$0.6
million and $111.4 million for
 
the six months ended June
 
30, 2022 and 2021, respectively.
 
Income tax expense
 
is
primarily a
 
function
 
of the
 
geographic
 
location
 
of the
 
Company’s
 
pre-tax
 
income and
 
the statutory
 
tax
 
rates
 
in
those jurisdictions.
 
The effective tax
 
rate (“ETR”) is primarily
 
affected by tax
 
-exempt investment
 
income, foreign
tax
 
credits
 
and
 
dividends.
 
Variations
 
in
 
the
 
ETR
 
generally
 
result
 
from
 
changes
 
in
 
the
 
relative
 
levels
 
of
 
pre-tax
income,
 
including
 
the
 
impact
 
of
 
catastrophe
 
losses
 
and
 
net
 
capital
 
gains
 
(losses),
 
among
 
jurisdictions
 
with
different tax rates.
 
Net Income (Loss).
 
Our
 
net
 
income
 
was
 
$122.6
 
million
 
and
 
$680.0
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
 
and
 
2021,
respectively.
 
Our
 
net income
 
was
 
$420.4 million
 
and
 
$1.0 billion
 
for
 
the six
 
months
 
ended June
 
30,
 
2022 and
2021,
 
respectively.
 
These
 
changes
 
were
 
primarily
 
driven
 
by
 
the
 
financial
 
component
 
fluctuations
 
explained
above.
 
33
Ratios.
Our combined
 
ratio
 
increased
 
by
 
2.5 points
 
to
 
91.8% for
 
the three
 
months
 
ended June
 
30, 2022,
 
compared
 
to
89.3% for the three
 
months ended June 30,
 
2021 and decreased by
 
1.9 points to 91.7% for
 
the six months ended
June 30, 2022, compared
 
to 93.6% for
 
the six months
 
ended June 30,
 
2021.
 
The loss ratio
 
component increased
2.3 points for the
 
three months ended June
 
30, 2022 over the same period
 
last year mainly
 
due to an increase
 
of
$40.0 million in current
 
year catastrophe
 
losses and an increase
 
of $45.0 million in
 
current year
 
attritional losses
due to
 
the Ukraine/Russia
 
war.
 
The loss
 
ratio
 
component
 
decreased
 
2.5 points
 
for
 
the six
 
months
 
ended June
30,
 
2022 over
 
the
 
same
 
period
 
last
 
year
 
mainly
 
due to
 
a decline
 
of $115.0
 
million
 
in
 
current
 
year
 
catastrophe
losses,
 
partially offset
 
by an increase
 
of $45.0 million
 
in current
 
year attritional
 
losses due to
 
the Ukraine/Russia
war.
 
The commission
 
and brokera
 
ge ratio
 
components decreased
 
slightly to
 
21.6% for
 
the three
 
months ended
June 30, 2022
 
compared to
 
21.8%
 
for the
 
three months
 
ended June
 
30, 2021 and
 
increased to
 
21.6% for
 
the six
months ended
 
June 30,
 
2022 compared
 
to 21.2%
 
for the
 
six months
 
ended June
 
30, 2021.
 
These changes
 
were
mainly due
 
to changes
 
in the
 
mix of
 
business.
 
The other
 
underwriting expense
 
ratios
 
increased to
 
5.8% for
 
the
three months
 
ended June
 
30, 2022 compared
 
to 5.5%
 
for the
 
three months
 
ended June
 
30, 2021
 
and increased
slightly
 
to
 
5.8% for
 
the
 
six
 
months
 
ended
 
June 30,
 
2022 compared
 
to
 
5.7% for
 
the
 
six
 
months
 
ended
 
June
 
30,
2021.
 
These increases were mainly due to
 
higher insurance operations costs.
 
Shareholders’ Equity.
Shareholders’ equity decreased
 
by $1.3 billion to $8.9
 
billion at June 30, 2022 from
 
$10.1 billion at December 31,
2021,
 
principally
 
as
 
a
 
result
 
of
 
$1.5
 
billion
 
of
 
unrealized
 
depreciation
 
on
 
fixed
 
maturity
 
portfolio
 
net
 
of
 
tax,
$126.1 million
 
of shareholde
 
r
 
dividends,
 
$62.4 million
 
of net
 
foreign
 
currency translation
 
adjustments,
 
and the
repurchase of 5,000 common shares
 
for $1.3 million, partially offset by $420.4
 
million of net income,
 
$9.1 million
of
 
share-based
 
compensation
 
transactions
 
and
 
$1.5
 
million
 
of
 
net
 
benefit
 
plan
 
obligation
 
adjustments,
 
net
 
of
tax.
 
Consolidated Investment
 
Results
Net Investment Income.
Net
 
investment
 
income
 
decreased
 
by
 
44.5%
 
to
 
$226.0
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
compared
 
with
 
net
 
investment
 
income
 
of
 
$407.1
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
decrease
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
 
was
 
primarily
 
the
 
result
 
of
 
a
 
decline
 
of
 
$192.4
 
million
 
in
limited
 
partnership
 
income,
 
partially
 
offset
 
by
 
an
 
additional
 
$20.5
 
million
 
of
 
income
 
from
 
fixed
 
maturity
investments.
 
Net investment
 
income decreased
 
by
 
29.8% to
 
$468.8 million
 
for
 
the six
 
months
 
ended June
 
30,
2022 compared with investment
 
income of $667.5 million for the six
 
months ended June 30, 2021.
 
The decrease
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
was
 
primarily
 
the
 
result
 
of
 
a
 
decline
 
of
 
$218.3
 
million
 
in
 
limited
partnership
 
income,
 
partially
 
offset
 
by
 
an
 
additional
 
$27.8
 
million
 
of
 
income
 
from
 
fixed
 
maturity
 
investments.
 
The
 
limited
 
partnership
 
income
 
primarily
 
reflects
 
increases
 
in
 
their
 
reported
 
net
 
asset
 
values.
 
As
 
such,
 
until
these asset values
 
are monetized
 
and the resultant
 
income is distributed,
 
they are subject
 
to future increases
 
or
decreases in the asset value, and the results
 
may be volatile.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34
The following table shows the components
 
of net investment income for
 
the periods indicated.
 
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions)
2022
2021
2022
2021
Fixed maturities
$
168.8
$
148.3
$
317.0
$
289.2
Equity securities
 
4.6
3.5
8.7
8.3
Short-term investments and cash
6.6
0.7
6.7
1.0
Other invested assets
 
 
 
 
Limited partnerships
47.6
240.0
136.0
354.3
Other
14.0
25.9
25.8
31.9
Gross investment income before adjustments
241.5
418.3
494.3
684.6
Funds held interest income (expense)
0.8
3.3
4.5
11.3
Future policy benefit reserve income (expense)
(0.1)
(0.2)
(0.4)
(0.5)
Gross investment income
242.2
421.5
498.4
695.4
Investment expenses
(16.2)
(14.4)
(29.6)
(27.9)
Net investment income
$
226.0
$
407.1
$
468.8
$
667.5
(Some amounts may not reconcile due
 
to rounding.)
The following table shows a comparison
 
of various investment yields for
 
the periods indicated.
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Annualized pre-tax yield on average cash and invested assets
3.0
%
6.3
%
3.2
%
5.3
%
Annualized after-tax yield on average cash and invested assets
2.6
%
5.5
%
2.7
%
4.6
%
Annualized return on invested assets
-0.1
%
7.9
%
-0.5
%
6.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35
Net Gains (Losses) on Investments.
The following table presents the composition
 
of our net gains (losses) on investments
 
for the periods indicated.
 
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions)
2022
2021
Variance
2022
2021
Variance
Realized gains (losses) from dispositions:
 
Fixed maturity securities, available for sale:
 
Gains
$
7.4
$
19.8
$
(12.4)
$
27.6
$
34.7
$
(7.1)
 
Losses
(23.0)
(9.8)
(13.2)
(40.3)
(15.5)
(24.8)
 
Total
(15.6)
10.0
(25.6)
(12.8)
19.2
(32.0)
 
Equity securities, fair value:
 
 
 
 
 
 
 
Gains
4.1
5.8
(1.7)
7.6
18.1
(10.5)
 
Losses
(35.1)
(2.0)
(33.1)
(50.4)
(8.1)
(42.3)
 
Total
(30.9)
3.8
(34.7)
(42.7)
10.0
(52.7)
 
 
 
 
 
 
 
Other Invested Assets:
 
Gains
3.4
4.1
(0.8)
7.9
5.6
2.3
 
Losses
(2.8)
(1.4)
(1.4)
(3.1)
(1.5)
(1.6)
 
Total
0.6
2.7
(2.1)
4.7
4.1
0.6
Total net realized gains (losses) from dispositions:
 
Gains
14.9
29.7
(14.8)
43.1
58.4
(15.4)
 
Losses
(60.8)
(13.2)
(47.6)
(93.8)
(25.1)
(68.7)
 
Total
(45.9)
16.5
(62.3)
(50.8)
33.3
(84.1)
Allowance for credit losses:
(1.5)
(15.9)
14.4
(13.3)
(22.9)
9.6
Gains (losses) from fair value adjustments:
 
 
 
 
 
 
 
Equity securities, fair value
(188.9)
103.5
(292.4)
(325.8)
132.6
(458.4)
Total
(188.9)
103.5
(292.4)
(325.8)
132.6
(458.4)
 
 
 
 
 
 
Total net gains (losses) on investments
$
(236.3)
$
104.1
$
(340.3)
$
(389.9)
$
143.0
$
(532.9)
(Some amounts may not reconcile due to rounding.)
Net
 
gains
 
(losses)
 
on
 
investments
 
during
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
 
primarily
 
relate
 
to
 
net
 
losses
from
 
fair
 
value
 
adjustments
 
on
 
equity
 
securities
 
in
 
the
 
amount
 
of
 
$188.9
 
million
 
as
 
a
 
result
 
of
 
equity
 
market
declines
 
during
 
the
 
second
 
quarter
 
of
 
2022.
 
In
 
addition,
 
we
 
realized
 
$45.9
 
million
 
of
 
losses
 
due
 
to
 
the
disposition of investments and recorded
 
an increase to the allowance for credit
 
losses of $1.5 million.
Net gains
 
(losses) on investments
 
during the six
 
months ended
 
June 30, 2022
 
primarily relate
 
to net
 
losses from
fair value
 
adjustments on
 
equity securities
 
in the amount
 
of $325.8 million
 
as a
 
result of equity
 
market declines
during
 
the
 
first
 
six
 
months
 
of
 
2022.
 
In
 
addition,
 
we
 
realized
 
$50.8
 
million
 
of
 
losses
 
due
 
to
 
the
 
disposition
 
of
investments and
 
recorded an
 
increase to the
 
allowance for
 
credit losses of
 
$13.3 million primarily
 
related to
 
our
direct holdings of Russian corporate
 
fixed maturity securities.
Segment Results.
The
 
Company
 
manages
 
its
 
reinsurance
 
and
 
insurance
 
operations
 
as
 
autonomous
 
units
 
and
 
key
 
strategic
decisions are based on the aggregate operating
 
results and projections for
 
these segments of business.
 
The Reinsurance
 
operation
 
writes worldwide
 
property
 
and casualty
 
reinsurance
 
and specialty
 
lines of
 
business,
on both
 
a treaty
 
and facultative
 
basis,
 
through
 
reinsurance
 
brokers,
 
as well
 
as directly
 
with ceding
 
companies.
 
Business is
 
written in
 
the U.S.,
 
Bermuda, and
 
Ireland offices,
 
as well as,
 
through branches
 
in Canada,
 
Singapore,
the United
 
Kingdom
 
and Switzerland.
 
The Insurance
 
operation
 
writes property
 
and casualty
 
insurance
 
directly
and
 
through
 
brokers,
 
surplus
 
lines
 
brokers
 
and
 
general
 
agents
 
within
 
the
 
U.S.,
 
Bermuda,
 
Canada,
 
Europe,
Singapore
 
and
 
South
 
America
 
through
 
its
 
offices
 
in
 
the
 
U.S.,
 
Canada,
 
Chile,
 
Singapore,
 
the
 
United
 
Kingdom,
Ireland and a branch located in
 
the Netherlands.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
36
These segments are
 
managed independently,
 
but conform
 
with corporate
 
guidelines with respect
 
to pricing, risk
management,
 
control
 
of
 
aggregate
 
catastrophe
 
exposures,
 
capital,
 
investments
 
and
 
support
 
operations.
 
Management
 
generally
 
monitors
 
and
 
evaluates
 
the
 
financial
 
performance
 
of
 
these
 
operating
 
segments
 
based
upon their underwriting results.
 
Underwriting
 
results
 
include
 
earned
 
premium
 
less
 
losses
 
and
 
loss
 
adjustment
 
expenses
 
(“LAE”)
 
incurred,
commission
 
and
 
brokerage
 
expenses
 
and
 
other
 
underwriting
 
expenses.
 
We
 
measure
 
our
 
underwriting
 
results
using
 
ratios,
 
in
 
particular
 
loss,
 
commission
 
and
 
brokerage
 
and
 
other
 
underwriting
 
expense
 
ratios,
 
which,
respectively,
 
divide incurred
 
losses, commissions
 
and brokerage
 
and other
 
underwriting expenses
 
by premiums
earned.
 
The
 
Company
 
does
 
not
 
maintain
 
separate
 
balance
 
sheet
 
data
 
for
 
its
 
operating
 
segments.
 
Accordingly,
 
the
Company does not
 
review and evaluate
 
the financial results
 
of its operating
 
segments based upon
 
balance sheet
data.
 
Our
 
loss
 
and LAE
 
reserves
 
are
 
management’s
 
best
 
estimate
 
of our
 
ultimate
 
liability
 
for
 
unpaid
 
claims.
 
We
 
re-
evaluate
 
our
 
estimates
 
on
 
an
 
ongoing
 
basis,
 
including
 
all
 
prior
 
period
 
reserves,
 
taking
 
into
 
consideration
 
all
available
 
information,
 
and
 
in
 
particular,
 
recently
 
reported
 
loss
 
claim
 
experience
 
and
 
trends
 
related
 
to
 
prior
periods.
 
Such re-evaluations are recorded
 
in incurred losses in the period in which re-evaluation
 
is made.
The following discusses the underwriting results for
 
each of our segments for the periods indicated.
 
Reinsurance.
The
 
following
 
table
 
presents
 
the
 
underwriting
 
results
 
and
 
ratios
 
for
 
the
 
Reinsurance
 
segment
 
for
 
the
 
periods
indicated.
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions)
2022
2021
Variance
% Change
2022
2021
Variance
% Change
Gross written premiums
$
2,201.2
 
 
$
2,148.2
 
 
$
53.0
 
2.5
%
 
$
4,386.8
 
 
$
4,207.3
 
 
$
179.6
 
4.3
%
Net written premiums
2,122.2
2,059.9
62.3
3.0
%
4,203.7
3,972.9
230.8
5.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums earned
$
2,139.6
$
1,920.8
$
218.8
11.4
%
$
4,205.8
$
3,698.3
$
507.6
13.7
%
Incurred losses and LAE
1,382.1
 
 
1,168.1
 
 
214.0
 
18.3
%
 
2,706.8
 
 
2,440.0
 
 
266.8
 
10.9
%
Commission and brokerage
530.9
473.3
57.6
12.2
%
1,045.1
882.0
163.1
18.5
%
Other underwriting expenses
52.1
 
 
47.1
 
 
5.0
 
10.6
%
 
102.5
 
 
99.1
 
 
3.4
 
3.5
%
Underwriting gain (loss)
$
174.5
$
232.3
$
(57.8)
-24.9
%
$
351.4
$
277.2
$
74.2
26.8
%
Point Chg
Point Chg
Loss ratio
64.6
%
60.8
%
3.8
64.4
%
66.0
%
(1.6)
Commission and brokerage ratio
24.8
%
24.6
%
0.2
24.8
%
23.8
%
1.0
Other underwriting expense ratio
2.4
%
2.5
%
(0.1)
2.4
%
2.7
%
(0.3)
Combined ratio
91.8
%
87.9
%
3.9
91.6
%
92.5
%
(0.9)
(NM, Not Meaningful)
(Some amounts may not reconcile due to rounding.)
 
37
Premiums.
 
Gross written
 
premiums increased
 
by 2.5% to
 
$2.2 billion for
 
the three months
 
ended June 30,
 
2022
from $2.1
 
billion for
 
the three
 
months ended
 
June 30,
 
2021, primarily
 
due to
 
increases in
 
property catastrophe
excess of
 
loss business
 
and casualty pro
 
rata business
 
,
 
partially offset
 
by a decline
 
in property
 
pro rata
 
business.
 
Net written premiums
 
increased by 3.0% to
 
$2.12 billion for the
 
three months ended June
 
30, 2022 compared to
$2.06
 
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
higher
 
percentage
 
increase
 
in
 
net
 
written
premiums
 
compared
 
to
 
gross
 
written
 
premiums
 
mainly
 
related
 
to
 
a
 
reduction
 
in
 
business
 
ceded
 
to
 
the
segregated
 
accounts
 
of Mt.
 
Logan Re
 
in the
 
three months
 
ended June
 
30, 2022
 
compared
 
to the
 
three months
ended June 30,
 
2021.
 
Premiums earned increased
 
by 11.4% to
 
$2.1 billion for
 
the three months
 
ended June 30,
2022,
 
compared
 
to
 
$1.9
 
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
change
 
in
 
premiums
 
earned
relative to net written premiums
 
is primarily the result of timing; premiums are
 
earned ratably over the
 
coverage
period
 
whereas
 
written
 
premiums
 
are
 
recorded
 
at
 
the
 
initiation
 
of
 
the
 
coverage
 
period.
 
Accordingly,
 
the
significant increases
 
in gross written
 
premiums from
 
pro rata
 
business during the
 
latter half
 
of 2021 contributed
to the current quarter percentage
 
increase in net earned premiums.
 
Gross
 
written
 
premiums
 
increased
 
by
 
4.3%
 
to
 
$4.4
 
billion
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
from
 
$4.2
billion
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2021,
 
primarily
 
due
 
to
 
increases
 
in
 
casualty
 
pro
 
rata
 
business
 
and
financial lines of business.
 
Net written premiums increased
 
by 5.8% to $4.2 billion for the
 
six months ended June
30, 2022
 
compared
 
to
 
$4.0 billion
 
for
 
the six
 
months
 
ended June
 
30, 2021.
 
The higher
 
percentage
 
increase
 
in
net written
 
premiums
 
compared
 
to gross
 
written
 
premiums
 
mainly related
 
to a
 
reduction
 
in business
 
ceded to
the
 
segregated
 
accounts
 
of
 
Mt.
 
Logan
 
Re
 
in
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
compared
 
to
 
the
 
six
 
months
ended
 
June
 
30,
 
2021.
 
Premiums
 
earned
 
increased
 
by
 
13.7%
 
to
 
$4.2 billion
 
for
 
the
 
six months
 
ended
 
June 30,
2022, compared to $3.7
 
billion for the six
 
months ended June 30, 2021.
 
The change in premiums
 
earned relative
to net written
 
premiums is primarily
 
the result of
 
timing; premiums
 
are earned ratably
 
over the coverage
 
period
whereas
 
written
 
premiums
 
are
 
recorded
 
at
 
the
 
initiation
 
of
 
the
 
coverage
 
period.
 
Accordingly,
 
the
 
significant
increases
 
in
 
gross
 
written
 
premiums
 
from
 
pro
 
rata
 
business
 
during
 
the
 
latter
 
half
 
of
 
2021
 
contributed
 
to
 
the
current year-to-date percentage
 
increase
 
in net earned premiums.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38
Incurred Losses
 
and LAE
.
 
The following
 
table presents
 
the incurred
 
losses and
 
LAE for
 
the Reinsurance
 
segment
for the periods indicated.
 
Three Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
1,302.8
60.9
%
$
(0.7)
-
%
1,302.1
60.9
%
Catastrophes
80.0
3.7
%
-
-
%
80.0
3.7
%
Total Segment
$
1,382.8
64.6
%
$
(0.7)
-
%
$
1,382.1
64.6
%
2021
 
 
 
Attritional
$
1,134.6
59.1
%
$
(1.4)
-0.1
%
1,133.1
59.0
%
Catastrophes
35.0
1.8
%
-
-
%
35.0
1.8
%
Total Segment
$
1,169.6
60.9
%
$
(1.4)
-0.1
%
$
1,168.1
60.8
%
 
 
 
Variance 2022/2021
Attritional
$
168.2
1.8
pts
$
0.7
0.1
pts
$
169.0
1.9
pts
Catastrophes
45.0
1.9
pts
-
-
pts
45.0
1.9
pts
Total Segment
$
213.2
3.7
pts
$
0.7
0.1
pts
$
214.0
3.8
pts
Six Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
2,519.1
59.9
%
$
(2.3)
-0.1
%
2,516.8
59.9
%
Catastrophes
190.0
4.5
%
-
-
%
190.0
4.5
%
Total Segment
$
2,709.1
64.4
%
$
(2.3)
-0.1
%
$
2,706.8
64.4
%
2021
 
 
 
Attritional
$
2,185.8
59.1
%
$
(3.3)
-0.1
%
2,182.5
59.0
%
Catastrophes
257.5
7.0
%
-
-
%
257.5
7.0
%
Total Segment
$
2,443.3
66.1
%
$
(3.3)
-0.1
%
$
2,440.0
66.0
%
 
 
 
Variance 2022/2021
Attritional
$
333.3
0.8
pts
$
0.9
-
pts
$
334.2
0.8
pts
Catastrophes
(67.5)
(2.5)
pts
-
-
pts
(67.5)
(2.5)
pts
Total Segment
$
265.8
(1.7)
pts
$
0.9
-
pts
$
266.7
(1.6)
pts
Incurred losses
 
increased by
 
18.3% to
 
$1.4 billion
 
for the
 
three months
 
ended June
 
30, 2022,
 
compared to
 
$1.2
billion
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
increase
 
was
 
primarily
 
due
 
to
 
an
 
increase
 
of
 
$168.2
million in current
 
year attritional
 
losses and
 
an increase of
 
$45.0 million in
 
current year
 
catastrophe
 
losses.
 
The
increase in
 
current
 
year attritional
 
losses was
 
mainly related
 
to the
 
impact of
 
the increase
 
in premiums
 
earned
and
 
$45.0
 
million
 
of
 
attritional
 
losses
 
incurred
 
due
 
to
 
the
 
Ukraine/Russia
 
war.
 
The
 
current
 
year
 
catastrophe
losses of $80.0 million for the three
 
months ended June 30, 2022 related
 
primarily to the 2022 South Africa
 
flood
($45.0
 
million),
 
the
 
2022
 
Canada
 
derecho
 
($18.0
 
million),
 
the
 
2022
 
Western
 
Europe
 
Convective
 
storm
 
($10.0
million) and the 2022
 
2
nd
 
quarter U.S. storms
 
($7.0 million).
 
The $35.0 million of
 
current year
 
catastrophe losses
for
 
the three
 
months
 
ended June
 
30, 2021
 
related
 
primarily
 
to
 
Tropical
 
Storm Claudette,
 
the Victoria
 
Australia
flooding and the Europe Convective storms.
 
Incurred
 
losses
 
increased
 
by
 
10.9%
 
to
 
$2.7
 
billion
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022,
 
compared
 
to
 
$2.4
billion for
 
the six
 
months ended
 
June 30,
 
2021.
 
The increase
 
was primarily
 
due to
 
an increase
 
of $333.3
 
million
in current year attritional losses,
 
partially offset by a decrease
 
of $67.5 million in current year
 
catastrophe losses.
 
The
 
increase
 
in
 
current
 
year
 
attritional
 
losses
 
was
 
mainly
 
related
 
to
 
the
 
impact
 
of
 
the
 
increase
 
in
 
premiums
earned and $45.0 million of attritional losses
 
due to the Ukraine/Russia war.
 
The current year catastrophe
 
losses
of $190.0
 
million
 
for
 
the
 
six
 
months
 
ended June
 
30, 2022
 
related
 
primarily
 
to
 
the 2022
 
Australia
 
floods ($76.4
million), the 2022
 
South Africa flood
 
($45.0 million), the
 
2022 European
 
storms ($30.0 million),
 
the 2022 Canada
derecho
 
($18.0
 
million),
 
the
 
2022 Western
 
Europe
 
Convective
 
storm
 
($10.0
 
million),
 
the
 
2022
 
2
nd
 
quarter
 
U.S.
storms
 
($7.0
 
million)
 
and
 
the
 
2022
 
March
 
U.S.
 
storms
 
($3.6
 
million).
 
The
 
$257.5
 
million
 
of
 
current
 
year
catastrophe
 
losses for
 
the six months
 
ended June
 
30, 2021
 
primarily related
 
to the
 
Texas
 
winter storms
 
($212.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39
million)
 
with
 
the
 
rest
 
of
 
the
 
losses
 
emanating
 
from
 
Tropical
 
Storm
 
Claudette,
 
the
 
2021
 
Australia
 
floods,
 
the
Victoria Australia flooding and the Europe
 
Convective storms.
 
Segment
 
Expenses.
 
Commission
 
and
 
brokerage
 
expense
 
increased
 
by
 
12.2%
 
to
 
$530.9
 
million
 
for
 
the
 
three
months
 
ended
 
June
 
30,
 
2022
 
compared
 
to
 
$473.3
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
Commission and
 
brokerage
 
expense increased
 
by 18.5%
 
to $1.0
 
billion for
 
the six
 
months
 
ended June
 
30, 2022
compared
 
to
 
$882.0
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
increases
 
were
 
mainly
 
due
 
to
 
the
impact of the increases
 
in premiums earned and changes in the mix of business.
 
Segment other underwriting expenses increased
 
to $52.1 million for the three
 
months ended June 30, 2022 from
$47.1
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
Segment
 
other
 
underwriting
 
expenses
 
increased
 
to
$102.5
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
from
 
$99.1
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
2021.
 
The increases
 
were mainly due to the impact of increases
 
in premiums earned.
 
Insurance.
The
 
following
 
table
 
presents
 
the
 
underwriting
 
results
 
and
 
ratios
 
for
 
the
 
Insurance
 
segment
 
for
 
the
 
periods
indicated.
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions)
2022
2021
Variance
% Change
2022
2021
Variance
% Change
Gross written premiums
$
1,245.8
 
 
$
1,041.9
 
 
$
203.9
 
19.6
%
 
$
2,246.7
 
 
$
1,914.3
 
 
$
332.2
 
17.4
%
Net written premiums
899.2
749.5
149.7
20.0
%
1,629.8
1,390.5
239.3
17.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums earned
$
776.7
$
637.6
$
139.1
21.8
%
$
1,502.2
$
1,248.0
$
254.2
20.4
%
Incurred losses and LAE
494.1
 
 
418.0
 
 
76.1
 
18.2
%
 
959.3
 
 
857.5
 
 
101.8
 
11.9
%
Commission and brokerage
99.4
84.5
14.9
17.7
%
190.4
164.8
25.6
15.6
%
Other underwriting expenses
117.5
 
 
93.8
 
 
23.7
 
25.3
%
 
228.3
 
 
184.0
 
 
44.3
 
24.1
%
Underwriting gain (loss)
$
65.6
$
41.3
$
24.3
58.9
%
$
124.2
$
41.7
$
82.5
197.9
%
Point Chg
Point Chg
Loss ratio
63.6
%
 
 
65.6
%
 
 
 
 
-2.0
 
 
 
63.9
%
 
 
68.7
%
 
 
 
 
(4.8)
 
Commission and brokerage ratio
12.8
%
13.3
%
-0.5
12.7
%
13.2
%
(0.5)
Other underwriting
 
expense ratio
15.1
%
 
 
14.6
%
 
 
 
 
0.5
 
 
 
15.2
%
 
 
14.8
%
 
 
 
 
0.4
 
Combined ratio
91.5
%
93.5
%
-2.0
91.7
%
96.7
%
(4.9)
(NM not meaningful)
(Some amounts may not reconcile due to rounding.)
Premiums.
 
Gross written premiums increased
 
by 19.6% to $1.2 billion for the three
 
months ended June 30, 2022
compared to
 
$1.0 billion for
 
the three
 
months ended
 
June 30, 2021.
 
This rise was
 
primarily related
 
to increases
across all
 
lines of business,
 
notably specialty
 
casualty business,
 
professional liability
 
business and other
 
specialty
business.
 
Net written premiums increased
 
by 20.0% to $899.2 million
 
for the three months
 
ended June 30, 2022
compared
 
to
 
$749.5 million
 
for
 
the three
 
months
 
ended June
 
30, 2021,
 
which is
 
consistent
 
with the
 
change
 
in
gross written
 
premiums.
 
Premiums earned
 
increased 21.8%
 
to $776.7
 
million for
 
the three
 
months ended
 
June
30,
 
2022
 
compared
 
to
 
$637.6
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
change
 
in
 
premiums
earned relative
 
to net
 
written premiums
 
is the
 
result of
 
timing; premiums
 
are earned
 
ratably
 
over the
 
coverage
period
 
whereas
 
written
 
premiums
 
are
 
recorded
 
at
 
the
 
initiation
 
of
 
the
 
coverage
 
period.
 
Accordingly,
 
the
significant increases
 
in gross
 
written premiums
 
during the
 
latter half
 
of 2021 contributed
 
to the
 
current quarter
percentage increase in net earned
 
premiums.
 
Gross written
 
premiums increased
 
by 17.4% to
 
$2.2 billion for
 
the six months
 
ended June 30,
 
2022 compared
 
to
$1.9 billion for the six
 
months ended June 30, 2021.
 
This rise was primarily related
 
to increases across
 
all lines of
business,
 
notably
 
specialty
 
casualty
 
business,
 
professional
 
liability
 
business
 
and
 
other
 
specialty
 
business.
 
Net
written premiums
 
increased by
 
17.2% to
 
$1.6 billion
 
for the
 
six months
 
ended June
 
30, 2022
 
compared to
 
$1.4
billion for
 
the six
 
months ended
 
June 30,
 
2021, which
 
is consistent
 
with the
 
change in
 
gross
 
written premiums.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40
Premiums
 
earned
 
increased
 
20.4%
 
to
 
$1.5
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
compared
 
to
 
$1.2
billion
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
change
 
in
 
premiums
 
earned
 
relative
 
to
 
net
 
written
premiums
 
is
 
the
 
result
 
of
 
timing;
 
premiums
 
are
 
earned
 
ratably
 
over
 
the
 
coverage
 
period
 
whereas
 
written
premiums
 
are
 
recorded
 
at
 
the
 
initiation
 
of the
 
coverage
 
period.
 
Accordingly,
 
the significant
 
increases
 
in gross
written premiums
 
during the
 
latter
 
half of
 
2021 contributed
 
to the
 
current year
 
-to-date
 
percentage
 
increase in
net earned premiums.
 
Incurred Losses and
 
LAE.
 
The following table presents
 
the incurred losses
 
and LAE for the Insurance
 
segment for
the periods indicated.
 
Three Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
489.1
63.0
%
$
-
-
%
489.1
63.0
%
Catastrophes
5.0
0.6
%
-
-
%
5.0
0.6
%
Total Segment
$
494.1
63.6
%
$
-
-
%
$
494.1
63.6
%
2021
 
 
 
Attritional
$
409.2
64.2
%
$
(1.2)
-0.2
%
408.0
64.0
%
Catastrophes
10.0
1.6
%
-
-
%
10.0
1.6
%
Total Segment
$
419.2
65.8
%
$
(1.2)
-0.2
%
$
418.0
65.6
%
 
 
 
Variance 2022/2021
Attritional
$
79.9
(1.2)
pts
$
1.2
0.2
pts
$
81.1
(1.0)
pts
Catastrophes
(5.0)
(1.0)
pts
-
-
pts
(5.0)
(1.0)
pts
Total Segment
$
74.9
(2.2)
pts
$
1.2
0.2
pts
$
76.1
(2.0)
pts
Six Months Ended June 30,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2022
Attritional
$
948.6
63.1
%
$
0.7
-
%
949.3
63.1
%
Catastrophes
10.0
0.7
%
-
-
%
10.0
0.7
%
Total Segment
$
958.6
63.8
%
$
0.7
-
%
$
959.3
63.9
%
2021
 
 
 
Attritional
$
801.2
64.2
%
$
(1.2)
-0.1
%
800.0
64.1
%
Catastrophes
57.5
4.6
%
-
-
%
57.5
4.6
%
Total Segment
$
858.7
68.8
%
$
(1.2)
-0.1
%
$
857.5
68.7
%
 
 
 
Variance 2022/2021
Attritional
$
147.4
(1.1)
pts
$
1.9
0.1
pts
$
149.3
(1.0)
pts
Catastrophes
(47.5)
(3.9)
pts
-
-
pts
(47.5)
(3.9)
pts
Total Segment
$
99.9
(5.0)
pts
$
1.9
0.1
pts
$
101.8
(4.8)
pts
(Some amounts may not reconcile due to rounding.)
Incurred
 
losses
 
and
 
LAE
 
increased
 
by
 
18.2%
 
to
 
$494.1
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
compared
 
to
 
$418.0
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
The
 
increase
 
was
 
mainly
 
due
 
to
 
an
increase
 
of
 
$79.9
 
million
 
in
 
current
 
year
 
attritional
 
losses,
 
partially
 
offset
 
by
 
a
 
decrease
 
in
 
current
 
year
catastrophe losses
 
of $5.0 million.
 
The increase in current
 
year attritional losses
 
was primarily due to the
 
impact
of the increase
 
in premiums
 
earned.
 
The current
 
year catastrophe
 
losses of $5.0
 
million related
 
to the
 
2022 2
nd
quarter U.S.
 
storms.
 
The $10.0
 
million of
 
current
 
year catastrophe
 
losses for
 
the three
 
months ended
 
June 30,
2021 related to the Texas
 
winter storms.
 
Incurred losses
 
and LAE increased
 
by 11.9% to
 
$959.3 million
 
for the
 
six months
 
ended June 30,
 
2022 compared
to $857.5 million
 
for the six
 
months ended June
 
30, 2021.
 
The increase was
 
mainly due to
 
an increase of
 
$147.4
million in current
 
year attritional
 
losses, partially offset
 
by a decrease in
 
current year
 
catastrophe losses
 
of $47.5
million.
 
The
 
increase
 
in
 
current
 
year
 
attritional
 
losses
 
was
 
primarily
 
due
 
to
 
the
 
impact
 
of
 
the
 
increase
 
in
premiums earned.
 
The current
 
year catastrophe
 
losses of
 
$10.0 million
 
related
 
to the
 
2022 March
 
U.S. storms
 
 
 
 
 
 
 
 
 
 
 
 
 
41
($5.0 million) and
 
the 2022
 
2
nd
 
quarter U.S.
 
storms ($5.0
 
million).
 
The $57.5
 
million of current
 
year catastrophe
losses for the six months ended June 30, 2021 related
 
to the Texas
 
winter storms.
 
Segment Expenses.
 
Commission and brokerage
 
increased by 17.7%
 
to $99.4 million
 
for the three
 
months ended
June 30, 2022 compared to
 
$84.5 million for the
 
three months ended
 
June 30, 2021.
 
Commission and brokerage
increased by 15.6% to
 
$190.4 million for
 
the six months ended
 
June 30, 2022 compared
 
to $164.8 million for
 
the
six months
 
ended June
 
30, 2021.
 
These increase
 
s
 
were
 
mainly due
 
to
 
the impact
 
of the
 
increase
 
in premiums
earned.
 
Segment
 
other
 
underwriting
 
expenses
 
increased
 
to
 
$117.5
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022
compared
 
to
 
$93.8
 
million
 
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2021.
 
Segment
 
other
 
underwriting
 
expenses
increased
 
to
 
$228.3
 
million
 
for
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2022
 
compared
 
to
 
$184.0
 
million
 
for
 
the
 
six
months
 
ended
 
June
 
30,
 
2021.
 
These
 
increases
 
were
 
mainly
 
due
 
to
 
the
 
impact
 
of
 
the
 
increases
 
in
 
premiums
earned
 
and
 
increased
 
expenses
 
related
 
to
 
the
 
continued
 
build
 
out
 
of
 
the
 
insurance
 
business,
 
including
 
an
expansion of the international insurance
 
platform.
 
FINANCIAL CONDITION
 
Investments.
 
Total
 
investments
 
were
 
$26.6
 
billion
 
at
 
June
 
30,
 
2022,
 
a
 
decrease
 
of
 
$1.6
 
million
 
compared
 
to
$28.2 billion
 
at December
 
31, 2021.
 
This decrease
 
was primarily
 
related
 
to declines
 
in fixed
 
maturity securities,
equity securities
 
and short
 
-term investments.
 
Fixed
 
maturity
 
securities decreased
 
due to
 
declines in
 
fair values
resulting primarily from
 
higher interest
 
rates, partially
 
offset by
 
net purchases
 
of fixed maturity
 
securities during
the period.
 
Equity securities
 
decreased due
 
to declines
 
in fair
 
values due
 
to diminished
 
market performance
 
as
well
 
as
 
net
 
sales
 
of
 
equity
 
securities
 
during
 
the
 
period.
 
Short-term
 
investments
 
decreased
 
as
 
a
 
result
 
of
 
the
reinvestment of funds into
 
other vehicles.
 
The
 
Company’s
 
limited
 
partnership
 
investments
 
are
 
comprised
 
of
 
limited
 
partnerships
 
that
 
invest
 
in
 
private
equities.
 
Generally,
 
the limited
 
partnerships are
 
reported on
 
a quarter lag.
 
We receive
 
annual audited
 
financial
statements
 
for all of
 
the limited
 
partnerships which
 
are prepared
 
using fair
 
value accounting
 
in accordance
 
with
FASB guidance.
 
For the quarterly
 
reports, the Company
 
reviews the
 
financial reports for
 
any unusual
 
changes in
carrying value.
 
If the
 
Company becomes
 
aware of
 
a significant
 
decline in
 
value during
 
the lag
 
reporting period,
the loss will be recorded in the period in which the Company
 
identifies the decline.
 
The
 
table
 
below
 
summarize
 
the
 
composition
 
and
 
characteristics
 
of
 
our
 
investment
 
portfolio
 
as
 
of
 
the
 
dates
indicated.
 
At
At
June 30, 2022
December 31, 2021
Fixed income portfolio duration (years)
3.1
3.2
Fixed income composite credit quality
A+
A+
Reinsurance Recoverables
 
.
 
Reinsurance
 
recoverables
 
for
 
both paid
 
and unpaid
 
losses totaled
 
$2.1 billion
 
and $2.1
 
billion at
 
June 30,
 
2022
and December 31, 2021, respectively.
 
At June 30, 2022, $618.1 million,
 
or 29.5%, was receivable
 
from Mt. Logan
Re
 
collateralized
 
segregated
 
accounts;
 
$224.2
 
million,
 
or
 
10.7%,
 
was
 
receivable
 
from
 
Munich
 
Reinsurance
America, Inc.
 
(“Munich Re”)
 
and $131.5
 
million, or
 
6.3% was
 
receivable from
 
Endurance Specialty
 
Holdings, Ltd.
(“Endurance”).
 
No other retrocessionaire accounted
 
for more than 5% of our recoverables
 
.
 
Loss and
 
LAE Reserves.
 
Gross loss
 
and LAE reserves
 
totaled $20.0
 
billion and $19.0
 
billion at
 
June 30, 2022
 
and
December 31, 2021, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
42
The following
 
tables summarize
 
gross outstanding
 
loss and
 
LAE reserves
 
by segment,
 
classified by
 
case reserves
and IBNR reserves, for the periods indicated.
 
At June 30, 2022
Case
IBNR
Total
% of
 
(Dollars in millions)
Reserves
Reserves
Reserves
Total
Reinsurance
$
5,853.5
 
$
8,623.4
 
$
14,476.9
 
72.4
%
Insurance
1,639.8
3,731.1
5,370.9
26.9
%
Total excluding A&E
7,493.3
 
12,354.6
 
19,847.8
 
99.3
%
A&E
145.2
-
145.2
0.7
%
Total including A&E
$
7,638.5
 
$
12,354.6
 
$
19,993.1
 
100.0
%
(Some amounts may not reconcile due
 
to rounding.)
At December 31, 2021
Case
IBNR
Total
% of
 
(Dollars in millions)
Reserves
Reserves
Reserves
Total
Reinsurance
$
5,415.0
 
$
8,312.3
 
$
13,727.3
 
72.2
%
Insurance
1,546.2
3,562.4
5,108.6
26.9
%
Total excluding A&E
6,961.2
 
11,874.7
 
18,835.9
 
99.1
%
A&E
163.7
9.9
173.6
0.9
%
Total including A&E
$
7,124.8
 
$
11,884.7
 
$
19,009.5
 
100.0
%
(Some amounts may not reconcile due
 
to rounding.)
Changes
 
in
 
premiums
 
earned
 
and
 
business
 
mix,
 
reserve
 
re-estimations,
 
catastrophe
 
losses
 
and
 
changes
 
in
catastrophe loss reserves
 
and claim settlement activity all impact loss and LAE
 
reserves by segment and in total.
Our loss and
 
LAE reserves represent
 
management’s best
 
estimate of
 
our ultimate liability
 
for unpaid claims.
 
We
continuously
 
re-evaluate
 
our reserves,
 
including re-estimates
 
of prior
 
period reserves,
 
taking into
 
consideration
all
 
available
 
information
 
and,
 
in
 
particular,
 
newly
 
reported
 
loss
 
and
 
claim
 
experience.
 
Changes
 
in
 
reserves
resulting from
 
such re-evaluations
 
are reflected
 
in incurred
 
losses in the
 
period when the
 
re-evaluation
 
is made.
 
Our analytical
 
methods and
 
processes operate
 
at multiple
 
levels including
 
individual contracts,
 
groupings of
 
like
contracts, classes
 
and lines of business,
 
internal business units,
 
segments, legal entities,
 
and in the aggregate.
 
In
order to set appropriate
 
reserves, we make
 
qualitative and quantitative
 
analyses and judgments at
 
these various
levels.
 
Additionally,
 
the attribution
 
of reserves,
 
changes
 
in
 
reserves
 
and incurred
 
losses
 
among accident
 
years
requires
 
qualitative
 
and
 
quantitative
 
adjustments
 
and
 
allocations
 
at
 
these
 
various
 
levels.
 
We
 
utilize
 
actuarial
science,
 
business
 
expertise
 
and
 
management
 
judgment
 
in
 
a
 
manner
 
intended
 
to
 
ensure
 
the
 
accuracy
 
and
consistency of
 
our reserving
 
practices.
 
Nevertheless, our
 
reserves are
 
estimates, which
 
are subject
 
to variation,
which may be significant.
 
There
 
can
 
be no
 
assurance
 
that reserves
 
for,
 
and losses
 
from,
 
claim obligations
 
will not
 
increase
 
in the
 
future,
possibly
 
by
 
a
 
material
 
amount.
 
However,
 
we
 
believe
 
that
 
our
 
existing
 
reserves
 
and
 
reserving
 
methodologies
lessen
 
the
 
probability
 
that
 
any
 
such
 
increase
 
would
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
our
 
financial
 
condition,
results of operations or cash flows.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
43
Asbestos and Environmental
 
Exposures.
 
A&E exposures represent a separate
 
exposure group for monitoring
 
and
evaluating reserve
 
adequacy.
 
The following table
 
summarizes the
 
outstanding loss
 
reserves with respect
 
to A&E
reserves on both a gross and net of retrocessions
 
basis for the periods indicated.
 
At
At
June 30,
December 31,
(Dollars in millions)
2022
2021
Gross reserves
 
$
145.2
 
$
175.2
Ceded reserves
(15.8)
(19.0)
Net reserves
 
$
129.4
 
$
156.1
(Some amounts may not reconcile due
 
to rounding.)
With respect
 
to asbestos
 
only,
 
at June 30,
 
2022, we had
 
net asbestos
 
loss reserves
 
of $129.7 million,
 
or 100.2%,
of total net A&E reserves, all of which was for
 
assumed business.
Ultimate
 
loss
 
projections
 
for
 
A&E
 
liabilities
 
cannot
 
be
 
accomplished
 
using
 
standard
 
actuarial
 
techniques.
 
We
believe
 
that
 
our
 
A&E
 
reserves
 
represent
 
management’s
 
best
 
estimate
 
of the
 
ultimate
 
liability;
 
however,
 
there
can be no assurance that ultimate loss
 
payments will not exceed such reserves,
 
perhaps by a significant amount.
 
Industry
 
analysts
 
use
 
the
 
“survival
 
ratio”
 
to
 
compare
 
the
 
A&E
 
reserves
 
among
 
companies
 
with
 
such
 
liabilities.
 
The survival ratio is typically calculated
 
by dividing a company’s
 
current net reserves by the three year
 
average of
annual
 
paid
 
losses.
 
Hence,
 
the
 
survival
 
ratio
 
equals
 
the
 
number
 
of
 
years
 
that
 
it
 
would
 
take
 
to
 
exhaust
 
the
current reserves
 
if future
 
loss payments
 
were to
 
continue at
 
historical
 
levels.
 
Using this
 
measurement,
 
our net
three
 
year
 
asbestos
 
survival
 
ratio
 
was
 
3.6
 
years
 
at
 
June
 
30,
 
2022.
 
These
 
metrics
 
can
 
be
 
skewed
 
by
 
individual
large settlements
 
occurring in
 
the prior
 
three years
 
and therefore,
 
may not
 
be indicative
 
of the
 
timing of
 
future
payments.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Capital.
 
Shareholders’
 
equity
 
at
 
June
 
30,
 
2022
 
and
 
December
 
31,
 
2021
 
was
 
$8.9
 
billion
 
and
 
$10.1
 
billion,
respectively.
 
Management’s
 
objective
 
in
 
managing
 
capital
 
is
 
to
 
ensure
 
its
 
overall
 
capital
 
level,
 
as
 
well
 
as
 
the
capital
 
levels
 
of
 
its
 
operating
 
subsidiaries,
 
exceed
 
the
 
amounts
 
required
 
by
 
regulators,
 
the
 
amount
 
needed
 
to
support
 
our current
 
financial strength
 
ratings
 
from rating
 
agencies and
 
our own
 
economic capital
 
models.
 
The
Company’s capital
 
has historically exceeded these benchmark
 
levels.
 
Our
 
two
 
main
 
operating
 
companies
 
Bermuda
 
Re
 
and
 
Everest
 
Re
 
are
 
regulated
 
by
 
the
 
Bermuda
 
Monetary
Authority
 
(“BMA”)
 
and
 
the
 
State
 
of
 
Delaware,
 
Department
 
of
 
Insurance,
 
respectively.
 
Both
 
regulatory
 
bodies
have their
 
own capital
 
adequacy models
 
based on
 
statutory capital
 
as opposed
 
to GAAP basis
 
equity.
 
Failure to
meet
 
the
 
required
 
statutory
 
capital
 
levels
 
could
 
result
 
in
 
various
 
regulatory
 
restrictions,
 
including
 
business
activity and the payment of dividends to
 
their parent companies.
 
The regulatory targeted
 
capital and the actual statutory
 
capital for Bermuda Re and Everest
 
Re were as follows:
Bermuda Re
(1)
Everest Re
(2)
At December 31,
At December 31,
(Dollars in millions)
2021
2020
2021
2020
Regulatory targeted capital
$
2,169.3
 
$
1,923.2
 
$
2,960.0
 
$
2,489.8
Actual capital
$
3,184.1
$
2,930.3
$
5,717.1
$
5,276.0
(1)
 
Regulatory targeted capital
 
represents the target capital
 
level from the applicable year's BSCR
 
calculation.
(2)
 
Regulatory targeted capital
 
represents 200% of the RBC authorized
 
control level calculation for
 
the applicable year.
 
Our financial strength
 
ratings as determined
 
by A.M. Best, Standard
 
& Poor’s and
 
Moody’s are important
 
as they
provide
 
our
 
customers
 
and
 
investors
 
with
 
an
 
independent
 
assessment
 
of
 
our
 
financial
 
strength
 
using
 
a
 
rating
scale that provides
 
for relative
 
comparisons.
 
We continue
 
to possess significant
 
financial flexibility and
 
access to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44
debt
 
and
 
equity markets
 
as a
 
result
 
of our
 
financial
 
strength,
 
as evidenced
 
by
 
the
 
financial strength
 
ratings
 
as
assigned by independent rating agencies.
 
We maintain
 
our own
 
economic capital
 
models to
 
monitor and
 
project our
 
overall capital,
 
as well
 
as the
 
capital
at
 
our
 
operating
 
subsidiaries.
 
A
 
key
 
input
 
to
 
the
 
economic
 
models
 
is
 
projected
 
income
 
and
 
this
 
input
 
is
continually compared to actual results,
 
which may require a change in the capital
 
strategy.
 
As
 
part
 
of
 
our
 
capital
 
strategy,
 
we
 
model
 
our
 
potential
 
exposure
 
to
 
catastrophe
 
losses
 
arising
 
from
 
a
 
single
event.
 
Projected catastrophe
 
losses are generally summarized
 
in term of probable maximum
 
loss (“PML”).
 
A full
discussion
 
on
 
PMLs
 
is
 
included
 
in
 
our
 
December
 
31,
 
2021
 
Form
 
10-K
 
filing
 
in
 
PART
 
1,
 
Item
 
1.
 
Business,
 
Risk
Management
 
of
 
Underwriting
 
and
 
Reinsurance
 
Arrangements.
 
We
 
focus
 
on
 
the
 
projected
 
net
 
economic
 
loss
from a catastrophe
 
in a given zone as compared
 
to our shareholders’ equity.
 
Economic loss is the PML exposure,
net of third
 
party reinsurance,
 
reduced by estimated
 
reinstatement
 
premiums to renew
 
coverage and
 
estimated
income taxes.
 
In our December 31,
 
2021 Form 10-K, we
 
reported that
 
our projected net
 
economic loss from
 
our
largest
 
projected
 
100-year
 
event
 
represented
 
approximately
 
4.8%
 
of
 
our
 
December
 
31,
 
2021
 
shareholders’
equity.
 
During the first half of 2022, our net
 
exposure to catastrophes
 
has changed due to the market
 
conditions
and business
 
decisions.
 
As a
 
result, our
 
projected net
 
economic loss
 
from our
 
largest 100
 
-year event
 
in a
 
given
zone represents approximately
 
7.4% of our June 30, 2022 shareholders’ equity.
 
The table
 
below reflects
 
the Company’s
 
PML exposure,
 
net of
 
third
 
party reinsurance
 
at various
 
return
 
periods
for its
 
top zones/perils
 
(as ranked
 
by largest
 
1 in
 
100 year
 
economic loss)
 
based on
 
projection data
 
as of
 
July 1,
2022.
Return Periods (in years)
1 in 20
1 in 50
1 in 100
1 in 250
1 in 500
1 in 1,000
Exceeding Probability
5.0%
2.0%
1.0%
0.4%
0.2%
0.1%
(Dollars in millions)
Zone/ Peril
California, Earthquake
$
161
$
649
$
913
$
1,299
$
1,636
$
2,469
Southeast U.S., Wind
484
652
837
1,055
1,263
1,696
Texas Wind
140
385
587
889
1,111
1,350
Europe Wind
147
335
506
781
928
1,036
Chile Earthquake
89
218
407
686
932
1,084
The
 
projected
 
economic
 
losses,
 
defined
 
as
 
PML
 
exposures,
 
net
 
of
 
third
 
party
 
reinsurance,
 
reinstatement
premiums and estimated income taxes,
 
for the top zones/perils scheduled
 
are as follows:
 
Return Periods (in years)
1 in 20
1 in 50
1 in 100
1 in 250
1 in 500
1 in 1,000
Exceeding Probability
5.0%
2.0%
1.0%
0.4%
0.2%
0.1%
(Dollars in millions)
Zone/ Peril
California, Earthquake
$
127
 
$
478
 
$
659
 
$
943
 
$
1,226
 
$
1,834
Southeast U.S., Wind
304
418
527
685
838
1,165
Texas Wind
104
273
406
586
752
909
Europe Wind
120
263
383
608
704
802
Chile Earthquake
67
164
307
531
721
845
On October 4, 2021, we issued $1.0 billion of 31 year senior
 
notes with an interest coupon
 
rate of 3.125%.
 
These
senior notes will mature on October 15, 2052 and will pay
 
interest semi-annually.
 
During the
 
first half
 
of 2022,
 
we repurchased
 
5,000 shares
 
for $1.3
 
million in
 
the open
 
market
 
and paid
 
$126.1
million in
 
dividends to
 
adjust our
 
capital position
 
and enhance
 
long term
 
expected
 
returns to
 
our shareholders.
 
In
 
2021,
 
we
 
repurchased
 
887,622
 
shares
 
for
 
$225.1
 
million
 
in
 
the
 
open
 
market
 
and
 
paid
 
$246.7
 
million
 
in
dividends to adjust our capital position
 
and enhance long term expected returns
 
to our shareholders.
 
We may at
times enter
 
into
 
a
 
Rule 10b5-1
 
repurchase
 
plan agreement
 
to
 
facilitate
 
the
 
repurchase
 
of shares.
 
On May
 
22,
 
45
2020, our existing
 
Board authorization
 
to purchase
 
up to 30
 
million of our
 
shares was
 
amended to authorize
 
the
purchase
 
of
 
up
 
to
 
32
 
million
 
shares.
 
As
 
of
 
June
 
30,
 
2022,
 
we
 
had
 
repurchased
 
30.5
 
million
 
shares
 
under
 
this
authorization.
 
We may
 
continue, from
 
time to
 
time, to
 
seek to
 
retire portions
 
of our
 
outstanding
 
debt securities
 
through cash
repurchases, in open-market
 
purchases, privately negotiated
 
transactions or otherwise. Such
 
repurchases, if any,
will
 
be
 
subject
 
to
 
and
 
depend
 
on
 
prevailing
 
market
 
conditions,
 
our
 
liquidity
 
requirements,
 
contractual
restrictions
 
and other
 
factors.
 
The amounts
 
involved
 
in any
 
such
 
transactions,
 
individually
 
or
 
in the
 
aggregate,
may be material.
Liquidity.
 
Our liquidity
 
requirements
 
are generally
 
met from
 
positive
 
cash flow
 
from operations.
 
Positive
 
cash
flow results
 
from reinsurance
 
and insurance
 
premiums being
 
collected prior
 
to disbursements
 
for claims,
 
which
disbursements
 
generally
 
take
 
place
 
over
 
an
 
extended
 
period
 
after
 
the
 
collection
 
of
 
premiums,
 
sometimes
 
a
period of many
 
years.
 
Collected premiums
 
are generally
 
invested,
 
prior to
 
their use in
 
such disbursements,
 
and
investment
 
income provides
 
additional funding
 
for loss
 
payments.
 
Our net
 
cash flows
 
from operating
 
activities
were $1.6
 
billion and
 
$1.6 billion
 
for the
 
six months
 
ended June
 
30, 2022
 
and 2021,
 
respectively.
 
Additionally,
these cash flows reflected
 
net catastrophe
 
loss payments of
 
$377.1 million and $334.7
 
million for the six
 
months
ended June 30,
 
2022 and 2021,
 
respectively and
 
net tax payments
 
of $100.5 million
 
and $34.8 million
 
for the six
months ended June 30, 2022 and 2021, respectively.
 
If disbursements
 
for claims
 
and benefits,
 
policy acquisition
 
costs and
 
other operating
 
expenses
 
were to
 
exceed
premium inflows,
 
cash flow
 
from reinsurance
 
and insurance
 
operations
 
would be
 
negative.
 
The effect
 
on cash
flow
 
from
 
insurance
 
operations
 
would
 
be
 
partially
 
offset
 
by
 
cash
 
flow
 
from
 
investment
 
income.
 
Additionally,
cash
 
inflows
 
from
 
investment
 
maturities
 
and
 
dispositions,
 
both
 
short-term
 
investments
 
and
 
longer
 
term
maturities are available to supplement
 
other operating cash flows.
 
As the
 
timing of
 
payments for
 
claims and
 
benefits cannot
 
be predicted
 
with certainty,
 
we maintain
 
portfolios of
long
 
term
 
invested
 
assets
 
with
 
varying
 
maturities,
 
along
 
with
 
short-term
 
investments
 
that
 
provide
 
additional
liquidity
 
for
 
payment
 
of
 
claims.
 
At
 
June
 
30,
 
2022
 
and
 
December
 
31,
 
2021,
 
we
 
held
 
cash
 
and
 
short-term
investments
 
of
 
$2.4
 
billion
 
and
 
$2.6
 
billion,
 
respectively.
 
Our
 
short-term
 
investments
 
are
 
generally
 
readily
marketable
 
and
 
can
 
be
 
converted
 
to
 
cash.
 
In
 
addition
 
to
 
these
 
cash
 
and
 
short-term
 
investments,
 
at
 
June
 
30,
2022,
 
we
 
had
 
$1.3
 
billion
 
of
 
available
 
for
 
sale
 
fixed
 
maturity
 
securities
 
maturing
 
within
 
one
 
year
 
or
 
less,
 
$7.2
billion
 
maturing
 
within
 
one
 
to
 
five
 
years
 
and
 
$5.9
 
billion
 
maturing
 
after
 
five
 
years.
 
Our
 
$1.3
 
billion
 
of
 
equity
securities
 
are
 
comprised
 
primarily
 
of
 
publicly
 
traded
 
securities
 
that
 
can
 
be
 
easily
 
liquidated.
 
We
 
believe
 
that
these fixed maturity and
 
equity securities, in conjunction
 
with the short-term investments
 
and positive cash flow
from operations,
 
provide ample
 
sources of
 
liquidity for
 
the expected
 
payment
 
of losses
 
in the
 
near future.
 
We
do
 
not anticipate
 
selling
 
a significant
 
amount
 
of securities
 
to
 
pay
 
losses
 
and LAE
 
but have
 
the
 
ability
 
to
 
do so.
 
Sales of
 
securities might
 
result in
 
net gains
 
(losses) on
 
investments.
 
At June
 
30, 2022
 
we had
 
$1.5 billion
 
of net
pre-tax
 
unrealized
 
depreciation
 
related
 
to
 
fixed
 
maturity
 
securities,
 
comprised
 
of
 
$1.6
 
billion
 
of
 
pre-tax
unrealized depreciation and $80.3 million
 
of pre-tax unrealized appreciation.
 
Management generally
 
expects annual
 
positive cash
 
flow from operations,
 
which reflects
 
the strength
 
of overall
pricing.
 
However,
 
given the recent
 
set of catastrophic
 
events, cash
 
flow from operations
 
may decline
 
and could
become negative in the near term as
 
significant claim payments are
 
made related to the catastrophes.
 
However,
as indicated above, the Company
 
has ample liquidity to settle its catastrophe
 
claims.
In addition to our cash flows from operations
 
and liquid investments, we also have
 
multiple active credit facilities
that
 
provide
 
commitments
 
of
 
up
 
to
 
$1.2
 
billion
 
of
 
collateralized
 
standby
 
letters
 
of
 
credit
 
to
 
support
 
business
written by
 
our Bermuda operating
 
subsidiaries.
 
In addition, the
 
Company has
 
the ability to
 
request access
 
to an
additional
 
$340.0
 
million
 
of
 
uncommitted
 
credit
 
facilities,
 
which
 
would
 
require
 
approval
 
from
 
the
 
applicable
lender.
 
There is
 
no guarantee
 
the uncommitted
 
capacity will
 
be available
 
to us
 
on a
 
future date.
 
See Note
 
9 –
Credit Facilities for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46
Market Sensitive Instruments.
 
The SEC’s
 
Financial Reporting
 
Release
 
#48 requires
 
registrants
 
to clarify
 
and expand
 
upon the
 
existing
 
financial
statement
 
disclosure
 
requirements
 
for
 
derivative
 
financial
 
instruments,
 
derivative
 
commodity
 
instruments
 
and
other financial instruments (collectively,
 
“market sensitive
 
instruments”).
 
We do not generally
 
enter into market
sensitive instruments for trading
 
purposes.
 
Our
 
current
 
investment
 
strategy
 
seeks
 
to
 
maximize
 
after-tax
 
income
 
through
 
a
 
high
 
quality,
 
diversified,
 
fixed
maturity
 
portfolio,
 
while
 
maintaining
 
an
 
adequate
 
level
 
of
 
liquidity.
 
Our
 
mix
 
of
 
investments
 
is
 
adjusted
periodically,
 
consistent
 
with
 
our
 
current
 
and
 
projected
 
operating
 
results
 
and
 
market
 
conditions.
 
The
 
fixed
maturity
 
securities
 
in
 
the
 
investment
 
portfolio
 
are
 
comprised
 
of
 
non-trading
 
available
 
for
 
sale
 
securities.
 
Additionally, we
 
have invested
 
in equity securities.
 
The
 
overall
 
investment
 
strategy
 
considers
 
the
 
scope
 
of
 
present
 
and
 
anticipated
 
Company
 
operations.
 
In
particular,
 
estimates
 
of
 
the
 
financial
 
impact
 
resulting
 
from
 
non-investment
 
asset
 
and
 
liability
 
transactions,
together
 
with our
 
capital
 
structure
 
and other
 
factors,
 
are used
 
to
 
develop
 
a net
 
liability analysis.
 
This analysis
includes estimated payout
 
characteristics for
 
which our investments
 
provide liquidity.
 
This analysis is considered
in the development of specific investment
 
strategies for asset
 
allocation, duration and
 
credit quality.
 
The change
in overall market sensi
 
tive risk exposure principally reflects
 
the asset changes that took place during the period.
 
Interest
 
Rate
 
Risk.
 
Our
 
$28.7
 
billion
 
investment
 
portfolio,
 
at
 
June
 
30,
 
2022,
 
is
 
principally
 
comprised
 
of
 
fixed
maturity
 
securities,
 
which
 
are
 
generally
 
subject
 
to
 
interest
 
rate
 
risk
 
and
 
some
 
foreign
 
currency
 
exchange
 
rate
risk, and some equity securities, which are subject to price
 
fluctuations and some foreign exchange
 
rate risk.
 
The
overall
 
economic
 
impact
 
of
 
the
 
foreign
 
exchange
 
risks
 
on
 
the
 
investment
 
portfolio
 
is
 
partially
 
mitigated
 
by
changes
 
in
 
the
 
dollar
 
value
 
of
 
foreign
 
currency
 
denominated
 
liabilities
 
and
 
their
 
associated
 
income
 
statement
impact.
 
Interest
 
rate
 
risk is
 
the potential
 
change in
 
value of
 
the fixed
 
maturity securities
 
portfolio,
 
including short-term
investments,
 
from
 
a
 
change
 
in
 
market
 
interest
 
rates.
 
In
 
a
 
declining
 
interest
 
rate
 
environment,
 
it
 
includes
prepayment
 
risk
 
on
 
the
 
$3.6 billion
 
of mortgage
 
-backed
 
securities
 
in
 
the
 
$22.0 billion
 
fixed
 
maturity
 
portfolio.
 
Prepayment risk results
 
from potential accelerated
 
principal payments that
 
shorten the average
 
life and thus
 
the
expected yield of the security.
 
The table
 
below displays
 
the potential
 
impact of
 
fair value
 
fluctuations and
 
after-tax unrealized
 
appreciation on
our fixed
 
maturity portfolio
 
(including $300.8
 
million of
 
short-term
 
investments)
 
for the
 
period indicated
 
based
on
 
upward
 
and
 
downward
 
parallel
 
and
 
immediate
 
100
 
and
 
200
 
basis
 
point
 
shifts
 
in
 
interest
 
rates.
 
For
 
legal
entities
 
with
 
a
 
U.S.
 
dollar
 
functional
 
currency,
 
this
 
modeling
 
was
 
performed
 
on
 
each
 
security
 
individually.
 
To
generate appropriate
 
price estimates on mortgage
 
-backed securities, changes in prepayment
 
expectations under
different interest
 
rate environments
 
were taken
 
into account.
 
For legal entities
 
with a non-U.S. dollar
 
functional
currency,
 
the
 
effective
 
duration
 
of
 
the
 
involved
 
portfolio
 
of
 
securities
 
was
 
used
 
as
 
a
 
proxy
 
for
 
the
 
fair
 
value
change under the various interest
 
rate change scenarios.
 
Impact of Interest Rate Shift in Basis Points
At June 30, 2022
-200
-100
0
 
100
200
(Dollars in millions)
Total Fair Value
$
23,745.3
 
$
22,999.0
 
$
22,252.7
 
$
21,506.4
 
$
20,760.1
Fair Value Change from Base (%)
6.7
%
3.4
%
0.0
%
(3.4)
%
(6.7)
%
Change in Unrealized Appreciation
After-tax from Base ($)
$
1,296.2
$
648.1
$
-
$
(648.1)
$
(1,296.2)
We had $20.0
 
billion and $19.0 billion
 
of gross reserves
 
for losses and
 
LAE as of June 30, 20
 
22 and December 31,
2021,
 
respectively.
 
These
 
amounts
 
are
 
recorded
 
at
 
their
 
nominal
 
value,
 
as
 
opposed
 
to
 
present
 
value,
 
which
would reflect
 
a discount
 
adjustment to
 
reflect the
 
time value
 
of money.
 
Since losses
 
are paid
 
out over
 
a period
of time, the present
 
value of the reserves
 
is less than the nominal
 
value.
 
As interest rates
 
rise, the present value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
47
of
 
the
 
reserves
 
decreases
 
and,
 
conversely,
 
as
 
interest
 
rates
 
decline,
 
the
 
present
 
value
 
increases.
 
These
movements are
 
the opposite
 
of the interest
 
rate impacts
 
on the
 
fair value
 
of investments.
 
While the difference
between
 
present
 
value
 
and nominal
 
value
 
is not
 
reflected
 
in our
 
financial statements,
 
our financial
 
results
 
will
include investment
 
income over
 
time from
 
the investment
 
portfolio until
 
the claims
 
are paid.
 
Our loss
 
and loss
reserve
 
obligations
 
have
 
an expected
 
duration
 
of approximately
 
3.7 years,
 
which is
 
reasonably
 
consistent
 
with
our fixed income portfolio.
 
If we were to
 
discount our loss and
 
LAE reserves, net of
 
ceded reserves, the discount
would
 
be
 
approximately
 
$2.5
 
billion
 
resulting
 
in
 
a
 
discounted
 
reserve
 
balance
 
of
 
approximately
 
$15.5
 
billion,
representing approximately
 
69.8%
 
of the value of the fixed maturity
 
investment portfolio funds.
 
Equity
 
Risk.
 
Equity
 
risk is
 
the potential
 
change
 
in
 
fair
 
value
 
of the
 
common
 
stock,
 
preferred
 
stock
 
and
 
mutual
fund
 
portfolios
 
arising
 
from
 
changing
 
prices.
 
Our
 
equity
 
investments
 
consist
 
of
 
a
 
diversified
 
portfolio
 
of
individual securities and mutual
 
funds, which invest
 
principally in high quality
 
common and preferred
 
stocks that
are
 
traded
 
on
 
the
 
major
 
exchanges,
 
and
 
mutual
 
fund
 
investments
 
in
 
emerging
 
market
 
debt.
 
The
 
primary
objective
 
of the
 
equity
 
portfolio
 
is
 
to
 
obtain
 
greater
 
total
 
return
 
relative
 
to
 
our
 
core
 
bonds
 
over
 
time through
market appreciation and income.
 
The table
 
below displays
 
the impact on
 
fair value
 
and after-tax
 
change in
 
fair value
 
of a 10%
 
and 20%
 
change in
equity prices up and down for the period indicated.
 
Impact of Percentage Change in Equity Fair/Market Values
At June 30, 2022
(Dollars in millions)
-20%
-10%
0%
10%
20%
Fair Value of the Equity Portfolio
$
1,039.4
 
$
1,169.3
 
$
1,299.2
 
$
1,429.1
 
$
1,559.1
After-tax Change in Fair Value
$
(206.0)
$
(103.0)
$
-
$
103.0
$
206.0
Foreign Currency
 
Risk.
 
Foreign currency
 
risk is the
 
potential change
 
in value,
 
income and
 
cash flow arising
 
from
adverse
 
changes
 
in
 
foreign
 
currency
 
exchange
 
rates.
 
Each
 
of
 
our
 
non-U.S./Bermuda
 
(“foreign”)
 
operations
maintains
 
capital
 
in
 
the
 
currency
 
of
 
the
 
country
 
of
 
its
 
geographic
 
location
 
consistent
 
with
 
local
 
regulatory
guidelines.
 
Each
 
foreign
 
operation
 
may
 
conduct
 
business in
 
its local
 
currency,
 
as well
 
as the
 
currency of
 
other
countries
 
in
 
which
 
it
 
operates.
 
The
 
primary
 
foreign
 
currency
 
exposures
 
for
 
these
 
foreign
 
operations
 
are
 
the
Canadian
 
Dollar,
 
the
 
Singapore
 
Dollar,
 
the
 
British
 
Pound
 
Sterling
 
and
 
the
 
Euro.
 
We
 
mitigate
 
foreign
 
exchange
exposure
 
by
 
generally
 
matching
 
the
 
currency
 
and
 
duration
 
of
 
our
 
assets
 
to
 
our
 
corresponding
 
operating
liabilities.
 
In accordance
 
with FASB
 
guidance, the
 
impact
 
on the
 
fair value
 
of available
 
for sale
 
fixed
 
maturities
due to changes in
 
foreign currency exchange
 
rates, in relation
 
to functional currency,
 
is reflected as part of
 
other
comprehensive
 
income.
 
Conversely,
 
the
 
impact
 
of
 
changes
 
in
 
foreign
 
currency
 
exchange
 
rates,
 
in
 
relation
 
to
functional
 
currency,
 
on
 
other
 
assets
 
and
 
liabilities
 
is
 
reflected
 
through
 
net
 
income
 
as
 
a
 
component
 
of
 
other
income
 
(expense).
 
In
 
addition,
 
we
 
translate
 
the
 
assets,
 
liabilities
 
and
 
income
 
of
 
non-U.S.
 
dollar
 
functional
currency
 
legal
 
entities
 
to
 
the
 
U.S.
 
dollar.
 
This
 
translation
 
amount
 
is
 
reported
 
as
 
a
 
component
 
of
 
other
comprehensive income.
 
Safe Harbor Disclosure.
This
 
report
 
contains
 
forward-looking
 
statements
 
within
 
the
 
meaning
 
of
 
the
 
U.S.
 
federal
 
securities
 
laws.
 
We
intend
 
these
 
forward-looking
 
statements
 
to
 
be
 
covered
 
by
 
the
 
safe
 
harbor
 
provisions
 
for
 
forward-looking
statements
 
in
 
the
 
federal
 
securities
 
laws.
 
In
 
some
 
cases,
 
these
 
statements
 
can
 
be
 
identified
 
by
 
the
 
use
 
of
forward-looking
 
words
 
such
 
as
 
“may”,
 
“will”,
 
“should”,
 
“could”,
 
“anticipate”,
 
“estimate”,
 
“expect”,
 
“plan”,
“believe”,
 
“predict”,
 
“potential”
 
and
 
“intend”.
 
Forward-looking
 
statements
 
contained
 
in
 
this
 
report
 
include
information regarding
 
our reserves for losses and LAE,
 
the CARES Act, the impact of the Tax
 
Cut and Jobs Act, the
adequacy
 
of
 
capital
 
in
 
relation
 
to
 
regulatory
 
required
 
capital,
 
the
 
adequacy
 
of
 
our
 
provision
 
for
 
uncollectible
balances,
 
estimates
 
of
 
our
 
catastrophe
 
exposure,
 
the
 
effects
 
of
 
catastrophic
 
and
 
pandemic
 
events
 
on
 
our
financial
 
statements,
 
the
 
ability
 
of
 
Everest
 
Re,
 
Holdings,
 
Holdings
 
Ireland,
 
Dublin
 
Holdings,
 
Bermuda
 
Re
 
and
Everest
 
International
 
to
 
pay
 
dividends
 
and
 
the
 
settlement
 
costs
 
of
 
our
 
specialized
 
equity
 
index
 
put
 
option
contracts.
 
Forward-looking
 
statements
 
only
 
reflect
 
our
 
expectations
 
and
 
are
 
not
 
guarantees
 
of
 
performance.
 
These
 
statements
 
involve
 
risks,
 
uncertainties
 
and
 
assumptions.
 
Actual
 
events
 
or
 
results
 
may
 
differ
 
materially
from our expectations.
 
Important factors
 
that could cause
 
our actual events
 
or results to
 
be materially different
48
from our expectations
 
include those discussed
 
under the caption ITEM
 
1A, “Risk Factors”
 
in the Company’s
 
most
recent
 
10-K
 
filing.
 
We
 
undertake
 
no
 
obligation
 
to
 
update
 
or
 
revise
 
publicly
 
any
 
forward-looking
 
statements,
whether as a result of new information,
 
future events or otherwise.
ITEM 3.
 
QUANTITATIVE
 
AND QUALITATIVE
 
DISCLOSURES ABOUT MARKET RISK
Market Risk Instruments.
 
See “Liquidity and Capital Resources - Market
 
Sensitive Instruments” in PART
 
I – ITEM
2.
ITEM 4.
 
CONTROLS AND PROCEDURES
As
 
of
 
the
 
end
 
of
 
the
 
period
 
covered
 
by
 
this
 
report,
 
our
 
management
 
carried
 
out
 
an
 
evaluation,
 
with
 
the
participation
 
of
 
the
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officer,
 
of
 
the
 
effectiveness
 
of
 
our
 
disclosure
controls and
 
procedures (as
 
defined in Rule
 
13a-15(e) under the
 
Securities Exchange
 
Act of 1934
 
(the “Exchange
Act”)).
 
Based
 
on
 
their
 
evaluation,
 
the
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officer
 
concluded
 
that
 
our
disclosure controls
 
and procedures are
 
effective to
 
ensure that
 
information required
 
to be disclosed
 
by us in the
reports that
 
it files
 
or submits
 
under the
 
Exchange Act
 
is recorded,
 
processed, summarized
 
and reported
 
within
the time periods specified in
 
Securities and Exchange
 
Commission’s
 
rules and forms.
 
Our management, with
 
the
participation
 
of
 
the
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officer,
 
also
 
conducted
 
an
 
evaluation
 
of
 
our
internal control
 
over financial reporting
 
to determine
 
whether any
 
changes occurred
 
during the quarter
 
covered
by this report that have
 
materially affected,
 
or are reasonably
 
likely to materially
 
affect, our internal
 
control over
financial reporting.
 
Based on that
 
evaluation, there
 
has been no
 
such change during
 
the quarter covered
 
by this
report.
 
PART II
ITEM 1.
 
LEGAL PROCEEDINGS
In
 
the
 
ordinary
 
course
 
of
 
business,
 
the
 
Company
 
is
 
involved
 
in
 
lawsuits,
 
arbitrations
 
and
 
other
 
formal
 
and
informal
 
dispute
 
resolution
 
procedures,
 
the
 
outcomes
 
of
 
which
 
will
 
determine
 
the
 
Company’s
 
rights
 
and
obligations
 
under insurance
 
and reinsurance
 
agreements.
 
In some
 
disputes,
 
the Company
 
seeks
 
to
 
enforce
 
its
rights under an agreement or to
 
collect funds owing to it.
 
In other matters, the Company
 
is resisting attempts by
others
 
to
 
collect
 
funds
 
or
 
enforce
 
alleged
 
rights.
 
These
 
disputes
 
arise
 
from
 
time
 
to
 
time
 
and
 
are
 
ultimately
resolved through
 
both informal
 
and formal
 
means, including
 
negotiated resolution,
 
arbitration and
 
litigation.
 
In
all such matters,
 
the Company believes
 
that its positions
 
are legally and
 
commercially reasonable.
 
The Company
considers
 
the statuses
 
of these
 
proceedings
 
when determining
 
its reserves
 
for unpaid
 
loss and
 
loss adjustment
expenses.
 
Aside
 
from
 
litigation
 
and
 
arbitrations
 
related
 
to
 
these
 
insurance
 
and
 
reinsurance
 
agreements,
 
the
 
Company
 
is
not a party to any other material litigation
 
or arbitration.
 
ITEM 1A.
 
RISK FACTORS
No material changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
49
ITEM 2.
 
UNREGISTERED SALES OF EQUITY SECURITIES
 
AND USE OF PROCEEDS
Issuer Purchases of Equity Securities.
Issuer Purchases of Equity Securities
(a)
(b)
(c)
(d)
Maximum Number (or
Total Number of
Approximate Dollar
Shares (or Units)
Value) of Shares (or
Purchased as Part
Units) that May Yet
Total Number of
of Publicly
Be Purchased Under
Shares (or Units)
Average Price Paid
Announced Plans or
the Plans or
Period
Purchased
per Share (or Unit)
Programs
Programs (1)
April 1 - 30, 2022
-
$
-
-
1,465,181
May 1 - 31, 2022
1,601
$
276.8129
-
1,465,181
June 1 - 30, 2022
801
$
270.2875
-
1,465,181
Total
2,402
$
-
-
-
(1)
 
On
 
May
 
22,
 
2020,
 
the
 
Company’s
 
executive
 
committee
 
of
 
the
 
Board
 
of
 
Directors
 
approved
 
an
 
amendment
 
to
 
the
 
share
 
repurchase
 
program
authorizing the
 
Company
 
and/or its
 
subsidiary
 
Holdings, to
 
purchase
 
up to
 
a current
 
aggregate
 
of 32.0
 
million of
 
the Company’s
 
shares (recognizing
 
that the
number
 
of
 
shares
 
authorized
 
for
 
repurchase
 
has
 
been
 
reduced
 
by
 
those
 
shares
 
that
 
have
 
already
 
been
 
purchased)
 
in
 
open
 
market
 
transactions,
 
privately
negotiated transactions or both.
 
Currently, the Company
 
and/or its subsidiary Holdings have repurchased
 
30.5 million of the Company’s shares.
ITEM 3.
 
DEFAULTS
 
UPON SENIOR SECURITIES
None.
ITEM 4.
 
MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
 
OTHER INFORMATION
None.
 
 
50
ITEM 6.
 
EXHIBITS
 
Exhibit Index
 
Exhibit No.
Description
 
31.1
 
31.2
 
32.1
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy
 
Extension Schema
101.CAL
XBRL Taxonomy
 
Extension Calculation Linkbase
101.DEF
XBRL Taxonomy
 
Extension Definition Linkbase
101.LAB
XBRL Taxonomy
 
Extension Labels Linkbase
101.PRE
XBRL Taxonomy
 
Extension Presentation Linkbase
104
Cover Page Interactive
 
Data File (embedded within the Inline XBRL document)
 
51
Everest Re Group,
 
Ltd.
Signatures
Pursuant
 
to the
 
requirements
 
of the
 
Securities Exchange
 
Act of
 
1934, the
 
registrant
 
has duly
 
caused this
 
report
to be signed on its behalf by the undersigned thereunto
 
duly authorized.
Everest Re Group,
 
Ltd.
(Registrant)
/S/ MARK KOCIANCIC
Mark Kociancic
Executive Vice President and
 
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Dated:
 
August 4, 2022