0001363829-19-000023 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 28, 2019	Jun. 30, 2018
Document Information [Line Items]
Entity Registrant Name	Enstar Group LTD
Entity Central Index Key	0001363829
Trading Symbol	ESGR
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Voluntary Filers	Yes
Entity Public Float			$ 2,220
Voting ordinary shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,964,779
Non-voting ordinary shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,509,682

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Trading, at fair value	$ 8,697,892
Fixed maturities, available-for-sale, at fair value (amortized cost: 2018 — $151,433; 2017 — $208,097)	151,609	$ 210,285
Funds held - directly managed	1,198,154	1,179,940
Equities, at fair value	367,125	106,603
Other investments, at fair value	1,957,757	913,392
Other investments, at cost	0	125,621
Equity method investments	204,507	343,005
Total investments (Note 6 and Note 11)	11,242,061	8,755,130
Cash and cash equivalents	602,096	955,150
Restricted cash and cash equivalents	380,488	257,686
Premiums receivable	787,468	425,702
Deferred tax assets (Note 20)	10,124	13,001
Prepaid reinsurance premiums	198,990	245,101
Reinsurance balances recoverable on paid and unpaid losses (Note 8)	1,290,072	1,478,806
Reinsurance balances recoverable on paid and unpaid losses, fair value (Note 8 and Note 11)	739,591	542,224
Funds held by reinsured companies	321,267	175,383
Deferred acquisition costs	121,101	64,984
Goodwill and intangible assets (Note 14)	218,725	180,589
Other assets	644,287	512,666
TOTAL ASSETS	16,556,270	13,606,422
LIABILITIES
Losses and loss adjustment expenses	6,535,449	5,603,419
Losses and loss adjustment expenses, fair value (Note 10 and Note 11)	2,874,055	1,794,669
Policy benefits for life and annuity contracts (Note 12)	105,080	117,207
Unearned premiums	842,618	583,197
Insurance and reinsurance balances payable	388,086	236,697
Deferred tax liabilities (Note 20)	10,542	15,262
Debt obligations (Note 15)	861,539	646,689
Other liabilities	566,369	983,728
TOTAL LIABILITIES	12,183,738	9,980,868
COMMITMENTS AND CONTINGENCIES (Note 23)
REDEEMABLE NONCONTROLLING INTEREST (Note 16)	458,543	479,606
Preferred Shares:
Treasury shares, at cost (Series C Preferred Shares 2018 and 2017: 388,571)	(421,559)	(421,559)
Additional paid-in capital	1,804,664	1,395,067
Accumulated other comprehensive income	10,440	10,468
Retained earnings	1,976,539	2,132,912
Total Enstar Group Limited Shareholders’ Equity	3,901,933	3,136,684
Noncontrolling interest	12,056	9,264
TOTAL SHAREHOLDERS’ EQUITY	3,913,989	3,145,948
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY	16,556,270	13,606,422
Voting ordinary shares
Ordinary shares (par value $1 each, issued and outstanding 2018: 21,459,997; 2017: 19,406,722):
Ordinary shares	17,950	16,402
Series C non-voting convertible ordinary shares
Ordinary shares (par value $1 each, issued and outstanding 2018: 21,459,997; 2017: 19,406,722):
Ordinary shares	2,600	2,600
Series E non-voting convertible ordinary shares
Ordinary shares (par value $1 each, issued and outstanding 2018: 21,459,997; 2017: 19,406,722):
Ordinary shares	910	405
Series C Preferred Shares
Preferred Shares:
Preferred shares	389	389
Series D Preferred Shares
Preferred Shares:
Preferred shares	400,000	0
Series E Preferred Shares
Preferred Shares:
Preferred shares	110,000	0
Short-term Investments
ASSETS
Trading, at fair value	114,116	180,211
Fixed maturity investments, trading
ASSETS
Trading, at fair value	7,248,793	5,696,073
Fixed maturities, available-for-sale, at fair value (amortized cost: 2018 — $151,433; 2017 — $208,097)	$ 151,609	$ 210,285

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fixed maturities, available-for-sale, at fair value, amortized cost	$ 151,433	$ 208,097
Ordinary shares, par value (dollars per share)	$ 1	$ 1
Ordinary shares, issued (shares)	21,459,997	19,406,722
Ordinary shares, outstanding (shares)	21,459,997	19,406,722
Voting ordinary shares
Ordinary shares, par value (dollars per share)	$ 1.00	$ 1
Ordinary shares, issued (shares)	17,950,315	16,402,279
Ordinary shares, outstanding (shares)	17,950,315	16,402,279
Series C non-voting convertible ordinary shares
Ordinary shares, issued (shares)	2,599,672	2,599,672
Ordinary shares, outstanding (shares)	2,599,672	2,599,672
Series E non-voting convertible ordinary shares
Ordinary shares, issued (shares)	910,010	404,771
Ordinary shares, outstanding (shares)	910,010	404,771
Series C Preferred Shares
Preferred shares, issued (shares)	388,571	388,571
Preferred shares, outstanding (shares)	388,571	388,571
Treasury shares (shares)	388,571	388,571
Series D Preferred Shares
Preferred shares, issued (shares)	16,000
Preferred shares, outstanding (shares)	16,000
Series E Preferred Shares
Preferred shares, issued (shares)	4,400
Preferred shares, outstanding (shares)	4,400
Fixed maturity investments, trading
Fixed maturities, available-for-sale, at fair value, amortized cost	$ 151,433	$ 208,097

Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INCOME
Net premiums earned	$ 231,947	$ 264,597	$ 228,812	$ 170,219	$ 160,627	$ 148,025	$ 155,571	$ 148,898	$ 895,575	$ 613,121	$ 823,514
Fees and commission income	11,455	6,950	8,352	8,331	19,627	15,895	18,667	11,914	35,088	66,103	39,364
Net investment income	68,453	69,430	66,469	66,319	58,605	52,028	49,417	48,739	270,671	208,789	185,463
Net realized and unrealized gains (losses)	(158,213)	(57,223)	(54,418)	(143,030)	50,637	29,301	51,877	58,519	(412,884)	190,334	77,818
Other income	34,267	8,226	(9,351)	1,943	13,763	1,734	(5,090)	12,198	35,085	22,605	10,236
Total income	187,909	291,980	239,864	103,782	303,259	246,983	270,442	280,268	823,535	1,100,952	1,136,395
EXPENSES
Net incurred losses and loss adjustment expenses	187,698	153,974	92,819	19,534	30,327	75,712	9,620	77,892	454,025	193,551	174,099
Life and annuity policy benefits									1,003	4,015	(2,038)
Acquisition costs	55,106	54,242	53,334	30,108	21,449	24,281	30,355	20,821	192,790	96,906	186,569
General and administrative expenses	106,950	102,553	102,612	95,260	126,702	100,325	106,490	102,468	407,375	435,985	423,734
Interest expense	4,644	4,640	8,922	8,011	7,251	6,410	7,573	6,868	26,217	28,102	20,642
Net foreign exchange losses	1,279	1,040	(5,519)	5,868	1,925	4,775	7,122	3,715	2,668	17,537	665
Loss on sale of subsidiary	0	0	0		0	6,740	9,609	0	0	16,349	0
Total expenses	356,463	316,872	252,008	158,735	186,621	219,303	175,058	211,463	1,084,078	792,445	803,671
EARNINGS (LOSS) BEFORE INCOME TAXES	(168,554)	(24,892)	(12,144)	(54,953)	116,638	27,680	95,384	68,805	(260,543)	308,507	332,724
Income tax benefit (expense)	10,688	(746)	(3,646)	(172)	9,629	(1,432)	(4,731)	2,929	6,124	6,395	(34,874)
Earnings (losses) from equity method investments	8,488	3,317	15,645	14,697	(4,460)	(5,582)	15,946	0	42,147	5,904	(5,400)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS	(149,378)	(22,321)	(145)	(40,428)	121,807	20,666	106,599	71,734	(212,272)	320,806	292,450
Net earnings from discontinued operations, net of income taxes	0	0	0	0	11,998	3,495	(4,871)	371	0	10,993	11,963
NET EARNINGS (LOSS)	(149,378)	(22,321)	(145)	(40,428)	133,805	24,161	101,728	72,105	(212,272)	331,799	304,413
Net loss (earnings) attributable to noncontrolling interest	42,955	11,489	8,389	(782)	(6,206)	14,832	(11,542)	(17,425)	62,051	(20,341)	(39,606)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED	(106,423)	(10,832)	8,244	(41,210)	127,599	38,993	90,186	54,680	(150,221)	311,458	264,807
Dividends on preferred shares	(7,000)	(5,133)	0	0	0	0	0	0	(12,133)	0	0
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$ (113,423)	$ (15,965)	$ 8,244	$ (41,210)	$ 127,599	$ 38,993	$ 90,186	$ 54,680	$ (162,354)	$ 311,458	$ 264,807
Basic:
Net earnings (loss) from continuing operations (dollars per share)	$ (5.29)	$ (0.74)	$ 0.40	$ (2.12)	$ 5.96	$ 1.83	$ 4.90	$ 2.80	$ (7.84)	$ 15.50	$ 13.10
Net earnings (loss) from discontinued operations, net of income taxes (dollars per share)	0	0	0	0	0.62	0.18	(0.25)	0.02	0	0.56	0.62
Net earnings (loss) per ordinary share (dollars per share)	(5.29)	(0.74)	0.40	(2.12)	6.58	2.01	4.65	2.82	(7.84)	16.06	13.72
Diluted:
Net earnings (loss) from continuing operations (dollars per share)	(5.29)	(0.74)	0.40	(2.12)	5.90	1.81	4.87	2.78	(7.84)	15.39	13.00
Net earnings from discontinued operations, net of income taxes (dollars per share)	0	0	0	0	0.61	0.18	(0.25)	0.02	0	0.56	0.62
Net earnings (loss) per ordinary share (dollars per share)	$ (5.29)	$ (0.74)	$ 0.40	$ (2.12)	$ 6.51	$ 1.99	$ 4.62	$ 2.80	$ (7.84)	$ 15.95	$ 13.62
Weighted average ordinary shares outstanding:
Basic (shares)									20,698,310	19,388,621	19,299,426
Diluted (shares)									20,904,176	19,527,591	19,447,241

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
NET EARNINGS (LOSS)	$ (212,272)	$ 331,799	$ 304,413
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) on fixed income investments arising during the year	(2,284)	4,776	4,776
Reclassification adjustment for net realized gains (losses) included in net earnings	63	(491)	(384)
Unrealized gains (losses) arising during the year, net of reclassification adjustment	(2,221)	4,285	4,392
Change in currency translation adjustment	(202)	9,423	4,793
Reclassification to earnings on disposal of subsidiary	0	20,751	0
Total cumulative translation adjustment	(202)	30,174	4,793
Decrease in defined benefit pension liability	2,156	1,501	3,079
Total other comprehensive gain (loss)	(267)	35,960	12,264
Comprehensive income (loss)	(212,539)	367,759	316,677
Comprehensive loss (income) attributable to noncontrolling interest	62,291	(22,285)	(40,257)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED	$ (150,248)	$ 345,474	$ 276,420

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Treasury Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Currency translation adjustment	Defined benefit pension liability	Unrealized gains (losses) on investments	Retained Earnings	Noncontrolling Interest (excludes redeemable noncontrolling interests)	Voting ordinary shares Ordinary Shares	Series A non-voting convertible ordinary shares Ordinary Shares	Series C non-voting convertible ordinary shares Ordinary Shares	Series E non-voting convertible ordinary shares Ordinary Shares	Series C non-voting preferred shares Preferred Stock	Series D Preferred Shares Preferred Stock	Series E preferred perpetual shares Preferred Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle								$ 0
Balance, beginning of year at Dec. 31, 2015			$ 1,373,044	$ (35,162)	$ (23,790)	$ (7,723)	$ (3,649)	1,578,312	$ 3,911	$ 16,133	$ 2,973	$ 2,726	$ 405	$ 0	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issue of shares			529							42			0		0	0
Conversion of convertible securities			2,584							0	(2,973)	0		389
Warrants exercised												66
Issuance costs of preferred shares			0
Amortization of share-based compensation			3,952
Reclassification to earnings on disposal of subsidiary					0
Change in defined benefit pension liability	$ 3,079					3,079
Net earnings (loss)	264,807							304,413
Net loss (earnings) attributable to noncontrolling interest	(39,606)							(39,606)	(1,034)
Dividends on preferred shares								0
Change in redemption value of redeemable noncontrolling interests								4,431
Contribution of capital									5,643
Other comprehensive income (loss)	12,264				4,797		3,737
Balance, end of year at Dec. 31, 2016		$ (421,559)	1,380,109	(23,549)	(18,993)	(4,644)	88	1,847,550	8,520	16,175	0	2,792	405	389	0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle								4,882
Issue of shares			450							35			0		0	0
Conversion of convertible securities			0							192	0	(192)		0
Warrants exercised												0
Issuance costs of preferred shares			0
Amortization of share-based compensation			14,508
Reclassification to earnings on disposal of subsidiary					20,751
Change in defined benefit pension liability	1,501					1,501
Net earnings (loss)	311,458							331,799
Net loss (earnings) attributable to noncontrolling interest	(20,341)							(20,341)	722
Dividends on preferred shares								0
Change in redemption value of redeemable noncontrolling interests								(30,978)
Contribution of capital									22
Other comprehensive income (loss)	35,960				9,413		2,352
Balance, end of year at Dec. 31, 2017	3,145,948	(421,559)	1,395,067	10,468	11,171	(3,143)	2,440	2,132,912	9,264	16,402	0	2,600	405	389	0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle								(1,573)
Issue of shares			413,141							1,548			505		400,000	110,000
Conversion of convertible securities			0							0	$ 0	0		0
Warrants exercised												0
Issuance costs of preferred shares			(14,643)
Amortization of share-based compensation			11,099
Reclassification to earnings on disposal of subsidiary					0
Change in defined benefit pension liability	2,156					2,156
Net earnings (loss)	(162,354)							(212,272)
Net loss (earnings) attributable to noncontrolling interest	62,051							62,051	2,743
Dividends on preferred shares								(12,133)
Change in redemption value of redeemable noncontrolling interests								7,554
Contribution of capital									49
Other comprehensive income (loss)	(267)				(185)		(1,999)
Balance, end of year at Dec. 31, 2018	$ 3,913,989	$ (421,559)	$ 1,804,664	$ 10,440	$ 10,986	$ (987)	$ 441	$ 1,976,539	$ 12,056	$ 17,950		$ 2,600	$ 910	$ 389	$ 400,000	$ 110,000

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
OPERATING ACTIVITIES:
Net earnings (loss)	$ (212,272)	$ 331,799	$ 304,413
Net earnings from discontinued operations, net of income taxes	0	(10,993)	(11,963)
Adjustments to reconcile net earnings to cash flows used in operating activities:
Realized losses (gains) on sale of investments	27,633	(1,668)	7,036
Unrealized losses (gains) on investments	385,251	(188,666)	(84,854)
Depreciation and other amortization	33,295	36,115	34,938
Net change in trading securities held on behalf of policyholders	0	25,597	(1,284)
Earnings from equity method investments	(42,147)	(5,904)	5,400
Sales and maturities of trading securities	4,802,224	6,111,607	3,406,788
Purchases of trading securities	(5,592,311)	(7,544,649)	(3,100,515)
Net loss on sale of subsidiary	0	16,349	0
Other non-cash items	11,857	15,490	8,566
Changes in:
Reinsurance balances recoverable on paid and unpaid losses	(268,039)	(530,857)	(21,866)
Funds held by reinsured companies	(126,897)	(93,310)	(967,379)
Losses and loss adjustment expenses	960,199	1,363,032	259,339
Policy benefits for life and annuity contracts	(6,776)	(3,314)	(11,037)
Insurance and reinsurance balances payable	151,918	(157,741)	120,515
Unearned premiums	173,725	34,854	5,682
Premiums receivable	(212,423)	(19,026)	(25,264)
Other operating assets and liabilities	(245,309)	278,178	(131,204)
Net cash flows used in operating activities	(160,072)	(343,107)	(202,689)
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired	(245,151)	(4,185)	(18,454)
Sale of subsidiary, net of cash sold	0	126,611	0
Sales and maturities of available-for-sale securities	58,219	86,359	81,596
Purchase of available-for-sale securities	(10,386)	(14,848)	(52,568)
Purchase of other investments	(901,071)	(109,885)	(91,093)
Redemption of other investments	436,396	232,827	245,069
Purchase of equity method investments	(155,440)	0	0
Other investing activities	(8,321)	(23,617)	(7,841)
Net cash flows provided by (used in) investing activities	(825,754)	293,262	156,709
FINANCING ACTIVITIES:
Net proceeds from the issuance of preferred shares	495,357	0	0
Dividends on preferred shares	(12,133)	0	0
Contribution by redeemable noncontrolling interest	49	22	5,643
Contribution by redeemable noncontrolling interest	55,377	0	0
Dividends paid to noncontrolling interest	(3,852)	(27,458)	0
Receipt of loans	1,132,507	874,100	571,048
Repayment of loans	(914,319)	(912,140)	(493,250)
Net cash flows provided by (used in) financing activities	752,986	(65,476)	83,441
EFFECT OF EXCHANGE RATE CHANGES ON FOREIGN CURRENCY CASH, CASH EQUIVALENTS AND RESTRICTED CASH	2,588	9,512	(13,985)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(230,252)	(105,809)	23,476
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR	1,212,836	1,318,645	1,295,169
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR	982,584	1,212,836	1,318,645
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	17,610	13,192	22,216
Interest paid	25,240	21,487	19,451
Reconciliation to Consolidated Balance Sheets:
Cash, cash equivalents and restricted cash	$ 982,584	$ 1,318,645	$ 1,295,169

Description of Business

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. DESCRIPTION OF BUSINESS

Enstar Group Limited ("Enstar") is a Bermuda-based holding company, formed in 2001. Enstar is a multi-faceted insurance group that offers innovative capital release solutions and specialty underwriting capabilities through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Our ordinary shares are listed on the NASDAQ Global Select Market under the ticker symbol "ESGR". Unless the context indicates otherwise, the terms "Enstar," "we," "us" or "our" mean Enstar Group Limited and its consolidated subsidiaries and the term "Parent Company" means Enstar Group Limited and not any of its consolidated subsidiaries.

Our business is organized into three segments:


(i)	Non-life Run-off - This segment is comprised of the operations of our subsidiaries that are running off their property and casualty and other non-life business. It also includes our management business, which manages the run-off portfolios of third parties through our service companies.


(ii)	Atrium - Atrium Underwriters Ltd. is a managing general agent at Lloyd’s of London ("Lloyd's"), which manages Syndicate 609. Through a corporate capital vehicle, Atrium 5 Ltd., we provide 25% of the syndicate’s underwriting capacity and capital (with the balance provided by traditional Lloyd’s Names). Atrium underwrites specialist marine, energy, aerospace, non-marine and liability classes.


(iii)	StarStone - StarStone is a global specialty insurer that underwrites a diverse range of property, casualty and specialty insurance through its operations in Bermuda, the United States, the United Kingdom, and Continental Europe. Certain run-off business of StarStone is recorded in our Non-life Run-off segment.

In addition to our three reportable segments, our other activities, which do not qualify as a reportable segment, include our corporate expenses, debt servicing costs, holding company income and expenses, foreign exchange, our remaining life business and other miscellaneous items.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include our assets, liabilities and results of operations as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016. Results of operations for acquired subsidiaries are included from the date of acquisition. All significant intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount 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. Our actual results could differ materially from our estimates. Accounting policies that we believe are most dependent on assumptions and estimates are considered to be our critical accounting policies and are related to the determination of:


•	liability for losses and loss adjustment expenses ("LAE");


•	liability for policy benefits for life and annuity contracts;


•	reinsurance balances recoverable on paid and unpaid losses;


•	valuation allowances on reinsurance balances recoverable and deferred tax assets;


•	impairment charges, including other-than-temporary impairments on investment securities classified as available-for-sale, and impairments on goodwill, intangible assets and deferred charge assets;


•	gross and net premiums written and net premiums earned;


•	fair value measurements of investments;


•	fair value estimates associated with accounting for acquisitions;


•	fair value estimates associated with loss portfolio transfer reinsurance agreements for which we have elected the fair value option; and

•

redeemable noncontrolling interests.Significant Accounting Policies

(a) Premiums

Non-Life

Non-life premiums written are earned on a pro-rata basis over the period the coverage is provided. Reinsurance premiums are recorded at the inception of the policy, are based upon contractual terms and, for certain business, are estimated based on underlying contracts or from information provided by insureds and/or brokers. Changes in reinsurance premium estimates are expected and may result in adjustments in future periods. Any subsequent differences arising on such estimates are recorded as premiums written in the period in which they are determined.

Certain non-life contracts are retrospectively rated and provide for a final adjustment to the premium based on the final settlement of all losses. Premiums on such contracts are adjusted based upon contractual terms, and management judgment is involved with respect to the estimate of the amount of losses that we expect to incur. Additional premiums are recognized at the time loss thresholds specified in the contract are exceeded and are earned over the coverage period, or are earned immediately if the period of risk coverage has passed.

Life and Annuities

Prior to going into run-off, our life and annuities subsidiaries wrote life insurance, including credit life and disability insurance, term life insurance, assumed life reinsurance and annuities. We will continue to recognize premiums on term life insurance, assumed life reinsurance and credit life and disability insurance. These premiums are generally recognized as revenue when due from policyholders. The policies include contracts with fixed and guaranteed premiums and benefits. Benefits and expenses are matched with such revenue to result in the recognition of profit over the life of the contracts.

Premiums receivable

Premiums receivable represent amounts currently due and amounts not yet due on insurance and reinsurance policies. Premiums for insurance policies are generally due at inception. Premiums for reinsurance policies generally become due over the period of coverage based on the policy terms. We monitor the credit risk associated with premiums receivable, taking into consideration the impact of our contractual right to offset loss obligations or unearned premiums against premiums receivable. Amounts deemed uncollectible are charged to net earnings in the period they are determined. Changes in the estimates of premiums written will result in an adjustment to premiums receivable in the period they are determined.

Unearned premiums and prepaid reinsurance premiums

Unearned premiums represent the portion of premiums written that relate to the unexpired terms of policies in force. Premiums ceded are similarly pro-rated over the period the coverage is provided with the unearned portion being deferred as prepaid reinsurance premiums.

(b) Acquisition Costs

Acquisition costs, consisting principally of commissions and brokerage expenses and certain premium taxes and fees incurred at the time a contract or policy is issued and that vary with and are directly related to the successful efforts of acquiring new insurance contracts or renewing existing insurance contracts, are deferred and amortized over the period in which the related premiums are earned. Deferred acquisition costs are limited to their estimated realizable value by line of business based on the related unearned premiums, anticipated claims and claim expenses and anticipated investment income.

Non-life Run-off

The liability for losses and LAE in the Non-life Run-off segment includes an amount determined from reported claims and an amount, based on historical loss experience and industry statistics, for losses incurred but not reported ("IBNR") determined using a variety of actuarial methods. These estimates are continually reviewed and are necessarily subject to the impact of future changes in factors such as claim severity and frequency, changes in economic conditions including the impact of inflation, legal and judicial developments, and medical cost trends. While we believe that the amount is adequate, the ultimate liability may be in excess of, or less than, the amounts provided. Adjustments will be reflected as part of net increase or reduction in losses and LAE liabilities in the periods in which they become known. Premium and commission adjustments may be triggered by incurred losses, and any amounts are recorded in the same period that the related incurred loss is recognized.

Commutations of acquired companies’ exposures have the effect of accelerating the payout of claims compared to the probability-weighted ranges of actuarially projected cash flows that we applied when estimating the fair values of assets and liabilities at the time of acquisition. Any material acceleration of payout together with the impact of any material loss reserve savings in any period will also accelerate the amortization of fair value adjustments in that period. Gains or losses on settlement of losses and LAE liabilities by way of commutation or policy buy-back are recognized upon execution of a commutation or policy buyback with the insured or reinsured.

Our insurance and reinsurance subsidiaries also establish provisions for LAE relating to run-off costs for the estimated duration of the run-off, which are included in losses and LAE. These provisions are assessed at each reporting date, and provisions relating to future periods are adjusted to reflect any changes in estimates of the periodic run-off costs or the duration of the run-off, including the impact of any acceleration of the run-off period that may be caused by commutations. Provisions relating to the current period together with any adjustment to future run-off provisions are included in net incurred losses and LAE in the consolidated statements of earnings.

Atrium and StarStone

The reserves for losses and LAE in the Atrium and StarStone segments include reserves for unpaid reported losses and for IBNR loss reserves. The reserves for unpaid reported losses and loss expenses are established by management based on reports from brokers, ceding companies and insureds and represent the estimated ultimate cost of events or conditions that have been reported to or specifically identified by us. The reserve for IBNR losses is established by us based on actuarially determined estimates of ultimate losses and loss expenses. Inherent in the estimate of ultimate losses and loss expenses are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled. Accordingly, ultimate losses and loss expenses may differ from the amounts recorded in the consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, will be recorded in earnings in the period in which they become known. Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves established in previous calendar years.

Components of Net Incurred Losses and LAE

Included within the total net incurred losses and LAE on our consolidated statement of earnings are the following items:


•	Net losses paid: paid losses and LAE, net of related reinsurance recoveries.


•	Net change in case and LAE reserves: the change in case reserves and associated LAE, net of related reinsurance recoveries.


•	Net change in IBNR reserves: the change in IBNR reserves, net of related reinsurance recoveries.


•	Increase (reduction) in estimates of net ultimate losses: the total of net loses paid, net change in case and LAE reserves and the net change in IBNR.


•	Increase (reduction) in provisions for unallocated LAE: the net change in our provision for unallocated LAE.


•	Amortization of deferred charge assets: the amortization of the deferred charge assets associated with the retroactive reinsurance contracts which we assumed, where the estimated ultimate losses at inception were greater than the premiums received.


•	Amortization of fair value adjustments: the amortization of the fair value adjustments associated with the acquisitions of companies, where the acquired reserves and recoveries were fair valued upon acquisition.

•

Changes in fair value - fair value option: the changes in the fair value for reinsurance agreements where we have elected the fair value option. The change in fair value component includes the changes in the discounted cash flows and risk margin. The underlying net losses paid, net change in case and LAE reserves and the net change in IBNR reserves relating to these reinsurance agreements for which we have elected the fair value option is included in the appropriate line item described above.


•	Net incurred losses and LAE: the total of increase (reduction) in estimates of net ultimate losses, increase (reduction) in provisions for unallocated LAE, amortization of deferred charge assets, amortization of fair value adjustments and changes in fair value - fair value option.

(d) Policy Benefits for Life and Annuity Contracts

Policy benefits for life and annuity contracts (“policy benefits”) are calculated using the net level premium method and are derived using locked-in assumptions. Policy benefits are established and maintained at a level that we estimate will, when taken together with future premium payments and investment income expected to be earned on associated premiums, be sufficient to support all future cash flow benefit obligations and third-party servicing obligations as they become payable. We review policy benefits regularly and perform loss recognition testing based upon cash flow projections.

Since the development of the policy benefits is based upon projections of future cash flows, we are required to make assumptions for mortality, longevity and morbidity rates, lapse rates, expenses and investment income. The assumptions used to determine policy benefits are determined at the inception of the contracts, reviewed and adjusted at the point of acquisition, as required, and are locked-in throughout the life of the contract unless a premium deficiency develops. These locked-in assumptions are based on a best estimate view of experience at the time they are established and may include a provision for adverse deviation. Assumptions are established based upon a combination of historical and industry experience, when available, and management judgment. Actual results could differ from these estimates.

Policy benefit liabilities are reviewed periodically to determine whether a premium deficiency exists. Management reviews emerging experience and updates best estimate assumptions where appropriate. If existing policy benefit reserves, reduced by unamortized acquisition costs, together with the present value of future gross premiums using current best estimate assumptions, are insufficient in covering the present value of future benefits, settlement, and maintenance costs using current best estimate assumptions, a premium deficiency is deemed to exist. To remediate, unamortized acquisition costs are reduced until the premium deficiency has been eliminated. If unamortized acquisition costs have been entirely written off and a premium deficiency still exists, locked-in assumptions are revised and a charge for policy benefits is recognized.

Because of the many assumptions and estimates used in establishing policy benefits and the long-term nature of the contracts, the reserving process, while based on actuarial techniques, is inherently uncertain.

(e) Reinsurance Balances Recoverable on Paid and Unpaid Losses

Amounts billed to, and due from, reinsurers resulting from paid movements in the underlying business are calculated in accordance with the terms of the individual reinsurance contracts. Similarly, reinsurance balances recoverable on paid and unpaid losses related to our case reserves are calculated by applying the terms of any applicable reinsurance coverage to movements in the underlying case reserves. Our estimate of reinsurance balances recoverable on paid and unpaid losses related to IBNR reserves is recognized on a basis consistent with the underlying IBNR reserves.

Our reinsurance balances recoverable on paid and unpaid losses are presented net of a provision for uncollectible amounts, reflecting the amount deemed not collectible due to credit quality, collection problems due to the location of the reinsurer, contractual disputes with reinsurers over individual contentious claims, contract language or coverage issues.

(f) Investments, Cash and Cash Equivalents

Short-term investments and fixed maturity investments

Short-term investments comprise investments with a maturity greater than three months up to one year from the date of purchase. Fixed maturities comprise investments with a maturity of greater than one year from the date of purchase.

Short-term and fixed maturity investments classified as trading are carried at fair value, with realized and unrealized holding gains and losses included in net earnings and reported as net realized and unrealized gains and losses.

Short-term and fixed maturity investments classified as available-for-sale are carried at fair value, with unrealized gains and losses excluded from net earnings and reported as a separate component of accumulated other comprehensive income (loss) ("AOCI"). Realized gains and losses on sales of investments classified as available-for-sale are recognized in the consolidated statements of earnings.

The costs of short-term and fixed maturity investments are adjusted for amortization of premiums and accretion of discounts, recognized using the effective yield method and included in net investment income. For mortgage-backed and asset-backed investments, and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and reviewed on a regular basis.

Investment purchases and sales are recorded on a trade-date basis. Realized gains and losses on the sale of investments are based upon specific identification of the cost of investments.

Other-Than-Temporary Impairments

Fixed maturity investments classified as available-for-sale are reviewed quarterly to determine if they have sustained an impairment of value that is, based on our judgment, considered to be other than temporary. The process includes reviewing each fixed maturity investment that is below cost and: (1) determining if we have the intent to sell the fixed maturity investment; (2) determining if it is more likely than not that we will be required to sell the fixed maturity investment before its anticipated recovery; and (3) assessing whether a credit loss exists, that is, whether we expect that the present value of the cash flows expected to be collected from the fixed maturity investment is less than the amortized cost basis of the investment.

In assessing whether it is more likely than not that we will be required to sell a fixed maturity investment before its anticipated recovery, we consider various factors including our future cash flow requirements, legal and regulatory requirements, the level of our cash, cash equivalents, short-term investments and fixed maturity investments available-for-sale in an unrealized gain position, and other relevant factors.

In evaluating credit losses, we consider a variety of factors in the assessment of a fixed maturity investment including: (1) the time period during which there has been a significant decline below cost; (2) the extent of the decline below cost and par; (3) the potential for the investment to recover in value; (4) an analysis of the financial condition of the issuer; (5) the rating of the issuer; and (6) failure of the issuer of the investment to make scheduled interest or principal payments.

If we conclude that an investment is other-than-temporarily impaired ("OTTI"), then the difference between the fair value and the amortized cost of the investment is presented as an OTTI charge in the consolidated statements of earnings, with an offset for any non-credit related loss component of the OTTI charge to be recognized in other comprehensive income. Accordingly, only the credit loss component of the OTTI amount would have an impact on our earnings.

Equities

We have investments in publicly traded equities, which are classified as trading, and we also have investments in privately held equities. Our equity investments are carried at fair value with realized and unrealized holding gains and losses included in net earnings and reported as net realized and unrealized gains and losses.

Other investments, at fair value

Other investments include investments in limited partnerships and limited liability companies (collectively "private equities") and fixed income funds, hedge funds, equity funds, private credit funds and collateralized loan obligation ("CLO") equity funds that carry their investments at fair value, as well as direct investments in CLO equities. These other investments are stated at fair value, which ordinarily will be the most recently reported net asset value as advised by the fund manager or administrator. Many of our fund investments publish net asset values on a daily basis and provide daily liquidity; others report on a monthly basis. Private equities typically report quarterly. The change in fair value is included in net realized and unrealized gains and losses on investments and recognized in net earnings.

Other investments, at cost

During 2018, we sold our investments in life settlement contracts, which were recorded as other investments, at cost and accounted for under the investment method whereby we recognized our initial investment in the life settlement contracts at the transaction price plus all initial direct external costs. Continuing costs to keep the policy in force, primarily life insurance premiums, increase the carrying amount of the investment. We recognized income on individual investments in life settlements when the insured died, at an amount equal to the excess of the investment proceeds over the carrying amount of the investment at that time.

The investments were subject to quarterly impairment review on a contract-by-contract basis. An investment in life settlements was considered impaired if the undiscounted cash flows resulting from the expected proceeds from the investment in life settlements were not sufficient to recover the current carrying amount for the investment in life settlements plus anticipated undiscounted future premiums and other capitalizable future costs, if any. Impaired contracts were written down to their estimated fair value, which was determined on a discounted cash flow basis using current market longevity assumptions and market yields, with any impairment charges included within net realized and unrealized gains (losses).

Equity method investments

Investments in which the Company has significant influence over the operating and financial policies of the investee are classified as equity method investments and are accounted for using the equity method of accounting. In applying the equity method of accounting, investments are initially recorded at cost and are subsequently adjusted based on the Company's proportionate share of net income or loss of the investee. Adjustments are based on the most recently available financial information from the investee. Changes in the carrying value of such investments are recorded in our consolidated statements of earnings as earnings (losses) from equity method investments. Any decline in the value of our equity method investments considered by management to be other-than-temporary is reflected in our consolidated statements of earnings in the period in which it is determined.

Cash and cash equivalents

Cash equivalents includes money market funds, fixed interest deposits and all highly liquid debt instruments purchased with an original maturity of three months or less.

(g) Funds Held

(h) Fees and Commission Income

Fees and commission income primarily includes profit commissions earned from managed Lloyd's syndicates as well as fees earned under fronting and consulting arrangements with third- party clients, which are recorded on an accrual basis.

(i) Foreign Exchange

Other foreign currency assets and liabilities that are considered monetary items are translated at exchange rates in effect at the balance sheet date. Foreign currency revenues and expenses are translated at transaction date exchange rates. These exchange gains and losses are recognized in net earnings.

(j) Share-based Compensation

We have primarily used three types of share-based compensation: (i) restricted shares, restricted share units and performance share units, (ii) cash-settled stock appreciation rights ("SARs") and (iii) shares issued under our employee share purchase plans. With the exception of SARs and the incentive plan awards issued to certain employees of Atrium, our share-based compensation awards qualify for equity classification. The fair value of the compensation cost is measured at the grant date and is expensed over the service period of the award. The SARs and the Atrium incentive plan awards are classified as liability awards. Liability classified awards are recorded at fair value within other liabilities in the consolidated balance sheet with changes in fair value relating to the vested portion of the award recorded within general and administrative expenses in the consolidated statements of earnings.

(k) Derivative Instruments

We utilize derivative instruments in our foreign currency risk management strategy and recognize all derivatives as either assets or liabilities in the consolidated balance sheets and carry them at the fair value of the specific instrument utilized. Changes in the fair value as well as realized gains or losses on derivative instruments are recognized in net earnings if they are not designated as qualifying hedging instruments or if the criteria for establishing a perfectly effective designated hedging relationship for our net investment hedges has not been met. However, if a designated net investment hedge is deemed to be perfectly effective, then we recognize the changes in the fair value of the underlying hedging instrument in accumulated other comprehensive income (loss) until the application of hedge accounting is discontinued. Any cumulative gains or losses arising on designated net investment hedges are deferred in accumulated other comprehensive income (loss) until the cumulative translation adjustment ("CTA") from the underlying hedged net investment is recognized in net earnings due to a disposal, deconsolidation or substantial liquidation.

Certain of our funds held arrangements also contain embedded derivatives as described above, which are carried at fair value. In addition, we also hold equity call options as part of our investment strategy.

(l) Income Taxes

We recognize the benefit relating to tax positions only where the position is more likely than not to be sustained assuming examination by tax authorities. A recognized tax benefit is measured as the largest amount that is greater than 50 percent likely of being realized. A liability or other adjustment is recognized for any tax benefit (along with any interest and penalty, if applicable) claimed in a tax return in excess of the amount allowed to be recognized in the financial statements under U.S. GAAP. Any changes in amounts recognized are recorded in the period in which they are determined.

(m) Earnings Per Share

Basic earnings per share is based on the weighted average number of ordinary shares outstanding and excludes potentially dilutive securities such as restricted shares, restricted share units, warrants, options and convertible securities. Diluted earnings per share is based on the weighted average number of ordinary and ordinary share equivalents outstanding calculated using the treasury stock method for all potentially dilutive securities. When the effect of dilutive securities would be anti-dilutive, these securities are excluded from the calculation of diluted earnings per share.

(n) Acquisitions, Goodwill and Intangible Assets

The key assumptions used by us and, we believe, by other run-off market participants in the fair valuation of acquired companies are (i) the projected payout, timing and amount of claims liabilities; (ii) the related projected timing and amount of reinsurance collections; (iii) an appropriate discount rate, which is applied to determine the present value of the future cash flows; (iv) the estimated unallocated LAE to be incurred over the life of the run-off; (v) the impact of any accelerated run-off strategy; and (vi) an appropriate risk margin.

The difference between the original carrying value of reinsurance liabilities and reinsurance assets acquired at the date of acquisition and their fair value is recorded as an intangible asset or other liability, which we refer to as the fair value adjustment ("FVA"). The FVA is amortized over the estimated payout period of outstanding losses and loss expenses acquired. To the extent the actual payout experience after the acquisition is materially faster or slower than anticipated at the time of the acquisition, there is an adjustment to the estimated ultimate loss reserves, or there are changes in bad debt provisions or in estimates of future run-off costs following accelerated payouts, then the amortization of the FVA is adjusted to reflect such changes.

The difference between the fair value of net assets acquired and the purchase price is recorded as a goodwill asset or as a gain from bargain purchase in the consolidated statements of earnings. Goodwill is established initially upon acquisition and assessed at least annually for impairment. If the goodwill asset is determined to be impaired it is written down in the period in which the determination is made.

Intangible assets represent the fair value adjustments related to unpaid losses and LAE, reinsurance balances recoverable on paid and unpaid losses and policy benefits for life and annuity contracts along with the intangible assets arising from the acquisitions of Atrium and StarStone. Definite-lived intangible assets are amortized over their useful lives. Amortization of intangible assets is recognized in the consolidated statement of earnings. Indefinite-lived intangible assets are not subject to amortization. The carrying values of intangible assets are reviewed for indicators of impairment at least annually. Impairment is recognized if the carrying values of the definite-lived intangible assets are not recoverable from their undiscounted cash flows and are measured as the difference between the carrying value and the fair value.

(o) Retroactive Reinsurance

Retroactive reinsurance policies provide indemnification of losses and LAE with respect to past loss events. In our Non-life Run-off segment we use the balance sheet accounting approach for assumed loss portfolio transfers, whereby at the inception of the contract there are no premiums or losses recorded in earnings.

In our Non-life Run-off and StarStone segments we have ceded business to KaylaRe Ltd., a wholly-owned reinsurer, as described in Note 21 - "Related Party Transactions". The reinsurance ceded by StarStone to KaylaRe Ltd. during the year ended December 31, 2016 was mostly recognized as retroactive reinsurance, except for the unearned ceded premium as at December 31, 2016 which was recognized as prospective reinsurance. The reinsurance ceded by StarStone to KaylaRe Ltd. from January 1, 2017 was recognized as prospective reinsurance.

Deferred Charge Assets

If, at the inception of a Non-life Run-off retroactive reinsurance contract, the estimated undiscounted ultimate losses payable are in excess of the premiums received, a deferred charge asset is recorded for the excess. The premium consideration that we charge the ceding companies may be lower than the undiscounted estimated ultimate losses payable due to the time value of money. After receiving the premium consideration in full from our cedents at the inception of the contract, we invest the premium received over an extended period of time, thereby generating investment income. We expect to generate profits from these retroactive reinsurance policies when taking into account the premium received and expected investment income, less contractual obligations and expenses. Deferred charge assets, recorded in other assets, are amortized over the estimated claim payment period of the related contract with the periodic amortization reflected in earnings as a component of losses and LAE. Deferred charge assets amortization is adjusted at each reporting period to reflect new estimates of the amount and timing of remaining loss payments. Changes in the estimated amount and the timing of payments of unpaid losses may have an effect on the unamortized deferred charge assets and the amount of periodic amortization. Deferred charge assets are assessed at each reporting period for impairment. If the asset is determined to be impaired, it is written down in the period in which the determination is made.

Fair Value Option

In our Non-life Run-off segment, we have elected to apply the fair value option for certain loss portfolio transfer reinsurance transactions. This is an irrevocable election that applies to all balances under the insurance contract, including funds held assets, reinsurance balances recoverable on paid and unpaid losses, and the liability for losses and loss adjustment expenses.

We use an internal model to calculate the fair value of the liability for losses and loss adjustment expenses and the reinsurance balances recoverable on paid and unpaid losses asset. Note 11 - "Fair Value Measurements" describes the internal model, including the observable and unobservable inputs used in the model.

(p) Redeemable Noncontrolling Interest

In connection with the acquisitions of Arden, Atrium and StarStone, certain subsidiaries issued shares to noncontrolling interests. These shares provide certain redemption rights to the holders, which may be settled in our own shares or cash or a combination of cash and shares, at our option. Redeemable noncontrolling interest with redemption features that are not solely within our control are classified within temporary equity in the consolidated balance sheets and carried at the redemption value, which is fair value. Change in the fair value is recognized through retained earnings as if the balance sheet date were also the redemption date.

(q) Internal-use Software

Direct internal and external costs to acquire or develop internal-use software have been capitalized. We only capitalize costs incurred after the preliminary project stage has been completed, and when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used to perform the functions intended. Capitalized costs related to internal-use software are amortized on a straight-line basis over the estimated useful lives of the assets. These capitalized costs are also assessed for impairment when impairment indicators exist.

(r) Held-for-sale Business and Discontinued Operations

We report a business as held-for-sale when certain criteria are met, which include (1) management either approved the sale or is in the process of obtaining approval to sell the business and is committed to a formal plan to sell the business, (2) the business is available for immediate sale in its present condition, (3) the business is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (4) the sale is anticipated to occur during the next 12 months, among other specified criteria. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less costs to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized. Assets and liabilities related to the businesses classified as held-for-sale are separately reported in our Consolidated Balance Sheets beginning in the period in which the business is classified as held-for-sale. Refer to Note 5 for further information regarding our held-for-sale business. The Pavonia business was also classified as a discontinued operation whose results were aggregated and presented within one line in the consolidated statements of earnings for periods prior to its sale.New Accounting Standards Adopted in 2018

Accounting Standards Update ("ASU") 2017-09, Stock Compensation - Scope of Modification Accounting

In May 2017, the Financial Accounting Standards Board (the "FASB") issued ASU 2017-09, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification ("ASC") 718 - Compensation - Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The adoption of this guidance did not have any impact on our consolidated financial statements and disclosures.

ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

In March 2017, the FASB issued ASU 2017-07, which amends the requirements in ASC 715 - Compensation - Retirement Benefits, related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU also requires that only the service-cost component of the net benefit cost is eligible for capitalization, which is a change from prior practice, under which entities capitalized the aggregate net benefit cost when applicable. The adoption of this guidance did not have any impact on our consolidated financial statements and disclosures.

ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

In February 2017, the FASB issued ASU 2017-05 to clarify the scope of the Board’s guidance on the derecognition of nonfinancial assets (ASC 610-20) as well as the accounting for partial sales of nonfinancial assets. The ASU conforms the derecognition of nonfinancial assets with the model for transactions in the revenue standard, ASC 606. The ASU clarifies that ASC 610-20 applies to the derecognition of all nonfinancial assets and in-substance nonfinancial assets. The ASU also requires an entity to derecognize the nonfinancial asset or in-substance nonfinancial asset in a partial sale transaction when (1) the entity ceases to have a controlling financial interest in a subsidiary pursuant to ASC 810, and (2) control of the asset is transferred in accordance with ASC 606. The adoption of this guidance did not have any impact on our consolidated financial statements and disclosures.

ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU 2016-16, which requires immediate recognition of the tax consequences of many intercompany asset transfers other than inventory. The adoption of this guidance did not have any impact on our consolidated financial statements and disclosures.

ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments

In August 2016, the FASB issued ASU 2016-15, which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. The adoption of this guidance did not have any impact on our consolidated financial statements and disclosures.

ASUs 2016-01 and 2018-03, Recognition and Measurement of Financial Instruments

In January 2016, the FASB issued ASU 2016-01, which amends the guidance on the classification and measurement of financial instruments. Although the ASU retains many of the current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities, and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.

In February 2018, the FASB also issued ASU 2018-03, which clarifies that entities should use a prospective transition approach only for equity securities they elect to measure using the new measurement alternative. The amendments also clarify that an entity that voluntarily discontinues using the measurement alternative for an equity security without a readily determinable fair value must measure that security and all identical or similar investments of the same issuer at fair value. Under this guidance, this election is irrevocable and will apply to all future purchases of identical or similar investments of the same issuer. The amendments also clarify other aspects of ASU 2016-01 regarding how to apply the measurement alternative and the presentation requirements for financial liabilities measured under the fair value option. The adoption of this guidance was contingent on the adoption of ASU 2016-01.

We adopted ASU 2016-01 as amended by ASU 2018-03 on January 1, 2018 using the modified retrospective approach and recorded a cumulative-effect adjustment of $1.6 million to reduce opening retained earnings for certain of our other investments that were previously classified as available-for-sale securities and for which changes in fair value were previously included in accumulated other comprehensive income.

ASUs 2014-09, 2016-08, 2016-10 and 2016-12, Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU applies to all contracts with customers except those that are within the scope of other topics within the FASB's codification, including ASC 944 - Financial Services - Insurance, ASC 320 - Investments - Debt Securities, ASC 321 - Investments - Equity Securities, ASC 323 - Investments - Equity Method and Joint Ventures and ASC 825 - Financial Instruments. However, while contracts within the scope of ASC 944 are excluded from the scope of the ASU, certain insurance-related contracts are in scope, for example contracts under which service providers charge their customers fixed fees in exchange for an agreement to provide services for an uncertain future event. Certain of the ASU’s provisions also apply to transfers of non-financial assets and include guidance on recognition and measurement. Subsequently, the FASB issued ASUs 2016-08, 2016-10 and 2016-12 that either made targeted amendments to or clarified the implementation of ASU 2014-09.

We adopted ASU 2014-09 and the related amendments on January 1, 2018 using the modified retrospective method with prior periods not being restated. The adoption of this guidance and the related amendments did not have a material impact on our consolidated financial statements and related disclosures, since substantially all of our revenues are from sources that are within the scope of other FASB topics, primarily ASC 944, ASC 320, ASC 321, ASC 323 and ASC 825, and therefore are excluded from the scope of the revenue recognition standard.Recently Issued Accounting Pronouncements Not Yet Adopted

ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities

In October 2018, the FASB issued ASU 2018-17, which clarifies that when determining whether a decision-making fee is a variable interest, a reporting entity should consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety, as currently required in U.S. GAAP. This amendment will (1) likely result in more decision makers not having a variable interest through their decision-making arrangements and (2) create alignment between determining whether a decision-making fee is a variable interest and determining whether a reporting entity within a related party group is the primary beneficiary of a variable interest entity ("VIE"). The ASU is effective for interim and annual reporting periods beginning after December 15, 2019, although early adoption is permitted. All entities are required to apply this guidance retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. While some of our subsidiaries are involved in certain decision-making arrangements for which they earn fees that are considered variable interests, they do not meet the primary beneficiary definition under the VIE guidance with respect to these arrangements. Therefore, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and the related disclosures.

ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurements

In August 2018, the FASB issued ASU 2018-13, which amended the fair value measurement guidance in ASC 820 - Fair Value Measurement, by removing and modifying certain existing disclosure requirements, while also adding new disclosure requirements. The ASU is effective for interim and annual reporting periods beginning after December 15, 2019, although early adoption is permitted, with the amendments being applied either prospectively or retrospectively, as specified in the ASU. In addition, an entity may elect to early adopt the removal or modification of disclosures immediately and delay the adoption of the new disclosure requirements until the effective date. We are currently assessing the impact of adopting this guidance however we do not expect the new or modified disclosures to have a material impact on our consolidated financial statements.

ASU 2018-12, Targeted Improvements to the Accounting for Certain Long-Duration Insurance Contracts

In August 2018, the FASB issued ASU 2018-12, which amends the accounting and disclosure model for certain long-duration insurance contracts under U.S GAAP. The goal of the amendments in this ASU is to improve the following aspects of financial reporting related to long-duration insurance contracts: (1) measurement of the liability for future policy benefits related to non-participating traditional and limited-payment contracts, (2) measurement and presentation of market risk benefits, (3) amortization of deferred acquisition costs, and (4) presentation and disclosures. The ASU is effective for interim and annual reporting periods beginning after December 15, 2020, although early adoption is permitted. Once the transfer of our remaining life insurance policies from our subsidiary Alpha Insurance SA ("Alpha") to Monument Insurance Group Limited ("Monument") is completed, as discussed in Note 12 - "Policy Benefits for Life Contracts", we will only have de minimis exposures relating to long duration insurance contracts in our consolidated subsidiaries. Therefore, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures.

ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, which gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income (“AOCI”) that are deemed stranded in AOCI as a result of the Tax Cuts and Jobs Act (the "Tax Act") enacted in the United States at the end of 2017. The amendments in this guidance eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. The ASU is effective for interim and annual reporting periods beginning after December 15, 2018 but early adoption is permitted in any interim or annual period for which financial statements have not yet been issued. Entities also have the option of applying the ASU either (1) in the period of adoption or (2) retrospectively to each period in which the income tax effects of the Tax Act related to items in AOCI, are recognized. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures.

ASUs 2016-13 and 2018-19, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, which is codified in ASC 326, amending the guidance on the impairment of financial instruments and significantly changing how entities measure credit losses for most financial assets and certain other financial instruments including reinsurance balances recoverable on paid and unpaid losses that are not measured at fair value through net income. The ASU will replace the existing “incurred loss” approach, with an “expected loss” model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount under the existing OTTI model. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. The ASU is effective for interim and annual reporting periods beginning after December 15, 2019. In November 2018, the FASB also issued ASU 2018-19 covering targeted improvements to ASU 2016-13, which clarifies that receivables arising from operating leases are not within the scope of ASC 326-20 and that instead, the impairment of such receivables should be accounted for in accordance with ASC 842 - Leases.

We expect to adopt ASU 2016-13 and the related amendments on January 1, 2020 using the modified retrospective approach required by the standard. Upon adoption of the standard, the OTTI approach we currently use for our available-for-sale securities whereby any credit losses are presented as write-downs on individual securities will be replaced by an approach whereby any credit losses are instead presented as an allowance against each security. This revised approach records the full effect of reversals of any credit losses in current period earnings, compared to current U.S. GAAP which amortizes the reversal of credit losses over the lifetime of the security. The length of time an available for sale security has been in an unrealized loss position will no longer be considered in determining whether to record a credit loss. In addition, the historical and implied volatility of the fair value of an available for sale security and recoveries or declines in fair value after the balance sheet date will no longer be considered when making a determination of whether a credit loss exists. For our reinsurance balances recoverable on paid and unpaid losses, the ASU will require us to determine a provision for credit losses associated with our reinsurers based on an “expected loss” approach which will likely differ from the provisions for uncollectible reinsurance balances recoverable on paid and unpaid losses that we have currently recorded, based on the “incurred loss” approach under existing guidance.

We are continuing to review all of our financial instruments as well as assets that are subject to credit risk, primarily our reinsurance balances recoverable and available-for-sale debt securities to determine the provisions for credit losses on the instruments and to quantify the impact of adopting the “expected loss” approach required by the ASU. While we anticipate an increase in our allowances for credit losses for the financial instruments and assets that are within the scope of the ASU given the objective of the new guidance, the magnitude of any increase will depend largely on the composition of our investment portfolio and the reinsurance balances recoverable, in addition to the prevailing economic conditions and forecasts at the time of our adoption of the ASU.

ASUs 2016-02, 2018-10 and 2018-11, Leases

In February 2016, the FASB issued ASU 2016-02, which is codified in ASC 842, amending the guidance on the classification, measurement and disclosure of leases for both lessors and lessees. The ASU requires lessees to recognize a right-of-use asset and an offsetting lease liability on the balance sheet and to disclose qualitative and quantitative information about leasing arrangements. Subsequently, in July 2018, the FASB issued ASU 2018-10, which clarifies how to apply certain aspects of ASC 842. The amendments in the ASU address a number of issues in the new leases guidance, including (1) the rate implicit in the lease, (2) impairment of the net investment in the lease, (3) lessee reassessment of lease classification, (4) lessor reassessment of lease term and purchase options, (5) variable payments that depend on an index or rate, and (6) certain transition adjustments.

In July 2018, the FASB also issued ASU 2018-11, which adds a transition option for all entities and a practical expedient only for lessors to ASU 2016-02. The transition option, which we elected on adoption of the guidance, allows entities to choose not to apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can instead opt to continue to apply the legacy guidance in ASC 840 - Leases, including its disclosure requirements, in the comparative periods presented in the year they adopt the new leases standard. This means that entities that elect this option will only provide annual disclosures for the comparative periods because ASC 840 does not require interim disclosures. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The practical expedient provides lessors with an option to not separate the non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the revenue recognition standard in ASC 606 if the associated non-lease components are the predominant components.

We adopted the new leasing standard and the related amendments on January 1, 2019 using the modified retrospective transition method as required by the standard, and based on the detailed analysis of our operating lease arrangements, we will recognize a right-of-use asset and an offsetting lease liability of approximately $65.0 million on our consolidated balance sheet, relating primarily to office space and facilities that we have leased to conduct our business operations.

Acquisitions

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Acquisitions

3. ACQUISITIONS2018Maiden Re North America

Overview

On December 27, 2018, we completed the acquisition of Maiden Reinsurance North America, Inc. (“Maiden Re North America”) from a subsidiary of Maiden Holdings, Ltd. ("Maiden Holdings"). Maiden Re North America is a diversified insurance company domiciled in Missouri that provides property and casualty treaty reinsurance, casualty facultative reinsurance and accident and health treaty reinsurance. As part of the transaction, we also novated and assumed certain reinsurance agreements from Maiden Holdings' Bermuda reinsurer, including certain reinsurance agreements with Maiden Re North America. Refer to Note 4 - "Significant New Business" for additional information relating to these reinsurance agreements. We will operate the business in run-off. The renewal rights were not included in the transaction.

Purchase Price

The total cash paid in the transaction was $286.4 million, subject to certain post-closing adjustments. The components of the consideration paid to acquire all of the outstanding shares of Maiden Re North America were as follows:



Cash paid	$	286,375
Adjustment for the fair value of preexisting relationships	10,273
Total purchase price	$	296,648
Net assets acquired at fair value (excluding preexisting relationships)	$	296,648
Excess of purchase price over fair value of net assets acquired	$	—

The purchase price was allocated to the acquired assets and liabilities of Maiden Re North America based on their estimated fair values at the acquisition date.

Adjustment for the Fair Value of Preexisting Relationships

Enstar had contractual preexisting relationships with Maiden Re North America, which were deemed to be effectively settled at fair value on the acquisition date. The differences between the carrying value and the fair value of the preexisting relationships was included as part of the purchase price in accordance with ASC 805 - Business Combinations. The fair value of the balances relating to preexisting reinsurance relationships with Maiden Re North America were deemed to equal their carrying values given their short-term nature and the expectation that they would all be settled within the next twelve months.

Fair Value of Net Assets Acquired and Liabilities Assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed (excluding preexisting relationships and net of the intercompany cession assumed as part of the transaction) in the Maiden Re North America transaction at the acquisition date, which have all been allocated to the Non-life Run-off segment.



ASSETS
Fixed maturities, trading, at fair value	$	1,098,593
Short-term investments, trading, at fair value	3,508
Total investments	1,102,101
Cash and cash equivalents	12,035
Restricted cash and cash equivalents	26,871
Premiums receivable	138,378
Prepaid reinsurance premiums	3,257
Reinsurance balances recoverable	87,018
Other assets	96,669
TOTAL ASSETS	$	1,466,329
LIABILITIES
Losses and LAE	$	1,027,367
Unearned premiums	85,696
Other liabilities	56,618
TOTAL LIABILITIES	1,169,681
NET ASSETS ACQUIRED AT FAIR VALUE	$	296,648

Maiden Re North America's Results Included in Condensed Consolidated Statement of Earnings

The table below summarizes the results of the Maiden Re North America operations, which are included in our condensed consolidated statement of earnings from the acquisition date to December 31, 2018:



Net investment income	$	675
Net unrealized gains	3,749
General and administrative expenses	(435		)
Net earnings	$	3,989

KaylaRe

Overview

On May 14, 2018, the Company acquired all of the outstanding shares and warrants of KaylaRe Holdings, Ltd. ("KaylaRe"). In consideration for the acquired shares and warrants of KaylaRe, the Company issued an aggregate of 2,007,017 ordinary shares to the shareholders of KaylaRe, comprising 1,501,778 voting ordinary shares and 505,239 Series E non-voting ordinary shares. Effective May 14, 2018, we consolidated KaylaRe into our consolidated financial statements, and any balances between KaylaRe and Enstar are now eliminated upon consolidation.

Refer to Note 20 - "Related Party Transactions" for additional information relating to KaylaRe.

Purchase Price

The components of the consideration paid to acquire all of the outstanding shares and warrants of KaylaRe were as follows:



Fair value of Enstar ordinary shares issued	$	414,750
Fair value of previously held equity method investment	336,137
Adjustment for the fair value of preexisting relationships	37,169
Total purchase price	$	788,056
Net assets acquired at fair value (excluding preexisting relationships)	$	746,320
Excess of purchase price over fair value of net assets acquired	$	41,736

The purchase price was allocated to the acquired assets and liabilities of KaylaRe based on their estimated fair values at the acquisition date. We recognized goodwill of $41.7 million on the transaction, primarily attributable to (i) the capital synergies from integrating KaylaRe into our group capital structure, (ii) investment management capabilities on a total return basis, and (iii) the incremental acquired capital to be utilized for future non-life run-off transactions.

Fair Value of Enstar Ordinary Shares Issued

The fair value of the Enstar ordinary shares issued was based on the closing price of Enstar's voting ordinary shares of $206.65 as at May 14, 2018, the date the transaction closed. Enstar's non-voting ordinary shares are economically equivalent to Enstar's voting ordinary shares.



Number of Enstar ordinary shares issued	2,007,017
Closing price of Enstar voting ordinary shares as of May 14, 2018	$	206.65
Fair value of Enstar ordinary shares issued to shareholders of KaylaRe	$	414,750

Fair Value of Previously Held Equity Method Investment

Prior to the close of the transaction, Enstar held a 48.2% interest in KaylaRe, which was accounted for as an equity method investment in accordance with ASC 323 - Investments - Equity Method and Joint Ventures. The acquisition of the remaining 51.8% equity interest in KaylaRe was considered a step acquisition, whereby the Company remeasured the previously held equity method investment to fair value. The Company considered multiple factors in determining the fair value of the previously held equity method investment, including (i) the price negotiated with the selling shareholders for the 51.8% equity interest in KaylaRe, (ii) recent market transactions for similar companies, and (iii) current trading multiples for comparable companies. Based on this analysis, a valuation multiple of 1.05 to KaylaRe's carrying book value was determined to be appropriate to remeasure the previously held equity method investment at fair value. This resulted in the recognition of a gain of $16.0 million on completion of the step acquisition of KaylaRe, which was recorded in other income (loss) for the three and six months ended June 30, 2018.



Carrying value of previously held equity method investment prior to the close of the transaction	$	320,130
Price-to-book multiple	1.05
Fair value of previously held equity method investment prior to the close of the transaction	$	336,137

Gain recognized on remeasurement of previously held equity method investment to fair value	$	16,007

Adjustment for the Fair Value of Preexisting Relationships

Enstar had contractual preexisting relationships with KaylaRe, which were deemed to be effectively settled at fair value on the acquisition date. The differences between the carrying value and the fair value of the preexisting relationships was included as part of the purchase price in accordance with ASC 805 - Business Combinations. The fair value of the balances relating to preexisting reinsurance relationships with KaylaRe was determined using a discounted cash flow approach and, where applicable, consideration was given to stated contractual settlement provisions, when determining the loss to be recorded on the deemed settlement of these preexisting relationships. The fair values of the balances arising from the non-reinsurance preexisting relationships with KaylaRe were deemed to equal their carrying values given their short-term nature and the expectation that they would all be settled within the next twelve months.

As a result of effectively settling all the contractual preexisting relationships with KaylaRe, the Company recognized a loss of $15.6 million, which was recorded in other income (loss) in the three and six months ended June 30, 2018, as summarized below:



ASSETS	Carrying value			Fair value			Loss on deemed settlement
Funds held by reinsured companies	$	386,793		$	386,793		$	—
Deferred acquisition costs/Value of business acquired	33,549			40,268			6,719
TOTAL ASSETS	420,342			427,061			6,719
LIABILITIES
Losses and LAE	339,747			333,205			(6,542		)
Unearned premiums	105,602			105,602			—
Insurance and reinsurance balances payable	25,897			23,559			(2,338		)
Other liabilities	1,864			1,864			—
TOTAL LIABILITIES	473,110			464,230			(8,880		)
NET ASSETS (LIABILITIES)	$	(52,768	)	$	(37,169	)	$	15,599

Fair Value of Net Assets Acquired and Liabilities Assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed (excluding preexisting relationships) in the KaylaRe transaction at the acquisition date, which have all been allocated to the Non-life Run-off segment.



ASSETS
Fixed maturities, trading, at fair value	$	126,393
Other investments, at fair value	626,476
Total investments	752,869
Cash and cash equivalents	5,657
Premiums receivable	10,965
Deferred acquisition costs	275
Other assets	614
TOTAL ASSETS	$	770,380
LIABILITIES
Losses and LAE	$	4,059
Unearned premiums	10,984
Insurance and reinsurance balances payable	13
Other liabilities	9,004
TOTAL LIABILITIES	24,060
NET ASSETS ACQUIRED AT FAIR VALUE	$	746,320

KaylaRe's Results Included in Consolidated Statement of Earnings

The table below summarizes the results of the KaylaRe operations, which are included in our consolidated statement of earnings from the acquisition date to December 31, 2018:



Premiums earned	$	10,188
Incurred losses and LAE	(9,190		)
Acquisition costs	(332		)
Underwriting income	666
Net investment income	1,972
Net unrealized gains	(6,621		)
Net loss	$	(4,556	)

Supplemental Pro Forma Financial Information (Unaudited)

The following unaudited pro forma condensed combined statement of earnings for the years ended December 31, 2018 and 2017 combines our historical consolidated statements of earnings with those of Maiden Re North America and KaylaRe, giving effect to the business combinations and related transactions as if they had occurred on January 1, 2018 and 2017, respectively. For the year ended December 31, 2018, the operating results of Maiden Re North America and KaylaRe have been included in the consolidated financial statements from each of their respective dates of acquisition. The unaudited pro forma financial information presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions of Maiden Re North America and KaylaRe and related transactions had taken place at the beginning of each period presented, nor is it indicative of future results.



				Unaudited
2018	Enstar Group Limited			Maiden Re North America			KaylaRe			Pro forma Adjustments		Enstar Group Limited - Pro forma
Total income	$	865,682		$	596,860		$	(20,554	)	$	86,842	$	1,528,830
Total expenses	(1,077,954		)	(618,719		)	(57,607		)	2,208		(1,752,072		)
Total noncontrolling interest	62,051			—			—			—		62,051
Net earnings (loss)	$	(150,221	)	$	(21,859	)	$	(78,161	)	$	89,050	$	(161,191	)

Summary of the Pro Forma Adjustments to the Pro Forma Condensed Consolidated Statement of Earnings for the Twelve Months Ended December 31, 2018 (Unaudited):



Income
(a) Share of net earnings related to KaylaRe as an equity method investee through to May 14, 2018, the date of acquisition	$	(10,503	)
(b) Loss on settlement of pre-existing relationships on acquisition of KaylaRe	15,598
(c) Revaluation gain on previously held equity method investment in KaylaRe as of the acquisition date	(16,007		)
(d) Total income for the period subsequent to the acquisition of KaylaRe already included within Enstar's full year results	97,754
	$	86,842

Expenses
(a) Total expenses for the period subsequent to the acquisition of KaylaRe already included within Enstar's full year results	$	2,208



				Unaudited
2017	Enstar Group Limited			Maiden Re North America			KaylaRe			Pro forma Adjustments			Enstar Group Limited - Pro forma
Total income	$	1,106,856		$	498,233		$	85,528		$	(16,203	)	$	1,674,414
Total expenses	(786,050		)	(498,679		)	(51,932		)	—			(1,336,661		)
Total noncontrolling interest	(20,341		)	—			—			—			(20,341		)
Net earnings (loss)	$	300,465		$	(446	)	$	33,596		$	(16,203	)	$	317,412

Summary of the Pro Forma Adjustments to the Pro Forma Condensed Consolidated Statement of Earnings for the Twelve Months Ended December 31, 2017 (Unaudited)



Income
(a) Share of net earnings related to KaylaRe as an equity method investee for the full year to December 31, 2017	(16,203	)

2016DCo

On December 30, 2016, we completed the acquisition of DCo LLC ("DCo"). DCo holds liabilities associated with personal injury asbestos claims and environmental claims arising from its legacy manufacturing operations. DCo’s assets include, amongst others, insurance rights related to coverage against these liabilities and marketable securities.

The total consideration for the transaction was $88.5 million.



Purchase price	$	88,500
Net assets acquired at fair value	$	88,500
Excess of purchase price over fair value of net assets acquired	$	—

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, recorded in our Non-life Run-off segment.



	Total
ASSETS
Short-term investments, trading, at fair value	$	22,747
Fixed maturities, trading, at fair value	61,389
Other investments, at fair value	46,589
Total investments	130,725
Cash and cash equivalents	58,430
Restricted cash and cash equivalents	1,692
Other assets - Insurance balances recoverable	133,032
Other assets	5,383
TOTAL ASSETS	329,262
LIABILITIES
Other liabilities - Asbestos related	220,496
Other liabilities	20,266
TOTAL LIABILITIES	240,762
NET ASSETS ACQUIRED AT FAIR VALUE	$	88,500

From the date of acquisition to December 31, 2016, we did not record any earnings from DCo.

Significant New Business	12 Months Ended
Significant New Business	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Significant New Business	4. SIGNIFICANT NEW BUSINESSMaiden On March 1, 2019, we entered into a Master Agreement with Maiden Holdings, Ltd. ("Maiden Holdings") and Maiden Reinsurance Ltd. (“Maiden Re Bermuda”). Under the Master Agreement, Enstar and Maiden Re Bermuda agreed to enter into an Adverse Development Cover Reinsurance Agreement (“ADC Agreement”) pursuant to which Maiden Re Bermuda will cede and Enstar will reinsure 100% of the liability of Maiden Re Bermuda, as reinsurer, under Maiden Re Bermuda’s two existing quota share agreements with certain insurance companies owned directly or indirectly by AmTrust Financial Services, Inc. (“AmTrust”) for losses incurred on or prior to December 31, 2018 in excess of a $2.44 billion retention, as such figure may be adjusted based upon Maiden’s final year end reserves for the underlying business, up to a $675 million limit. The premium payable by Maiden Re Bermuda to Enstar under the ADC Agreement is $500 million. Completion of the transaction is subject to, among other things, regulatory approvals and satisfaction of various closing conditions. The Master Agreement contains customary representations, warranties, covenants and other closing conditions. The transaction is expected to close in the first half of 2019. Effective immediately upon the signing of the Master Agreement, the parties terminated and released each other from their respective obligations under the previously disclosed Master Agreement, entered into on November 9, 2018. The previous agreement provided for the parties to enter into a retrocession agreement pursuant to which Maiden Re Bermuda would cede and Enstar would reinsure 100% of the liability of Maiden Re Bermuda, as reinsurer, under Maiden Re Bermuda’s two existing AmTrust quota share agreements for losses incurred on or prior to June 30, 2018, for a premium payable by Maiden Re Bermuda to Enstar of $2.675 billion.AmerisureOn February 15, 2019, we entered into a loss portfolio transfer reinsurance agreement with Amerisure Mutual Insurance Company ("Amerisure") and Allianz Risk Transfer (Bermuda) Limited (“ART Bermuda”). In the transaction, Amerisure has agreed to cede, and each of Enstar and ART Bermuda has agreed to severally assume, a 50% quota share of the construction defect losses incurred by Amerisure and certain of its subsidiaries on or before December 31, 2012. At closing, Amerisure would pay Enstar and ART Bermuda an aggregate premium of $125.0 million, which would be adjusted for a broker commission and paid claims and recoveries from April 1, 2018. Enstar's subsidiary would assume $60.0 million of net reserves in the transaction. Completion of the transaction, which is expected to occur in the first quarter of 2019, is subject to, among other things, regulatory approvals and satisfaction of various other customary closing conditions.AmTrust RITC TransactionsOn February 14, 2019, we entered into four RITC transactions with Syndicates 1206, 1861, 2526 and 5820, managed by AmTrust Syndicates Limited, under which we reinsured to close the 2016 and prior underwriting years. We assumed net reinsurance reserves of approximately £650.0 million (approximately $830.0 million) for cash consideration approximately equal to the net amount of reserves assumed. We have an investment in AmTrust, as described further in Note 21 - "Related Party Transactions".2018 Allianz Effective December 31, 2018, we and Allianz SE amended the January 1, 2016 reinsurance agreement between our subsidiary and Allianz SE, which related to our reinsurance of certain U.S. workers' compensation, construction defect, and asbestos, pollution and toxic tort business originally held by Fireman's Fund Insurance Company. The amendment increased the original sub-limit related to asbestos & environmental (“A&E”) liabilities in exchange for a premium of $70.0 million. This additional business is also covered by the consulting agreement that we entered into with San Francisco Reinsurance Company, an affiliate of Allianz, in connection with our 2016 transaction with Allianz discussed below.Maiden LPTOn December 27, 2018, as part of the acquisition of Maiden Re North America as discussed in Note 3 - "Acquisitions", we also novated and assumed certain reinsurance agreements from Maiden Re Bermuda, including certain affiliate reinsurance agreements with Maiden Re North America. We assumed total gross unaffiliated reserves of $72.1 million for total assets of $70.4 million on a funds held basis and recorded a deferred charge asset of $1.7 million, included in other assets.Coca-ColaOn August 1, 2018, we entered into a reinsurance transaction with The Coca-Cola Company and its subsidiaries ("Coca-Cola"), pursuant to which we reinsured certain of Coca-Cola's retention and deductible risks under its subsidiaries' U.S. workers' compensation, auto liability, general liability and product liability insurance coverage. We assumed total gross reserves of $120.8 million for cash consideration of $103.6 million and recorded a deferred charge of $17.2 million, included in other assets. We transferred the cash consideration received of $103.6 million into a trust to support our obligations under the reinsurance agreement.Zurich Australia On February 23, 2018, we entered into a reinsurance agreement with Zurich Australian Insurance Limited, a subsidiary of Zurich Insurance Group ("Zurich"), to reinsure its New South Wales Vehicle Compulsory Third Party ("CTP") insurance business. Under the agreement, which was effective as of January 1, 2018, we assumed gross loss reserves of AUD$359.4 million ($280.8 million) in exchange for consideration of AUD$343.9 million ($268.7 million). We elected the fair value option for this reinsurance contract and recorded an initial fair value adjustment of AUD$15.5 million ($12.1 million) on the assumed gross loss reserves. Refer to Note 11 - "Fair Value Measurements" for a description of the fair value process and the assumptions made. Following the initial reinsurance transaction, which transferred the economics of the CTP insurance business, we and Zurich also completed a portfolio transfer of the CTP insurance business under Division 3A Part III of Australia's Insurance Act 1973 (Cth), effective December 31, 2018, which provided legal finality for Zurich's obligations.Neon RITC TransactionOn February 16, 2018, we completed a reinsurance-to-close (“RITC”) transaction with Neon Underwriting Limited ("Neon"), under which we reinsured to close the 2015 and prior underwriting years of account (comprising underwriting years 2008 to 2015) of Neon's Syndicate 2468, with effect from January 1, 2018. We assumed gross loss reserves of£403.9 million ($546.3 million) and net loss reserves of £342.1 million ($462.6 million) relating to the portfolio in exchange for consideration of £329.1 million ($445.1 million). We elected the fair value option for this reinsurance contract and recorded initial fair value adjustments of $20.6 million and $17.5 million on the gross and net loss reserves assumed, respectively. Refer to Note 11 - "Fair Value Measurements" for a description of the fair value process and the assumptions made.Novae RITC TransactionOn January 29, 2018, we completed an RITC transaction with AXIS Managing Agency Limited, under which we reinsured to close the 2015 and prior underwriting years of account of Novae Syndicate 2007 ("Novae"), with effect from January 1, 2018. We assumed gross loss reserves of £860.1 million ($1,163.2 million) and net loss reserves of £630.7 million ($853.0 million) relating to the portfolio in exchange for consideration of £594.1 million ($803.5 million) and recorded initial fair value adjustments of $67.5 million and $49.5 million on the gross and net loss reserves assumed, respectively. Refer to Note 11 - "Fair Value Measurements" for a description of the fair value process and the assumptions made.Allianz On December 28, 2017, we entered into a reinsurance agreement with Allianz SE (“Allianz”) to reinsure a portfolio of Allianz’s run-off business, effective December 31, 2017. Pursuant to the reinsurance agreement, we reinsured 50% of certain U.S. workers' compensation, asbestos, and toxic tort business originally held by San Francisco Reinsurance Company, an affiliate of Allianz, and in the process assumed net reinsurance reserves of $81.4 million. Affiliates of Allianz retained $81.4 million of reinsurance premium as funds withheld collateral for the obligations under the reinsurance agreement and we transferred $8.1 million to a reinsurance trust to further support our obligations. We also provide ongoing consulting services with respect to the entire $162.8 million portfolio, including the 50% share retained by affiliates of Allianz.RSA On February 7, 2017, we entered into an agreement to reinsure the U.K. employers' liability legacy business of RSA Insurance Group PLC ("RSA"). Pursuant to the transaction, our subsidiary assumed gross insurance reserves of £1,046.4 million ($1,301.8 million), relating to 2005 and prior year business. Net insurance reserves assumed were £927.5 million ($1,153.9 million) and the reinsurance premium received was £801.6 million ($997.2 million). We elected the fair value option for this reinsurance contract. The initial fair value adjustment on the gross reserves was $174.1 million, and on the net reserves was $156.7 million. Refer to Note 11 - "Fair Value Measurements" for a description of the fair value process and assumptions. Following the initial reinsurance transaction, which transferred the economics of the portfolio up to the policy's limits, we and RSA are pursuing a portfolio transfer of the business under Part VII of the Financial Services and Markets Act 2000, which would provide legal finality for RSA's obligations. The transfer is subject to court, regulatory and other approvals.QBEOn January 11, 2017, we closed a transaction to reinsure multi-line property and casualty business of QBE Insurance Group Limited ("QBE"). We assumed gross reinsurance reserves of approximately $1,019.0 million (net reserves of $447.0 million) relating to the portfolio, which primarily includes workers' compensation, construction defect, and general liability discontinued lines of business. The reinsurance premium received was $403.8 million, comprised of $227.6 million in restricted cash and $176.2 million in funds held. We elected the fair value option for this reinsurance contract. The initial fair value adjustment was $180.0 million on the gross reserves and $43.2 million on the net reserves. Refer to Note 11 - "Fair Value Measurements" for a description of the fair value process and assumptions. In addition, we pledged a portion of the premium as collateral to a subsidiary of QBE, and we have provided additional collateral and a limited parental guarantee.Coca-ColaOn August 5, 2016, we entered into a reinsurance transaction with The Coca-Cola Company and its subsidiaries (“Coca-Cola”) pursuant to which we reinsured certain of Coca-Cola’s retention and deductible risks under its subsidiaries’ U.S. workers’ compensation, auto liability, general liability, and product liability insurance coverage. We assumed total gross reserves of $108.8 million, received total assets of $101.3 million and recorded a deferred charge of $7.5 million, included in other assets. We have transferred $108.8 million into a trust to support our obligations under the reinsurance agreements. We provided a limited parental guarantee, subject to an overall maximum of $27.0 million.Allianz On February 17, 2016, we entered into a reinsurance agreement with Allianz to reinsure portfolios of Allianz's run-off business. Pursuant to the reinsurance agreement, our subsidiary reinsured 50% of certain portfolios of workers' compensation, construction defect, and asbestos, pollution, and toxic tort business originally held by Fireman's Fund Insurance Company, and in the process assumed net reinsurance reserves of $1.1 billion. Affiliates of Allianz retained $1.1 billion of reinsurance premium as funds withheld collateral for the obligations of our subsidiary under the reinsurance agreement and we transferred $110.0 million to a reinsurance trust to further support our subsidiary's obligations. We have also provided a limited parental guarantee, which is subject to a maximum cap. The combined monetary total of the support offered by us through the trust and parental guarantee was initially capped at $270.0 million. In addition to the reinsurance transaction described above, we have entered into a consulting agreement with San Francisco Reinsurance Company, an affiliate of Allianz, with respect to the entire $2.2 billion portfolio, including the 50% share retained by affiliates of Allianz. RITC TransactionOn November 15, 2016, we entered into a RITC transaction of the 2007 and prior underwriting years of account of a Lloyd’s syndicate managed by Neon (formerly Marketform), under which we assumed total net insurance reserves of £121.5 million ($158.0 million) for cash consideration of an equal amount.

Divestitures, Held-For-Sale Businesses and Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Divestitures, Held-For-Sale Business and Discontinued Operations

5. DIVESTITURES, HELD-FOR-SALE BUSINESSES AND DISCONTINUED OPERATIONSPavonia

On December 29, 2017, we completed the sale of our subsidiary, Pavonia Holdings (US), Inc. (“Pavonia”), to Southland National Holdings, Inc. (“Southland”), a Delaware corporation and a subsidiary of Global Bankers Insurance Group, LLC. The aggregate purchase price was $120.0 million. We used the proceeds to make repayments under our revolving credit facility. Pavonia was a substantial portion of our previously reported Life and Annuities segment. We classified the assets and liabilities of the business to be sold as held-for-sale.

The Pavonia business qualified as a discontinued operation. The following table summarizes the components of net earnings (losses) from discontinued operations on the consolidated statements of earnings for the years ended December 31, 2017 and 2016:



	2017			2016
Operations:
INCOME
Net premiums earned	$	55,906		$	69,089
Net investment income	41,117			38,140
Net realized and unrealized gains	577			4,263
Other income	1,564			1,912
	$	99,164		$	113,404
EXPENSES
Life and annuity policy benefits	84,029			76,594
Acquisition costs	9,025			9,836
General and administrative expenses	12,813			14,416
Other expenses	(26		)	199
	$	105,841		$	101,045
EARNINGS (LOSS) BEFORE INCOME TAXES	(6,677		)	12,359
INCOME TAXES	$	(3,190	)	(396		)
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS BEFORE GAIN ON SALE	$	(9,867	)	$	11,963

Disposal:
Consideration received	120,000			—
Less: Carrying value of subsidiary	86,961			—
Less: Cumulative currency translation adjustment previously recorded in accumulated other comprehensive income	12,179			—
Gain on sale of subsidiary	$	20,860		$	—

NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS	$	10,993		$	11,963

The following table presents the cash flows of Pavonia whilst under our ownership for the years ended December 31, 2017 and 2016:



	2017		2016
Operating activities	$	75,714	$	(71,521	)
Investing activities	42,542		56,646
Change in cash of businesses held for sale	$	118,256	$	(14,875	)

The cash, cash equivalents and restricted cash carried on the balance sheet of Pavonia on December 29, 2017, the date of disposal, were $135.1 million.

A sale of one subsidiary, Pavonia Life Insurance Company of New York ("PLIC NY"), has not yet completed. As of both December 31, 2018 and 2017, included within other assets and other liabilities on our consolidated balance sheet were amounts of $24.0 million and $11.3 million, respectively, relating to PLIC NY.Laguna

On August 29, 2017, we closed the previously-announced sale of our wholly-owned subsidiary Laguna Life DAC (“Laguna”) to a subsidiary of Monument Insurance Group Limited ("Monument"), for a total consideration of €25.6 million (approximately $30.8 million). We have an equity method investment in Monument, as described further in Note 21 - "Related Party Transactions". Laguna was classified as held-for-sale during 2017 prior to its sale.

Following the closing of the sale of Laguna, we recorded a loss on sale of $16.3 million for the year ended December 31, 2017, which has been included in earnings from continuing operations before income taxes in our consolidated statement of earnings. This loss includes a cumulative currency translation adjustment balance of $6.3 million, which has been reclassified from accumulated other comprehensive income and included in earnings as a component of the loss on sale of Laguna during the year ended December 31, 2017, following the closing of the sale. Excluding the loss on sale, the net earnings (losses) relating to Laguna for the years ended December 31, 2017 and 2016 were $(1.2) million and $1.0 million, respectively. These amounts were not significant to our consolidated operations and therefore Laguna was not classified as a discontinued operation in current or prior periods.

Investments

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

6. INVESTMENTS We hold: (i) trading portfolios of fixed maturity investments, short-term investments and equities, carried at fair value; (ii) available-for-sale portfolios of fixed maturity, carried at fair value; (iii) other investments carried at either fair value or cost; (iv) equity method investments; and (v) funds held - directly managed.Fixed Maturity Investments

Asset Types

The fair values of the underlying asset types of our short-term investments and fixed maturity investments, classified as trading and available-for-sale, and the fixed maturity investments included within our funds held - directly managed balance were as follows as at December 31, 2018 and 2017:



	2018
	Short-term Investments		Trading		Available-for-sale		Funds Held - Directly Managed		Total
U.S. government and agency	$	45,885	$	389,735	$	573	$	74,052	$	510,245
U.K. government	2,275		298,356		—		—		300,631
Other government	19,064		679,525		73,185		22,036		793,810
Corporate	44,900		4,081,793		75,359		637,788		4,839,840
Municipal	—		73,856		2,480		53,929		130,265
Residential mortgage-backed	—		682,962		12		90,583		773,557
Commercial mortgage-backed	—		488,598		—		224,465		713,063
Asset-backed	1,992		553,968		—		80,521		636,481
Total fixed maturity and short-term investments	$	114,116	$	7,248,793	$	151,609	$	1,183,374	$	8,697,892



	2017
	Short-term Investments		Trading		Available-for-sale		Funds Held - Directly Managed		Total
U.S. government and agency	$	25,083	$	528,953	$	4,187	$	69,850	$	628,073
U.K. government	6,528		304,357		—		—		310,885
Other government	532		295,715		85,437		2,926		384,610
Corporate	147,766		3,215,294		115,121		695,490		4,173,671
Municipal	201		100,020		5,136		58,930		164,287
Residential mortgage-backed	—		288,713		31		29,439		318,183
Commercial mortgage-backed	101		421,447		—		211,186		632,734
Asset-backed	—		541,574		373		97,565		639,512
Total fixed maturity and short-term investments	$	180,211	$	5,696,073	$	210,285	$	1,165,386	$	7,251,955

Included within residential and commercial mortgage-backed securities as at December 31, 2018 were securities issued by U.S. governmental agencies with a fair value of $656.6 million (as at December 31, 2017: $181.8 million). Included within corporate securities as at December 31, 2018 were senior secured loans of $20.4 million (as at December 31, 2017: $68.9 million).Contractual Maturities

The contractual maturities of our short-term investments and fixed maturity investments, classified as trading and available-for-sale, and the fixed maturity investments included within our funds held - directly managed balance are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.



As of December 31, 2018	Amortized Cost		Fair Value		% of Total Fair Value
One year or less	$	338,175	$	333,037	3.8	%
More than one year through two years	646,924		630,858		7.3	%
More than two years through five years	2,037,268		1,991,016		22.9	%
More than five years through ten years	2,225,632		2,163,507		24.9	%
More than ten years	1,532,670		1,456,373		16.7	%
Residential mortgage-backed	772,457		773,557		8.9	%
Commercial mortgage-backed	729,232		713,063		8.2	%
Asset-backed	642,618		636,481		7.3	%
	$	8,924,976	$	8,697,892	100.0	%

Credit Ratings

The following table sets forth the credit ratings of our short-term investments and fixed maturity investments, classified as trading and available-for-sale, and the fixed maturity investments included within our funds held - directly managed balance as at December 31, 2018:



	Amortized Cost		Fair Value		% of Total		AAA Rated			AA Rated			A Rated			BBB Rated			Non- Investment Grade			Not Rated

U.S. government and agency	$	512,360	$	510,245	5.9	%	$	502,819		$	7,426		$	—		$	—		$	—		$	—
U.K. government	301,749		300,631		3.5	%	2,144			298,487			—			—			—			—
Other government	814,614		793,810		9.1	%	322,606			213,639			69,601			154,800			32,592			572
Corporate	5,019,018		4,839,840		55.6	%	129,059			470,571			2,306,532			1,731,398			197,822			4,458
Municipal	132,928		130,265		1.5	%	7,934			69,270			41,666			11,395			—			—
Residential mortgage-backed	772,457		773,557		8.9	%	644,418			51,729			8,658			10,495			54,727			3,530
Commercial mortgage-backed	729,232		713,063		8.2	%	487,054			70,620			77,538			60,879			7,297			9,675
Asset-backed	642,618		636,481		7.3	%	358,574			68,174			125,644			66,136			17,573			380
Total	$	8,924,976	$	8,697,892	100.0	%	$	2,454,608		$	1,249,916		$	2,629,639		$	2,035,103		$	310,011		$	18,615
% of total fair value							28.2		%	14.4		%	30.2		%	23.4		%	3.6		%	0.2		%

Unrealized Gains and Losses on Available-for-sale Fixed Maturity Investments

The amortized cost and fair values of our fixed maturity investments classified as available-for-sale were as follows as at December 31, 2018 and 2017:



2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses Non-OTTI			Fair Value
U.S. government and agency	$	576	$	—	$	(3	)	$	573
Other government	72,811		1,219		(845		)	73,185
Corporate	75,535		1,006		(1,182		)	75,359
Municipal	2,499		—		(19		)	2,480
Residential mortgage-backed	12		—		—			12
	$	151,433	$	2,225	$	(2,049	)	$	151,609



2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses Non-OTTI			Fair Value
U.S. government and agency	$	4,210	$	—	$	(23	)	$	4,187
Other government	84,776		1,249		(588		)	85,437
Corporate	113,561		2,436		(876		)	115,121
Municipal	5,146		8		(18		)	5,136
Residential mortgage-backed	31		—		—			31
Asset-backed	373		—		—			373
	$	208,097	$	3,693	$	(1,505	)	$	210,285

Gross Unrealized Losses on Available-for-sale Fixed Maturity Investments

The following tables summarize our fixed maturity and short-term investments classified as available-for-sale in a gross unrealized loss position, as at December 31, 2018 and 2017:



		12 Months or Greater					Less Than 12 Months					Total
2018		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed maturity investments, at fair value
	U.S. government and agency	$	573	$	(3	)	$	—	$	—		$	573	$	(3	)
	Other government	7,351		(345		)	11,000		(500		)	18,351		(845		)
	Corporate	11,888		(629		)	25,227		(553		)	37,115		(1,182		)
	Municipal	1,783		(18		)	283		(1		)	2,066		(19		)
	Residential mortgage-backed	12		—			—		—			12		—
Total fixed maturity investments		$	21,607	$	(995	)	$	36,510	$	(1,054	)	$	58,117	$	(2,049	)



		12 Months or Greater					Less Than 12 Months					Total
2017		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed maturity and short-term investments, at fair value
	U.S. government and agency	$	2,344	$	(16	)	$	1,842	$	(7	)	$	4,186	$	(23	)
	Other government	11,101		(373		)	20,965		(215		)	32,066		(588		)
	Corporate	9,177		(807		)	24,200		(69		)	33,377		(876		)
	Municipal	369		(5		)	3,605		(13		)	3,974		(18		)
Total fixed maturity investments		$	22,991	$	(1,201	)	$	50,612	$	(304	)	$	73,603	$	(1,505	)

As at December 31, 2018 and 2017, the number of securities classified as available-for-sale in an unrealized loss position was 88 and 96, respectively. Of these securities, the number of securities that had been in an unrealized loss position for twelve months or longer was 42 and 37, respectively.Other-Than-Temporary Impairment on Available-for-sale Fixed Maturity InvestmentsFor the years ended December 31, 2018, 2017 and 2016, we did not recognize any other-than-temporary impairment losses on our available-for-sale securities. We determined that no credit losses existed as at December 31, 2018 and 2017. A description of our other-than-temporary impairment process is included in Note 2 - "Significant Accounting Policies". There were no changes to our process in the years ended December 31, 2018 and 2017.Equity Investments

The following table summarizes our equity investments classified as trading as at December 31, 2018 and 2017:



	2018		2017
Publicly traded equity investments in common and preferred stocks	$	138,415	$	106,603
Privately held equity investments in common and preferred stocks	228,710		—
	$	367,125	$	106,603

Our publicly traded equity investments in common and preferred stocks predominantly trade on the major exchanges and are managed by our external advisors. Our publicly traded equity investments are widely diversified and there is no significant concentration in any specific industry.

The following table summarizes our other investments carried at fair value as of December 31, 2018 and 2017:



	2018		2017
Hedge funds	$	852,584	$	63,773
Fixed income funds	403,858		229,999
Equity funds	333,681		249,475
Private equity funds	248,628		289,556
CLO equities	39,052		56,765
CLO equity fund	37,260		12,840
Private credit funds	33,381		10,156
Others	9,313		828
	$	1,957,757	$	913,392

The valuation of our other investments is described in Note 11 - "Fair Value Measurements". Due to a lag in the valuations of certain funds reported by the managers, we may record changes in valuation with up to a three-month lag. We regularly review and discuss fund performance with the fund managers to corroborate the reasonableness of the reported net asset values and to assess whether any events have occurred within the lag period that would affect the valuation of the investments. The following is a description of the nature of each of these investment categories:

•

Hedge funds may invest in a wide range of instruments, including debt and equity securities, and utilize various sophisticated strategies to achieve their objectives. We invest in a mixture of fixed income, equity and multi-strategy hedge funds. The hedge funds in which we invest have various imposed lock-up periods of up to three years and redemption terms, predominantly 60 and 90 days. Certain of the hedge funds in which we invest that are past their lock up periods are currently eligible for redemption, while others, with a market value of $766.1 million, are still in the lock-up period. Investments of $71.5 million in fixed income hedge funds were subject to gates or side-pockets, where redemptions are subject to the sale of underlying investments. A gate is the ability to deny or delay a redemption request, whereas a side-pocket is a designated account for which the investor loses its redemption rights.

•

Fixed income funds comprise a number of positions in diversified fixed income funds that are managed by third-party managers. Underlying investments vary from high-grade corporate bonds to non-investment grade senior secured loans and bonds, but are generally invested in liquid fixed income markets. These funds have regularly published prices. One of the funds, with a market value of $44.2 million in which we invest has a lock-up period of up to two years and is eligible for quarterly redemptions thereafter with 65 days' notice. Another fund, with a market value of $68.8 million, is not currently eligible for redemption. All other funds have liquidity terms that vary from daily up to 30 days' notice.


•	Equity funds invest in a diversified portfolio of U.S. and international publicly-traded equity securities. The funds have liquidity terms that vary from daily up to quarterly.


•	Private equity funds invest primarily in the financial services industry. All of our investments in private equity funds are subject to restrictions on redemptions and sales that are determined by the governing documents and limit our ability to liquidate those investments. These restrictions have been in place since the dates of our initial investments.


•	CLO equities comprise investments in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans.


•	CLO equity fund invests primarily in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans. This fund has a fair value of $37.3 million and approximately 28% of the fund is eligible for redemption.


•	Private credit funds invest in direct senior or collateralized loans. The investments are subject to restrictions on redemption and sales that are determined by the governing documents and limit our ability to liquidate our positions in the funds.


•	Others comprise of various investments including a real estate debt fund that invests primarily in European commercial real estate equity, call options on equities and a fund that provides loans to educational institutions throughout the United States and its territories.

The increase in our other investments carried at fair value between December 31, 2018 and December 31, 2017 was primarily attributable to $626.5 million of other investments acquired as part of the KaylaRe acquisition and net additional subscriptions of $583.7 million to hedge funds, equity funds and fixed income funds.

As at December 31, 2018, we had unfunded commitments of $228.2 million to private equity funds.Other Investments, at costDuring 2018, we sold our investments in life settlement contracts, which were carried at cost. During the years ended December 31, 2018, 2017 and 2016, net investment income included $6.5 million, $13.8 million and $18.0 million, respectively, related to investments in life settlements. During the years ended December 31, 2018, 2017 and 2016, there were impairment charges of $6.6 million, $7.2 million and $5.3 million, respectively, recognized in net realized and unrealized gains/losses.Equity Method Investments

The table below shows our equity method investments as of December 31, 2018 and 2017:



	2018						2017
	Investment		Ownership %		Carrying Value		Investment		Ownership %		Carrying Value
Enhanzed Re	$	94,800	47.4	%	$	94,800	$	—	—	%	$	—
Citco	50,000		31.9	%	50,812		—		—	%	—
Monument	26,600		26.6	%	42,193		15,960		26.6	%	15,960
Clear Spring	11,210		20.0	%	$	10,070	11,210		20.0	%	10,596
Other	15,250		~30%		6,632		15,250		~30%		6,633
KaylaRe	—		—	%	—		299,026		48.2	%	309,816
	$	197,860			$	204,507	$	341,446			$	343,005

Refer to Note 21 - "Related Party Transactions" for further information regarding our investments in Clear Spring, Citco, Monument, KaylaRe and Enhanzed Re.

As at December 31, 2018, we had unfunded commitments of $167.2 million related to equity method investments.Funds Held

Under funds held arrangements, the reinsured company has retained funds that would otherwise have been remitted to our reinsurance subsidiaries. We either have (i) funds held by reinsured companies, which are carried at amortized cost and on which we receive a fixed crediting rate, or (ii) funds held - directly managed, which are carried at fair value and on which we receive the underlying return on the portfolio. The investment returns on both categories of funds held are recognized in net investment income and net realized and unrealized gains (losses). The funds held balance is credited with investment income and losses payable are deducted.

Funds Held - Directly Managed

Funds held - directly managed, where we receive the underlying return on the investment portfolio, are carried at fair value, either because we elected the fair value option at the inception of the reinsurance contract, or because it represents the aggregate of funds held at amortized cost and the fair value of an embedded derivative. The embedded derivative relates to our contractual right to receive the return on the underlying investment portfolio supporting the reinsurance contract. We include the estimated fair value of these embedded derivatives in the consolidated balance sheets with the host contract in order to reflect the expected settlement of these features with the host contract. The change in the fair value of the embedded derivative is included in net unrealized gains (losses). The following table summarizes the components of the funds held - directly managed as of December 31, 2018 and 2017:



	2018		2017
Fixed maturity investments, trading	$	1,183,374	$	1,165,386
Other assets	14,780		14,554
	$	1,198,154	$	1,179,940

The following table summarizes the fixed maturity investment components of funds held - directly managed as of December 31, 2018 and 2017:



	2018									2017
	Funds held - Directly Managed - Fair Value Option			Funds held - Directly Managed - Variable Return			Total			Funds held - Directly Managed - Fair Value Option		Funds held - Directly Managed - Variable Return		Total
Fixed maturity investments, at amortized cost	$	179,670		$	1,044,377		$	1,224,047		$	174,227	$	985,486	$	1,159,713
Net unrealized gains (losses):
Change in fair value - fair value option accounting	(2,733		)	—			(2,733		)	973		—		973
Change in fair value - embedded derivative accounting	—			(37,940		)	(37,940		)	—		4,700		4,700
Fixed maturity investments within funds held - directly managed, at fair value	$	176,937		$	1,006,437		$	1,183,374		$	175,200	$	990,186	$	1,165,386

Refer to the sections above for details of the fixed maturity investments within our funds held - directly managed portfolios.

Funds Held by Reinsured Companies

Funds held by reinsured companies, where we received a fixed crediting rate, are carried at cost on our consolidated balance sheets. As of December 31, 2018 and 2017, we had funds held by reinsured companies of $321.3 million and $175.4 million, respectively.Net Investment Income

Major categories of net investment income for the years ended December 31, 2018, 2017 and 2016 are summarized as follows:



	2018			2017			2016
Fixed maturity investments	$	189,000		$	144,367		$	114,885
Short-term investments and cash and cash equivalents	12,117			9,314			4,491
Funds held	10,041			601			22,583
Funds held – directly managed	37,623			32,479			5,769
Investment income from fixed maturities and cash and cash equivalents	248,781			186,761			147,728
Equity investments	5,397			4,355			4,874
Other investments	19,703			14,337			22,515
Life settlements and other	6,511			14,370			18,191
Investment income from equities and other investments	31,611			33,062			45,580
Gross investment income	280,392			219,823			193,308
Investment expenses	(9,721		)	(11,034		)	(7,845		)
Net investment income	$	270,671		$	208,789		$	185,463

Net Realized and Unrealized Gains (Losses)

Components of net realized and unrealized gains (losses) for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018			2017			2016
Net realized gains (losses) on sale:
Gross realized gains on fixed maturity securities, available-for-sale securities ⁽¹⁾	$	27		$	616		$	405
Gross realized losses on fixed maturity securities, available-for-sale securities ⁽¹⁾	(90		)	(125		)	(21		)
Net realized gains (losses) on fixed maturity securities, trading	(27,646		)	4,695			1,848
Net realized losses on fixed maturity securities in funds held - directly managed portfolios	(3,940		)	(4,219		)	(14,616		)
Net realized gains on equity investments, trading	4,016			701			5,348
Total net realized gains (losses) on sale	(27,633		)	1,668			(7,036		)
Net unrealized gains (losses):
Fixed maturity securities, trading	(165,187		)	35,878			36,314
Fixed maturity securities in funds held - directly managed portfolios	(46,257		)	33,902			(28,317		)
Equity investments, trading	(9,831		)	16,498			6,561
Other investments	(163,976		)	102,388			70,296
Total net unrealized gains (losses)	(385,251		)	188,666			84,854
Net realized and unrealized gains (losses)	$	(412,884	)	$	190,334		$	77,818

⁽¹⁾The gross realized gains and losses on available-for-sale investments included in the table above resulted from sales of $11.4 million, $40.8 million and $41.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.Restricted Assets

We utilize trust accounts to collateralize business with our insurance and reinsurance counterparties. We are also required to maintain investments and cash and cash equivalents on deposit with regulatory authorities and Lloyd's to support our insurance and reinsurance operations. The investments and cash and cash equivalents on deposit are available to settle insurance and reinsurance liabilities. Collateral generally takes the form of assets held in trust, letters of credit or funds held. The assets used as collateral are primarily highly rated fixed maturity securities. The carrying value of our restricted assets, including restricted cash of $380.5 million and $257.7 million, as of December 31, 2018 and 2017, respectively, was as follows:



	2018		2017
Collateral in trust for third party agreements	$	4,336,752	$	3,118,892
Assets on deposit with regulatory authorities	579,048		599,829
Collateral for secured letter of credit facilities	127,841		151,467
Funds at Lloyd's ⁽¹⁾	354,589		234,833
	$	5,398,230	$	4,105,021

⁽¹⁾Our businesses include three Lloyd's syndicates. Lloyd's determines the required capital principally through the annual business plan of each syndicate. This capital is referred to as "Funds at Lloyd's" and will be drawn upon in the event that a syndicate has a loss that cannot be funded from other sources. We also utilize unsecured letters of credit for Funds at Lloyd's, as described in Note 15 - "Debt Obligations and Credit Facilities".

The increase in the collateral held in trust for third-party agreements and Funds at Lloyd's was primarily due to the transactions with Neon, Novae, Zurich and Maiden Re North America described in Note 3 - "Acquisitions" and Note 4 - "Significant New Business".

Derivative and Hedging Instruments

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and Hedging Instruments

7. DERIVATIVES AND HEDGING INSTRUMENTSForeign Currency Hedging of Net Investments in Foreign Operations

We use foreign currency forward exchange rate contracts in qualifying hedging relationships to hedge the foreign currency exchange rate risk associated with certain of our net investments in foreign operations. At December 31, 2018 and 2017, we had forward foreign currency contracts in place which we had designated as hedges of our net investments in foreign operations.

The following table presents the gross notional amounts and the estimated fair values recorded within other assets and liabilities related to our qualifying foreign currency forward exchange rate contracts as at December 31, 2018 and 2017:



	2018						2017
			Fair Value						Fair Value
	Gross Notional Amount		Assets		Liabilities		Gross Notional Amount		Assets		Liabilities
Foreign exchange forward - AUD	$	42,258	$	1,377	$	—	$	32,810	$	—	$	965
Foreign exchange forward - EUR	66,422		238		300		—		—		—
Foreign exchange forward - CAD	—		—		—		27,141		11		512
Total qualifying hedges	$	108,680	$	1,615	$	300	$	59,951	$	11	$	1,477

The Canadian Dollar ("CAD") foreign currency contract that we had in place to hedge the net investment in our CAD denominated operations was discontinued effective December 31, 2017 following the disposal of those operations.

The following table presents the amounts of the net gains and losses deferred in the CTA account, which is a component of AOCI, in shareholders' equity, related to our qualifying foreign currency forward exchange rate contracts for the years ended December 31, 2018, 2017 and 2016:



	Amount of Gains (Losses) Deferred in AOCI
	2018		2017			2016
Foreign exchange forward - AUD	$	3,438	$	(1,247	)	$	2,568
Foreign exchange forward - EUR	1,000		—			—
Foreign exchange forward - CAD	—		—			1,186
Total qualifying hedges	$	4,438	$	(1,247	)	$	3,754

Following the completion of the sale of Pavonia, which closed on December 29, 2017, we reclassified from CTA to earnings, the cumulative losses of $1.1 million related to the CAD foreign currency forward contract which hedged our CAD denominated net investment in Pavonia.

Non-derivative Hedging Instruments of Net Investments in Foreign Operations

As at December 31, 2018 and 2017, there were borrowings of €nil and €50.0 million ($60.1 million), respectively, under our revolving credit facilities that were designated as non-derivative hedges of our net investment in certain subsidiaries whose functional currency is denominated in Euros. These Euro-denominated borrowings were repaid in full and replaced by a Euro-denominated foreign currency forward exchange rate contract in a qualifying hedging arrangement during the year ended December 31, 2018.

The following table presents the amounts of the net gains and losses deferred in the CTA account in AOCI relating to these qualifying Euro-loan non-derivative hedging instruments for the years ended December 31, 2018, 2017 and 2016:



	Amount of Gains (Losses) Deferred in AOCI
	2018		2017			2016
Net gains (losses) on qualifying non-derivative hedges	$	3,144	$	(9,375	)	$	6,000

Derivatives Not Designated or Not Qualifying as Hedging InstrumentsFrom time to time, we may also utilize foreign currency forward contracts as part of our overall foreign currency risk management strategy or to obtain exposure to a particular financial market, as well as for yield enhancement in non-qualifying hedging relationships. We may also utilize equity call option instruments either to obtain exposure to a particular equity instrument or for yield enhancement in non-qualifying hedging relationships.Foreign Currency Forward Contracts

The following table presents the gross notional amounts and the estimated fair values recorded within other assets and liabilities as at December 31, 2018 and 2017 and the gains and losses during the years ended December 31, 2018 and 2017, related to our non-qualifying foreign currency forward exchange rate hedging relationships:



	December 31, 2018						2018
			Fair Value
	Gross Notional Amount		Assets		Liabilities		Gains (losses) on non-qualifying hedges charged to earnings
Foreign exchange forward - AUD	$	45,427	$	1,952	$	310	$	4,958
Foreign exchange forward - CAD	55,050		1,441		—		9,311
Foreign exchange forward - EUR	54,282		139		301		2,296
Foreign exchange forward - GBP	256,959		1,554		72		15,078
Total non-qualifying hedges	$	411,718	$	5,086	$	683	$	31,643



	December 31, 2017						2017
			Fair Value
	Gross Notional Amount		Assets		Liabilities		Gains (losses) on non-qualifying hedges charged to earnings
Foreign exchange forward - AUD	$	57,028	$	—	$	1,002	$	(1,002	)
Foreign exchange forward - EUR	19,235		46		455		(971		)
Foreign exchange forward - GBP	207,323		262		4,312		(6,367		)
Total non-qualifying hedges	$	283,586	$	308	$	5,769	$	(8,340	)

There were no such non-qualifying foreign currency forward contracts utilized during the year ended December 31, 2016.Investments in Call Options on EquitiesDuring the year ended December 31, 2018, we purchased call options on equities at a cost of $10.0 million and recorded unrealized losses in net earnings of $9.4 million on the instruments for the year ended December 31, 2018. We did not have any equity call option instruments as of or during the year ended December 31, 2017. During the year ended December 31, 2016, we purchased call options on equities at a cost of $5.5 million and sold these for a realized gain of $5.4 million.

Reinsurance Balances Recoverable on Paid and Unpaid Losses

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

Reinsurance Balances Recoverable on Paid and Unpaid Losses

8. REINSURANCE BALANCES RECOVERABLE ON PAID AND UNPAID LOSSESThe following table provides the total reinsurance balances recoverable on paid and unpaid losses as of December 31, 2018 and 2017:



	2018
	Non-life Run-off			Atrium			StarStone			Other		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	901,772		$	18,891		$	263,065		$	—	$	1,183,728
IBNR	609,434			19,247			201,784			—		830,465
Fair value adjustments - acquired companies	(14,344		)	630			(1,899		)	—		(15,613		)
Fair value adjustments - fair value option	(130,739		)	—			—			—		(130,739		)
Total reinsurance reserves recoverable	1,366,123			38,768			462,950			—		1,867,841
Paid losses recoverable	138,265			(256		)	23,813			—		161,822
	$	1,504,388		$	38,512		$	486,763		$	—	$	2,029,663

Reinsurance balances recoverable on paid and unpaid losses	$	764,797		$	38,512		$	486,763		$	—	$	1,290,072
Reinsurance balances recoverable on paid and unpaid losses - fair value option	739,591			—			—			—		739,591
Total	$	1,504,388		$	38,512		$	486,763		$	—	$	2,029,663



	2017
	Non-life Run-off			Atrium			StarStone			Other		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	932,284		$	7,472		$	211,650		$	—	$	1,151,406
IBNR	590,154			31,476			242,620			—		864,250
Fair value adjustments - acquired companies	(12,970		)	1,583			(2,253		)	—		(13,640		)
Fair value adjustments - fair value option	(131,983		)	—			—			—		(131,983		)
Total reinsurance reserves recoverable	1,377,485			40,531			452,017			—		1,870,033
Paid losses recoverable	128,253			(451		)	23,179			16		150,997
	$	1,505,738		$	40,080		$	475,196		$	16	$	2,021,030
Reconciliation to Consolidated Balance Sheet:
Reinsurance balances recoverable on paid and unpaid losses	$	963,514		$	40,080		$	475,196		$	16	$	1,478,806
Reinsurance balances recoverable on paid and unpaid losses - fair value option	542,224			—			—			—		542,224
Total	$	1,505,738		$	40,080		$	475,196		$	16	$	2,021,030

Our insurance and reinsurance run-off subsidiaries and assumed portfolios, prior to acquisition, used retrocessional agreements to reduce their exposure to the risk of insurance and reinsurance assumed. On an annual basis, both Atrium and StarStone purchase a tailored outwards reinsurance program designed to manage their risk profiles. The majority of Atrium’s and StarStone's third-party reinsurance cover is with highly rated reinsurers or is collateralized by pledged assets or letters of credit.

The fair value adjustments, determined on acquisition of insurance and reinsurance subsidiaries, are based on the estimated timing of loss and LAE recoveries and an assumed interest rate equivalent to a risk free rate for securities with similar duration to the acquired reinsurance balances recoverable on paid and unpaid losses plus a spread to reflect credit risk, and are amortized over the estimated recovery period, as adjusted for accelerations in timing of payments as a result of commutation settlements. The determination of the fair value adjustments on the retroactive reinsurance contracts for which we have elected the fair value option is described in Note 11 - "Fair Value Measurements".

As of December 31, 2018 and 2017, we had reinsurance balances recoverable on paid and unpaid losses of approximately $2,029.7 million and $2,021.0 million, respectively. The increase of $8.6 million in reinsurance balances recoverable on paid and unpaid losses was primarily related/due to the Maiden Re North America, Neon and Novae transactions, partially offset by the KaylaRe transaction and by reserve reductions, commutations and cash collections made during the year ended December 31, 2018 in our Non-life Run-off segment.Top Ten Reinsurers



	December 31, 2018												December 31, 2017
	Non-life Run-off		Atrium		StarStone		Other		Total		% of Total		Non-life Run-off		Atrium		StarStone		Other		Total		% of Total
Top ten reinsurers	$	1,124,079	$	25,239	$	263,192	$	—	$	1,412,510	69.6	%	$	1,166,057	$	22,422	$	328,257	$	—	$	1,516,736	75.0	%
Other reinsurers > $1 million	364,098		12,091		220,123		—		596,312		29.4	%	322,722		16,631		144,336		—		483,689		24.0	%
Other reinsurers < $1 million	16,211		1,182		3,448		—		20,841		1.0	%	16,959		1,027		2,603		16		20,605		1.0	%
Total	$	1,504,388	$	38,512	$	486,763	$	—	$	2,029,663	100.0	%	$	1,505,738	$	40,080	$	475,196	$	16	$	2,021,030	100.0	%



	December 31, 2018		December 31, 2017
Information regarding top ten reinsurers:
Number of top 10 reinsurers rated A- or better	7		6
Number of top 10 non-rated reinsurers ⁽¹⁾	3		4

Top 10 rated A- or better reinsurers recoverables	$	1,096,272	$	829,164
Top 10 collaterized non-rated reinsurers recoverables ⁽¹⁾	316,238		687,572
	$	1,412,510	$	1,516,736

Single reinsurers that represent 10% or more of total reinsurance balance recoverables as at September 30, 2018:

Hannover Ruck SE ⁽²⁾	$	279,723	$	320,047
Lloyd's Syndicates ⁽³⁾	$	334,509	$	193,838

⁽¹⁾For the three non-rated reinsurers at as December 31, 2018 and four non-rated reinsurers as at December 31, 2017, we hold security in the form of pledged assets in trust or letters of credit issued to us in the full amount of the recoverable.

⁽²⁾ Hannover Ruck SE is rated AA- by Standard & Poor’s and A+ by A.M. Best.

⁽³⁾ Lloyd's Syndicates are rated A+ by Standard & Poor's and A by A.M. Best. Provisions for Uncollectible Reinsurance Balances Recoverable on Paid and Unpaid Losses

We evaluate and monitor concentration of credit risk among our reinsurers. Provisions are made for amounts considered potentially uncollectible.

The following table shows our reinsurance balances recoverable on paid and unpaid losses by rating of reinsurer and our provisions for uncollectible reinsurance balances recoverable on paid and unpaid losses ("provisions for bad debt") as of December 31, 2018 and 2017. The provisions for bad debt all relate to the Non-life Run-off segment.



	2018								2017
	Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross		Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross
Reinsurers rated A- or above	$	1,612,464	$	51,519	$	1,560,945	3.2	%	$	1,252,887	$	51,115	$	1,201,772	4.1	%
Reinsurers rated below A-, secured	430,852		—		430,852		—	%	771,097		—		771,097		—	%
Reinsurers rated below A-, unsecured	143,079		105,213		37,866		73.5	%	162,259		114,098		48,161		70.3	%
Total	$	2,186,395	$	156,732	$	2,029,663	7.2	%	$	2,186,243	$	165,213	$	2,021,030	7.6	%

13. PREMIUMS WRITTEN AND EARNED

The following tables provide a summary of net premiums written and earned for the years ended December 31, 2018, 2017 and 2016:



	2018						2017						2016
	Premiums Written			Premiums Earned			Premiums Written			Premiums Earned			Premiums Written			Premiums Earned
Non-life Run-off
Gross	$	(8,910	)	$	25,230		$	14,102		$	23,950		$	17,316		$	25,989
Ceded	(307		)	(15,803		)	(7,620		)	(9,788		)	(8,114		)	(9,234		)
Net	$	(9,217	)	$	9,427		$	6,482		$	14,162		$	9,202		$	16,755
Atrium
Gross	$	171,494		$	164,428		$	153,472		$	152,278		$	143,170		$	140,438
Ceded	(18,006		)	(18,113		)	(19,258		)	(17,531		)	(2,733		)	(16,022		)
Net	$	153,488		$	146,315		$	134,214		$	134,747		$	140,437		$	124,416
StarStone
Gross	$	1,121,135		$	1,010,816		$	895,160		$	865,159		$	854,699		$	830,186
Ceded	(315,573		)	(295,857		)	(430,259		)	(405,756		)	(206,663		)	(153,578		)
Net	$	805,562		$	714,959		$	464,901		$	459,403		$	648,036		$	676,608
Other
Gross	$	32,378		$	25,237		$	5,719		$	5,900		$	7,157		$	7,220
Ceded	(311		)	(363		)	(926		)	(1,091		)	(896		)	(1,485		)
Net	$	32,067		$	24,874		$	4,793		$	4,809		$	6,261		$	5,735
Total
Gross	$	1,316,097		$	1,225,711		$	1,068,453		$	1,047,287		$	1,022,342		$	1,003,833
Ceded	(334,197		)	(330,136		)	(458,063		)	(434,166		)	(218,406		)	(180,319		)
Net	$	981,900		$	895,575		$	610,390		$	613,121		$	803,936		$	823,514

Deferred Charge Assets

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

Deferred Charge Assets

9. DEFERRED CHARGE ASSETS

Deferred charge assets relate to retroactive reinsurance policies providing indemnification of losses and LAE with respect to past loss events in the Non-life Run-off segment. For insurance and reinsurance contracts for which we do not elect the fair value option, a deferred charge asset is recorded for the excess, if any, of the estimated ultimate losses payable over the premiums received at the initial measurement. The premium consideration that we charge the ceding companies may be lower than the undiscounted estimated ultimate losses payable due to the time value of money. After receiving the premium consideration in full from our cedents at the inception of the contract, we invest the premium received over an extended period of time thereby generating investment income. We expect to generate profits from these retroactive reinsurance policies when taking into account the premium received and expected investment income, less contractual obligations and expenses. Further information on deferred charge assets recorded during the years ended December 31, 2018, 2017 and 2016 is included in Note 4 - "Significant New Business".

Deferred charge assets are included in other assets on our consolidated balance sheets. The following table presents a reconciliation of the deferred charge assets for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Beginning carrying value	$	80,192		$	94,551		$	255,911
Recorded during the year	20,174			—			7,467
Amortization	(13,781		)	(14,359		)	(130,194		)
Impairment	—			—			(38,633		)
Ending carrying value	$	86,585		$	80,192		$	94,551

Deferred charge assets are amortized over the estimated claim payment period of the related contract with the periodic amortization reflected in earnings as a component of losses and LAE. Deferred charge assets amortization is adjusted at each reporting period to reflect new estimates of the amount and timing of remaining loss payments. Changes in the estimated amount and the timing of payments of unpaid losses may have an effect on the unamortized deferred charge assets and the amount of periodic amortization. Deferred charge assets are assessed at each reporting period for impairment. If the asset is determined to be impaired, it is written down in the period in which the determination is made. The impairment recognized in the year ended December 31, 2016 was offset in earnings by favorable loss reserve development. For the year ended December 31, 2018, we completed our assessment for impairment of deferred charge assets and concluded that there had been no impairment of our carried deferred charge assets amount.

Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

Losses and Loss Adjustment Expenses

10. LOSSES AND LOSS ADJUSTMENT EXPENSES The liability for losses and loss adjustment expenses ("LAE"), also referred to as loss reserves, represents our gross estimates before reinsurance for unpaid reported losses and losses that have been incurred but not reported ("IBNR") for our Non-life Run-off, Atrium and StarStone segments using a variety of actuarial methods. We recognize an asset for the portion of the liability that we expect to recover from reinsurers. LAE reserves include allocated loss adjustment expenses ("ALAE"), and unallocated loss adjustment expenses ("ULAE"). ALAE are linked to the settlement of an individual claim or loss, whereas ULAE are based on our estimates of future costs to administer the claims. IBNR represents reserves for loss and LAE that have been incurred but not yet reported to us. This includes amounts for unreported claims, development on known claims and reopened claims.The following table summarizes the liability for losses and LAE by segment and for our other activities as of December 31, 2018 and 2017:



	2018
	Non-life Run-off			Atrium		StarStone			Other		Total
Outstanding losses	$	4,271,769		$	94,885	$	796,194		$	6,052	$	5,168,900
IBNR	3,527,767			140,521		787,894			12,809		4,468,991
Fair value adjustments	(217,527		)	3,476		(467		)	—		(214,518		)
Fair value adjustments - fair value option	(374,752		)	—		—			—		(374,752		)
ULAE	333,405			2,402		25,076			—		360,883
Total	$	7,540,662		$	241,284	$	1,608,697		$	18,861	$	9,409,504

Reconciliation to Consolidated Balance Sheet:
Losses and loss adjustment expenses	$	4,666,607		$	241,284	$	1,608,697		$	18,861	$	6,535,449
Losses and loss adjustment expenses, at fair value	2,874,055			—		—			—		2,874,055
Total	$	7,540,662		$	241,284	$	1,608,697		$	18,861	$	9,409,504



	2017
	Non-life Run-off			Atrium		StarStone			Other		Total
Outstanding losses	$	3,185,703		$	78,363	$	590,977		$	—	$	3,855,043
IBNR	2,903,927			150,508		599,221			—		3,653,656
Fair value adjustments	(125,998		)	9,547		(555		)	—		(117,006		)
Fair value adjustments - fair value option	(314,748		)	—		—			—		(314,748		)
ULAE	300,588			2,455		18,100			—		321,143
Total	$	5,949,472		$	240,873	$	1,207,743		$	—	$	7,398,088

Reconciliation to Consolidated Balance Sheet:
Losses and loss adjustment expenses	$	4,154,803		$	240,873	$	1,207,743		$	—	$	5,603,419
Losses and loss adjustment expenses, at fair value	1,794,669			—		—			—		1,794,669
Total	$	5,949,472		$	240,873	$	1,207,743		$	—	$	7,398,088

The overall increase in the liability for losses and LAE between December 31, 2017 and December 31, 2018 was primarily attributable to the assumed reinsurance agreements with Neon, Novae and Zurich for which we have elected the fair value option, as described in Note 4 - "Significant New Business", and the acquisition of Maiden Re North America, as described in Note 3 - "Acquisitions", in our Non-life Run-off segment.The table below provides a consolidated reconciliation of the beginning and ending liability for losses and LAE for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Balance as at January 1	$	7,398,088		$	5,987,867		$	5,720,149
Less: reinsurance reserves recoverable	1,870,033			1,388,193			1,360,382
Less: deferred charge assets on retroactive reinsurance	80,192			94,551			255,911
Net balance as at January 1	5,447,863			4,505,123			4,103,856
Net incurred losses and LAE:
Current period	689,782			437,853			493,016
Prior periods	(235,757		)	(244,302		)	(318,917		)
Total net incurred losses and LAE	454,025			193,551			174,099
Net paid losses:
Current period	(189,560		)	(82,273		)	(79,579		)
Prior periods	(1,194,985		)	(862,921		)	(753,478		)
Total net paid losses	(1,384,545		)	(945,194		)	(833,057		)
Effect of exchange rate movement	(145,243		)	158,429			(46,903		)
Acquired on purchase of subsidiaries	1,310,874			10,251			10,019
Assumed business	1,772,104			1,525,703			1,340,444
Ceded business	—			—			(243,335		)
Net balance as at December 31	7,455,078			5,447,863			4,505,123
Plus: reinsurance reserves recoverable	1,867,841			1,870,033			1,388,193
Plus: deferred charge assets on retroactive reinsurance	86,585			80,192			94,551
Balance as at December 31	$	9,409,504		$	7,398,088		$	5,987,867

The tables below provide the components of net incurred losses and LAE by segment and for our other activities for the years ended December 31, 2018, 2017 and 2016:



	2018
	Non-life Run-off			Atrium			StarStone			Other		Total
Net losses paid	$	838,817		$	64,506		$	477,130		$	4,092	$	1,384,545
Net change in case and LAE reserves	(547,420		)	6,331			75,887			4,808		(460,394		)
Net change in IBNR reserves	(565,385		)	4,091			113,879			7,999		(439,416		)
Increase (reduction) in estimates of net ultimate losses	(273,988		)	74,928			666,896			16,899		484,735
Increase (reduction) in provisions for unallocated LAE	(65,401		)	—			6,753			—		(58,648		)
Amortization of deferred charge assets	13,781			—			—			—		13,781
Amortization of fair value adjustments	12,877			(5,118		)	(266		)	—		7,493
Changes in fair value - fair value option	6,664			—			—			—		6,664
Net incurred losses and LAE	$	(306,067	)	$	69,810		$	673,383		$	16,899	$	454,025



	2017
	Non-life Run-off			Atrium			StarStone			Total
Net losses paid	$	581,723		$	55,678		$	307,793		$	945,194
Net change in case and LAE reserves	(381,053		)	8,338			31,685			(341,030		)
Net change in IBNR reserves	(390,727		)	7,679			(23,540		)	(406,588		)
Increase (reduction) in estimates of net ultimate losses	(190,057		)	71,695			315,938			197,576
Increase (reduction) in provisions for bad debt	(1,536		)	159			—			(1,377		)
Increase (reduction) in provisions for unallocated LAE	(53,810		)	285			(187		)	(53,712		)
Amortization of deferred charge assets	14,359			—			—			14,359
Amortization of fair value adjustments	10,114			(2,720		)	(945		)	6,449
Changes in fair value - fair value option	30,256			—			—			30,256
Net incurred losses and LAE	$	(190,674	)	$	69,419		$	314,806		$	193,551



	2016
	Non-life Run-off			Atrium			StarStone			Total
Net losses paid	$	533,806		$	47,998		$	251,253		$	833,057
Net change in case and LAE reserves	(608,785		)	(148		)	73,049			(535,884		)
Net change in IBNR reserves	(347,384		)	13,700			75,643			(258,041		)
Increase (reduction) in estimates of net ultimate losses	(422,363		)	61,550			399,945			39,132
Reduction in provisions for bad debt	(13,822		)	—			—			(13,822		)
Increase (reduction) in provisions for unallocated LAE	(43,955		)	145			3,543			(40,267		)
Amortization of deferred charge assets	168,827			—			—			168,827
Amortization of fair value adjustments	25,432			(3,308		)	(1,895		)	20,229
Changes in fair value - fair value option	—			—			—			—
Net incurred losses and LAE	$	(285,881	)	$	58,387		$	401,593		$	174,099

Loss Development InformationMethodology for Establishing Reserves

The liability for losses and LAE includes an amount determined from reported claims and an amount based on historical loss experience and industry statistics for IBNR using a variety of actuarial methods. Our loss reserves cover multiple lines of business, which include workers' compensation, general casualty, asbestos and environmental, marine, aviation and transit, construction defects and other non-life lines of business. Our management, through our loss reserving committees, considers the reasonableness of loss reserves recommended by our actuaries, including actual loss development during the year.

Case reserves are recognized for known claims (including the cost of related litigation) when sufficient information has been reported to us to indicate the involvement of a specific insurance policy. We use considerable judgment in estimating losses for reported claims on an individual claim basis based upon our knowledge of the circumstances surrounding the claim, the severity of the injury or damage, the jurisdiction of the occurrence, the potential for ultimate exposure, the type of loss, and our experience with the line of business and policy provisions relating to the particular type of claim. The reserves for unpaid reported losses and LAE are established by management based on reports from brokers, ceding companies and insureds and represent the estimated ultimate cost of events or conditions that have been reported to, or specifically identified, by us. We also consider facts currently known and the current state of the law and coverage litigation.

IBNR reserves are established by management based on actuarially determined estimates of ultimate losses and loss expenses. We use generally accepted actuarial methodologies to estimate ultimate losses and LAE and those estimates are reviewed by management. In addition, the routine settlement of claims, at either below or above the carried advised loss reserve, updates historical loss development information to which actuarial methodologies are applied, often resulting in revised estimates of ultimate liabilities. On an annual basis, independent actuarial firms are retained by management to provide their estimates of ultimate losses and to review the estimates developed by our actuaries.

Within the annual loss reserve studies produced by either our actuaries or independent actuaries, exposures for each subsidiary are separated into homogeneous reserving categories for the purpose of estimating IBNR. Each reserving category contains either direct insurance or assumed reinsurance reserves and groups relatively similar types of risks and exposures (for example, asbestos, environmental, casualty, property) and lines of business written (for example, marine, aviation, non-marine). Based on the exposure characteristics and the nature of available data for each individual reserving category, a number of methodologies are applied. Recorded reserves for each category are selected from the actuarial indications produced by the various methodologies after consideration of exposure characteristics, data limitations and strengths and weaknesses of each method applied. This approach to estimating IBNR has been consistently adopted in the annual loss reserve studies for each period presented.

The estimation of unpaid claim liabilities at any given point in time is subject to a high degree of uncertainty for a number of reasons. A significant amount of time can lapse between the assumption of risk, the occurrence of a loss event, the reporting of the event to an insurance or reinsurance company and the ultimate payment of the claim on the loss event. Our actuarial methodologies include industry benchmarking which, under certain methodologies, compares the trend of our loss development to that of the industry. To the extent that the trend of our loss development compared to the industry changes in any period, it is likely to have an impact on the estimate of ultimate liabilities. Unpaid claim liabilities for property and casualty exposures in general are impacted by changes in the legal environment, jury awards, medical cost trends and general inflation. Certain estimates for unpaid claim liabilities involve considerable uncertainty due to significant coverage litigation, and it can be unclear whether past claim experience will be representative of future claim experience. Ultimate values for such claims cannot be estimated using reserving techniques that extrapolate losses to an ultimate basis using loss development factors, and the uncertainties surrounding the estimation of unpaid claim liabilities are not likely to be resolved in the near future. In addition, reserves are established to cover loss development related to both known and unasserted claims. Consequently, our subsequent estimates of ultimate losses and LAE, and our liability for losses and LAE, may differ materially from the amounts recorded in the consolidated financial statements.

These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, will be recorded in earnings in the period in which they become known. Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves established in previous calendar years.Asbestos and Environmental In establishing the reserves for losses and LAE related to asbestos and environmental claims, management considers facts currently known and the current state of the law and coverage litigation. Liabilities are recognized for known claims (including the cost of related litigation) when sufficient information has been developed to indicate the involvement of a specific insurance policy, and management can reasonably estimate its liability. In addition, reserves have been established to cover additional exposures on both known and unreported claims. Estimates of the reserves are reviewed and updated continually. Developed case law and claim histories are still evolving for such claims, especially because significant uncertainty exists about the outcome of coverage litigation and whether past claim experience will be representative of future claim experience. In view of the changes in the legal and tort environment that affect the development of such claims, the uncertainties inherent in valuing asbestos and environmental claims are not likely to be resolved in the near future. Ultimate values for such claims cannot be estimated using traditional reserving techniques and there are significant uncertainties in estimating the amount of our potential losses for these claims. There can be no assurance that the reserves established by us will be adequate or will not be adversely affected by the development of other latent exposures. The net liability for unpaid losses and LAE as of December 31, 2018 and 2017 included $1,703.6 million and $1,863.2 million, respectively, which represented an estimate of the net ultimate liability for asbestos and environmental claims. The gross liability for such claims as at December 31, 2018 and 2017 was $1,839.7 million and $1,992.1 million, respectively. For the years ended December 31, 2018 and 2017, our reserves for asbestos and environmental liabilities decreased by $152.4 million and increased by $970.4 million on a gross basis, respectively, and decreased by $159.6 million and increased by $883.4 million on a net basis, respectively. The increase in 2017 was primarily due to acquisition activity and the decrease in 2018 was primarily due to net paid losses, foreign exchange and net favourable development, partially offset by acquisition activity.Disclosures of Incurred and Paid Loss Development, IBNR, Claims Counts and Payout Percentages

The loss development tables disclosed below, sets forth our historic incurred and paid loss development by accident year through December 31, 2018, net of reinsurance, as well as the cumulative number of reported claims, IBNR balances, and other supplementary information.

The loss development tables disclosed below are presented as follows:


•	Non-Life Run-off - Presented by acquisition year, if significant, and further disaggregated, if significant, by line of business within that acquisition year. The lines of business disclosed include Asbestos, Environmental, General Casualty, Workers’ Compensation, Professional Indemnity/Directors & Officers, Motor and Property.


•	StarStone - All the lines of business related to the StarStone segment have been included within the loss development disclosures below, namely, Casualty, Marine, Property, Aerospace and Workers’ Compensation.


•	Atrium - The loss development disclosures for our Atrium segment have not been disaggregated further by line of business as the segment comprised approximately only 3% of our total consolidated liability for losses and LAE as at December 31, 2018 and was, therefore, not considered material for further disaggregation.

For each acquisition year and/or line of business for which loss development tables have been provided below, the disclosure approach and format adopted reflects the following:


•	The incurred loss development tables include both reported case reserves and IBNR liabilities, as well as cumulative paid losses;


•	Both the incurred and cumulative paid loss development tables include allocated LAE (i.e. claims handling costs allocated to specific individual claims) but exclude unallocated LAE (i.e. the costs associated with internal claims staff and third party administrators as well as consultants that cannot be allocated to specific individual claims);


•	The fair value adjustments related to business acquisitions are excluded from the loss development tables, however the undiscounted incurred losses, cumulative paid losses and allocated LAE related to business acquisitions are included in the loss development tables;


•	The fair value adjustments related to retroactive reinsurance agreements for which we have elected the fair value option are excluded from the loss development tables, however the undiscounted incurred losses, cumulative paid losses and allocated LAE related to retroactive reinsurance agreements for which we have elected the fair value option are included in the loss development tables;


•	The amounts relating to the amortization of deferred charge assets are excluded from the loss development tables;


•	The amounts relating to the increase (reduction) in provisions for unallocated LAE are excluded from the loss development tables;


•	The amounts included within the loss development tables for the years ended December 31, 2009 through to December 31, 2017 (April 1, 2014 through to December 31, 2017 in the case of StarStone since its date of acquisition), as well as the historical average annual percentage payout ratios as of December 31, 2018, are presented as supplementary information and are therefore unaudited;


•	All data presented within the loss development tables is net of reinsurance recoveries, excluding provisions for uncollectible reinsurance recoverables;


•	The IBNR reserves included within each incurred loss development table by accident year, reflect the net IBNR recorded as of December 31, 2018, including expected development on reported losses;

•

For the Non-life Run-off segment loss development tables, all information for both acquisitions and retroactive reinsurance agreements is presented prospectively. As the reserves are effectively re-underwritten at the date the reserves are acquired or assumed, we believe that the historical loss development prior to being acquired is not relevant to our own experience managing these reserves. In addition, the information required to prepare the loss development disclosures on a retrospective basis is not always available to us and a mixed approach would result in loss development tables that are not entirely reflective of the actual loss development;


•	For the StarStone segment loss development tables, all information has been presented on a prospective basis from the date of our acquisition of StarStone, which was effective on April 1, 2014. Providing pre-acquisition incurred and paid losses by accident year for years prior to 2014 was determined to be impracticable due to significant data limitations; and


•	For the Atrium segment loss development tables, all information has been presented on a retrospective basis.

The historical amounts disclosed within the loss development tables for all lines of business presented below are on a constant-currency basis, which is achieved by using constant foreign exchange rates between periods in the loss development tables, and translating prior period amounts denominated in currencies other than the U.S. dollar, which is our reporting currency, using the closing exchange rates as at December 31, 2018.

The impact of this exchange rate conversion is to show the change between periods exclusive of the effect of exchange rate fluctuations, which would otherwise distort the change in incurred losses and the cash flow patterns associated with those incurred losses shown within the loss development tables. The change in net incurred losses shown within the loss development tables will, however, differ from other U.S. GAAP disclosures of incurred current and prior period reserve development amounts, which include the effect of exchange rate fluctuations.

Establishing an estimate for loss reserves involves various assumptions and judgments, therefore, the information contained within the loss development disclosures only allows readers or users of our consolidated financial statements to understand, at the summary level presented in the development tables, the change over time in our reported incurred loss estimates as well as the nature and patterns of the cash flows associated with those estimates. We, therefore, believe that the information provided within the loss development tables disclosed below is of limited use for independent analysis or application of standard actuarial estimations, and any results obtained from doing so should be interpreted with caution.Cumulative Number of Reported Claims

Reported claim counts, on a cumulative basis, are provided as supplemental information to each incurred loss development table by accident year. We measure claim frequency information on an individual claim count basis within each of our segments as follows:

•

Non-Life Run-off - The claim frequency information for the exposures included within our Non-life Run-off lines of business includes direct and assumed open and closed claims by accident year at the claimant level. Reported claims that are closed without a payment are included within our cumulative number of reported claims because we typically incur claim adjustment expenses on them prior to their closure. The claim count numbers exclude counts related to claims within policy deductibles where the insured is responsible for the payment of losses within the deductible layer. Individual claim counts related to certain assumed reinsurance contracts such as excess-of-loss and quota share treaties are not available to us, and the losses arising from these treaties have been treated as single claims for the purposes of determining claim counts. Therefore, each treaty year within the reinsurance contract is deemed a single claim because the detailed underlying individual claim information is generally not reported to us by our cedents; and

•

StarStone and Atrium - The claim frequency information is determined at the claimant level for the exposures within the lines of business related to these segments. Our claims system assigns a unique claim identifier to each reported claim we receive. Each unique claim identifier is deemed to be a single claim, irrespective of whether the claim remains open or has been closed with or without payment. For certain insurance facilities and business produced or managed by managing general agents, coverholders and third party administrators where the underlying claims data is reported to us in an aggregated format, the information necessary to provide cumulative claims frequency is not available. In such cases, we typically record a “block” claim in our system. This also applies to a small amount of assumed reinsurance business that we write where, similarly, the underlying claims data is reported to us in an aggregated format. In such instances, each assumed reinsurance contract is deemed a single claim.

The cumulative number of reported claims for our Atrium segment includes all claim counts for Syndicate 609. Our Atrium segment represents our 25% share of Syndicate 609's underwriting capacity and capital, however, the claims count is the same whether viewed at the 100% Syndicate level or for our 25% share.

Our reported claim frequency information is subject to the following inherent limitations when analyzing our loss experience and severity:

•

Claim counts are presented only on a reported and not on an ultimate basis. Therefore, reported claim counts include open claims which have outstanding reserves but exclude IBNR claims. As such the reported claims are consistent with reported losses, which can be calculated by subtracting IBNR losses from incurred losses. However, the reported claim counts are inconsistent with the losses in the incurred loss development tables, which include IBNR losses, and to losses in the paid loss development tables, which exclude outstanding reserves;


•	Reported claim counts have not been adjusted for ceded reinsurance, which may distort any measures of frequency or severity;


•	For lines of business that have a mix of primary and excess layer exposures, such as our general casualty and workers’ compensation lines of business, the reported claim counts may fluctuate from period to period between exposure layers, thereby distorting any measure of frequency and severity; and

•

The use of our reported claim frequency information to project ultimate loss payouts by disaggregated disclosure category or line of business may not be as meaningful as claim count information related to individual contracts at a more granular level.Non-Life Run-off Segment

The table below provides a reconciliation of the beginning and ending reserves for losses and LAE for the years ended December 31, 2018, 2017 and 2016 for the Non-life Run-off segment:



	2018			2017			2016
Balance as at January 1	$	5,949,472		$	4,716,363		$	4,585,454
Less: reinsurance reserves recoverable	1,377,485			1,000,953			1,034,747
Less: deferred charge assets on retroactive reinsurance	80,192			94,551			255,911
Net balance as at January 1	4,491,795			3,620,859			3,294,796
Net incurred losses and LAE:
Current period	12,451			5,866			5,829
Prior periods	(318,518		)	(196,540		)	(291,710		)
Total net incurred losses and LAE	(306,067		)	(190,674		)	(285,881		)
Net paid losses:
Current period	(5		)	(2,835		)	(3,869		)
Prior periods	(838,812		)	(578,888		)	(529,937		)
Total net paid losses	(838,817		)	(581,723		)	(533,806		)
Effect of exchange rate movement	(132,632		)	138,772			(27,478		)
Acquired on purchase of subsidiaries	1,111,839			10,251			10,019
Assumed business	1,761,836			1,494,310			1,340,444
Ceded business	—			—			(177,235		)
Net balance as at December 31	6,087,954			4,491,795			3,620,859
Plus: reinsurance reserves recoverable	1,366,123			1,377,485			1,000,953
Plus: deferred charge assets on retroactive reinsurance	86,585			80,192			94,551
Balance as at December 31	$	7,540,662		$	5,949,472		$	4,716,363

Net incurred losses and LAE in the Non-life Run-off segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period			Total
Net losses paid	$	838,812		$	5	$	838,817		$	578,888		$	2,835	$	581,723		$	529,937		$	3,869		$	533,806
Net change in case and LAE reserves	(552,124		)	4,704		(547,420		)	(381,450		)	397		(381,053		)	(608,168		)	(617		)	(608,785		)
Net change in IBNR reserves	(573,127		)	7,742		(565,385		)	(393,100		)	2,373		(390,727		)	(349,726		)	2,342			(347,384		)
Increase (reduction) in estimates of net ultimate losses	(286,439		)	12,451		(273,988		)	(195,662		)	5,605		(190,057		)	(427,957		)	5,594			(422,363		)
Reduction in provisions for bad debt	—			—		—			(1,536		)			(1,536		)	(13,822		)	—			(13,822		)
Increase (reduction) in provisions for unallocated LAE	(65,401		)	—		(65,401		)	(54,071		)	261		(53,810		)	(44,190		)	235			(43,955		)
Amortization of deferred charge assets	13,781			—		13,781			14,359			—		14,359			168,827			—			168,827
Amortization of fair value adjustments	12,877			—		12,877			10,114			—		10,114			25,432			—			25,432
Changes in fair value - fair value option	6,664			—		6,664			30,256			—		30,256			—			—			—
Net incurred losses and LAE	$	(318,518	)	$	12,451	$	(306,067	)	$	(196,540	)	$	5,866	$	(190,674	)	$	(291,710	)	$	5,829		$	(285,881	)

Net change in case and LAE reserves comprises the movement during the year in specific case reserve liabilities as a result of claims settlements or changes advised to us by our policyholders and attorneys, less changes in case reserves recoverable advised by us to our reinsurers as a result of the settlement or movement of assumed claims. Net change in IBNR represents the gross change in our actuarial estimates of IBNR, less amounts recoverable.Year Ended December 31, 2018

The reduction in net incurred losses and LAE for the year ended December 31, 2018 of $306.1 million included net incurred losses and LAE of $12.5 million related to current period net earned premium from previously acquired businesses that renewed certain policies while being run-off. Excluding current period net incurred losses and LAE of $12.5 million, the reduction in net incurred losses and LAE liabilities relating to prior periods was $318.5 million, which was attributable to a reduction in estimates of net ultimate losses of $286.4 million, a reduction in provisions for unallocated LAE of $65.4 million relating to 2018 run-off activity, partially offset by the amortization of the deferred charge assets of $13.8 million, amortization of fair value adjustments of $12.9 million and an increase in the fair value of liabilities of $6.7 million related to our assumed retroactive reinsurance agreements for which we have elected the fair value option.

The reduction in estimates of prior period net ultimate losses of $286.4 million for the year ended December 31, 2018 included a net reduction in case and IBNR reserves of $1,125.3 million, partially offset by net losses paid of $838.8 million. For the year ended December 31, 2018, the overall change in our estimates of net ultimate losses related to prior periods by line of business within our Non-life Run-off was as presented in the table below:



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	108,248	$	(21,535	)	$	(151,662	)	$	(64,949	)
Environmental	21,273		479			(7,599		)	14,153
General Casualty	141,624		(115,240		)	(60,828		)	(34,444		)
Workers' Compensation	139,226		(178,138		)	(115,648		)	(154,560		)
Marine, aviation and transit	67,831		(44,200		)	(21,188		)	2,443
Construction defect	22,182		(7,257		)	(33,146		)	(18,221		)
Professional indemnity/ Directors & Officers	161,797		(11,159		)	(130,957		)	19,681
Motor	104,182		(109,962		)	(34,215		)	(39,995		)
Property	22,178		(24,271		)	(11,497		)	(13,590		)
All Other	50,271		(40,841		)	(6,387		)	3,043
Total	$	838,812	$	(552,124	)	$	(573,127	)	$	(286,439	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

A $154.6 million reduction in estimates of net ultimate losses in our workers' compensation line of business in 2018 arose across multiple portfolios, where reported incurred loss development was generally significantly less than expected. When actual development is less than expected for a sustained period of time across a significant volume of exposures, an updated actuarial analysis tends to indicate reductions in IBNR reserves. Updates to actuarial analysis, factoring in the less-than-expected reported incurred loss development for the year, is the primary driver of the $154.6 million reduction to Workers' Compensation net ultimate loss estimates.

For certain of our portfolios, the lower than expected actual development was driven by significant pro-active settlement activity on individual claimants where we were able to close open claims earlier than was indicated by the original payout pattern, and in other portfolios, based on the review of recent loss development activity we revised our actuarial development "tail factor" assumption, which led to a reduction in net ultimate losses. For example, in one portfolio we observed favorable incurred loss development, primarily relating to accident years 1995 through 2005 where we paid $22.7 million in loss payments to release a corresponding $37.0 million of associated case reserves for $14.3 million in favorable incurred loss development.

For recently acquired portfolios of workers' compensation business, we have utilized our subsidiary, Paladin Managed Care Services ("Paladin"), to assist us in reviewing claims. Paladin generally produces savings related to medical expense liabilities over and above savings achieved by prior vendors of such services, and the savings lead to actual development that is less than expected, thereby driving reductions to the estimates of net ultimate losses. In one particular program, our claims personnel pursued a pro-active strategy of settling with numerous workers' compensation claimants whose injuries arose in recent accident years. For this portfolio, the claims team reduced the open inventory of claims by 78% during 2018. This reduction in exposure, when incorporated into an updated actuarial analysis, led to a reduction in our estimate of ultimate net losses of $30.2 million, primarily relating to accident years 2010 through 2014.

We also continue to actively seek to commute policies when possible, and where the commutation of the policy is settled at a level below the carried value of the loss reserves, we record a reduction in our estimates of net ultimate losses. During the year ended December 31, 2018, we completed 11 commutations across several portfolios that contributed to the reduction in estimates of net ultimate losses.

Asbestos

The $64.9 million reduction in estimates of net ultimate losses in our asbestos line of business arose primarily due to one asbestos portfolio where lower than expected volume of claims reported and a lower than expected severity on claims settled in the period, when projected to net ultimate losses through actuarial methodologies, resulted in a significant reduction in estimates of net ultimate losses. The volume of claims reported was 3% less than expected and the average cost per claim was 5% less than expected. Across our other asbestos portfolios we had a combination of commutations, detailed actuarial studies and lower than expected incurred loss development, which all resulted in reductions in estimates of net ultimate losses.

Other

All other line of business changes in estimates of net ultimate losses were primarily due to the application of our reserving methodologies, favorable actual versus expected loss development, pro-active claim management and commutations.

The reduction of $65.4 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.

The amortization of deferred charge assets of $13.8 million was associated with retroactive reinsurance contracts where, at the inception of the contract, the estimated ultimate losses payable were in excess of premium received. Deferred charge assets are amortized over the estimated claim payment period of the related contract and are adjusted periodically to reflect new estimates of the amount and timing of the remaining loss payments.

The amortization of fair value adjustments of $12.9 million was related to the fair value adjustments associated with the acquisition of companies. On acquisition, we are required to fair value the net assets acquired, including the reinsurance balances recoverable and the liability for losses and LAE. The resulting fair value adjustments are then amortized over the expected life of the reinsurance balances recoverable and the liability for losses and LAE.

The increase in the fair value of liabilities for which we have elected the fair value option of $6.7 million was primarily due to decreases in the estimated duration of the net liabilities, partially offset by changes in the corporate bond yield.Year Ended December 31, 2017

The reduction in net incurred losses and LAE for the year ended December 31, 2017 of $190.7 million included net incurred losses and LAE of $5.9 million related to current period net earned premium from previously acquired businesses that renewed certain policies while being run-off. Excluding current period net incurred losses and LAE of $5.9 million, the reduction in net incurred losses and LAE liabilities relating to prior periods was $196.5 million, which was attributable to a reduction in estimates of net ultimate losses of $195.7 million, and a reduction in provisions for unallocated LAE of $54.1 million, relating to 2017 run-off activity, partially offset by an increase in the fair value of liabilities of $30.3 million related to our assumed retroactive reinsurance agreements for which we have elected the fair value option, the amortization of the deferred charge assets of $14.4 million and the amortization of fair value adjustments over the estimated payout period relating to companies acquired amounting to $10.1 million.

The reduction in estimates of prior period net ultimate losses of $195.7 million for the year ended December 31, 2017 included a net reduction in case and IBNR reserves of $774.6 million, partially offset by net losses paid of $578.9 million. For the year ended December 31, 2017, the overall change in our estimates of net ultimate losses related to prior periods by line of business within our Non-life Run-off was as presented in the table below:



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	105,731	$	(1,865	)	$	(76,837	)	$	27,029
Environmental	26,542		(9,438		)	(7,748		)	9,356
General Casualty	94,526		(54,292		)	(49,025		)	(8,791		)
Workers' Compensation	187,712		(190,924		)	(151,797		)	(155,009		)
Marine, aviation and transit	18,272		(9,322		)	(11,517		)	(2,567		)
Construction defect	33,802		(24,023		)	(42,804		)	(33,025		)
Professional indemnity/ Directors & Officers	33,402		(19,054		)	(24,559		)	(10,211		)
Motor	24,391		(15,990		)	(8,513		)	(112		)
Property	13,440		(11,196		)	(5,162		)	(2,918		)
All Other	41,070		(45,346		)	(15,138		)	(19,414		)
Total	$	578,888	$	(381,450	)	$	(393,100	)	$	(195,662	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

The $155.0 million reduction in estimates of net ultimate losses in our workers' compensation line of business arose primarily in five separate portfolios. Across these five portfolios, the reported incurred loss development was generally significantly lower than expected. When actual development is less than expected for a sustained period of time, across a significant volume of exposures, an updated actuarial analysis tends to indicate reductions in IBNR reserves. In addition, we continue to pro-actively manage and settle claims where possible, commute policies if appropriate and, through Paladin, we are able to achieve significant savings on medical costs through active claims management strategies over the life of the reported claims. All of these items reduce the estimates of net ultimate losses.

Construction Defect

The $33.0 million reduction in estimates of net ultimate losses in our construction defect line of business arose primarily due to lower than expected actual incurred development in one portfolio. The active claims management approach that our claims team adopted for the assumed exposures within this portfolio led to a significant reduction loss in the inventory of the assumed open claims of 73% during 2017. This reduction in exposure, when incorporated into our updated actuarial analysis, resulted in a reduction in estimates of net ultimate losses for this line of business.

Asbestos

The $27.0 million increase in estimates of net ultimate losses in our asbestos line of business resulted from a ground-up study performed by a consulting actuarial firm on one of our portfolios. This study resulted in the recording of additional reserves of $60.5 million due to a small number of accounts that experienced an increase in the notification of claims which are expected to attach to the excess policies that we reinsure. This increase was partially offset by favorable development of $33.5 million in our other portfolios of asbestos exposures arising primarily from lower than expected claim notifications.

Other

The reduction in provisions for bad debt of $1.5 million was a result of the favorable recoveries from reinsurers, the reduction in bad debt provisions for insolvent reinsurers as a result of distributions received and the reduction of specific provisions held for certain reinsurers.

The reduction of $54.1 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.

The amortization of deferred charge assets of $14.4 million was associated with retroactive reinsurance contracts where, at the inception of the contract, the estimated ultimate losses payable were in excess of premium received. Deferred charge assets are amortized over the estimated claim payment period of the related contract and are adjusted periodically to reflect new estimates of the amount and timing of the remaining loss payments.

The amortization of fair value adjustment of $10.1 million was related to the fair value adjustments associated with the acquisition of companies. On acquisition, we are required to fair value the net assets acquired, including the reinsurance balances recoverable and the liability for losses and LAE. The resulting fair value adjustments are then amortized over the expected life of the reinsurance balances recoverable and the liability for losses and LAE.

The increase in the fair value of liabilities for which we have elected the fair value option of $30.3 million was primarily due to decreases in the estimated duration of the net liabilities, partially offset by changes in the corporate bond yield.Year Ended December 31, 2016

The reduction in net incurred losses and LAE for the year ended December 31, 2016 of $285.9 million included net incurred losses and LAE of $5.8 million related to current period net earned premium, primarily for the run-off business acquired with Sussex. Excluding current period net incurred losses and LAE of $5.8 million, the reduction in net incurred losses and LAE liabilities relating to prior periods was $291.7 million, which was attributable to a reduction in estimates of net ultimate losses of $428.0 million, a reduction in provisions for unallocated LAE of $44.2 million, relating to 2016 run-off activity, and a reduction in the provision for bad debt of $13.8 million, partially offset by the amortization of the deferred charge assets of $168.8 million and the amortization of fair value adjustments over the estimated payout period relating to companies acquired amounting to $25.4 million.

The reduction in estimates of prior period net ultimate losses of $428.0 million for the year ended December 31, 2016 included a net reduction in case and IBNR reserves of $957.9 million, partially offset by net losses paid of $529.9 million. For the year ended December 31, 2016, the overall change in our estimates of net ultimate losses related to prior periods by line of business within our Non-life Run-off was as presented in the table below:



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	33,334	$	544		$	(59,173	)	$	(25,295	)
Environmental	12,233		7,922			(25,738		)	(5,583		)
General Casualty	83,821		(51,885		)	(47,209		)	(15,273		)
Workers' Compensation	255,886		(405,102		)	(173,846		)	(323,062		)
Marine, aviation and transit	15,885		(15,738		)	(7,773		)	(7,626		)
Construction defect	39,915		(19,491		)	(10,014		)	10,410
Professional indemnity/ Directors & Officers	32,397		(45,530		)	616			(12,517		)
Motor	11,788		(24,832		)	(4,103		)	(17,147		)
Property	29,203		(34,543		)	(13,137		)	(18,477		)
All Other	15,475		(19,513		)	(9,349		)	(13,387		)
Total	$	529,937	$	(608,168	)	$	(349,726	)	$	(427,957	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

The $323.1 million reduction in estimates of net ultimate losses in our workers' compensation line of business arose primarily in three separate portfolios. Across these three portfolios, the reported incurred loss development was generally significantly lower than expected. When actual development is lower than expected for a sustained period of time across a significant volume of exposures, an updated actuarial analysis tends to indicate reductions in IBNR reserves. In one specific portfolio, having observed a general trend of lower than expected actual development over a sustained period of time, we revised the medical inflation assumption used to estimate case and LAE reserves for long term disability claimants. This change to an actuarial assumption, driven by observed actual development, resulted in a significant reduction in our estimates of net ultimate losses of $234.5 million, primarily across accident years 1991 through 2001. This was partially offset by a significant reduction in the related deferred charge asset as described below.

Asbestos

The $25.3 million reduction in estimates of net ultimate losses in our asbestos line of business arose primarily due to six commutations, which resulted in a $13.1 million reduction in net ultimate losses. The remainder of the reduction arose due to lower than expected actual loss development.

Other

All other line of business changes in estimates of net ultimate losses were primarily due to the application of our reserving methodologies, generally favorable actual versus expected loss development, pro-active claim management and commutations.

The reduction in provisions for bad debt of $13.8 million was a result of the favorable recoveries from reinsurers, and the reduction in bad debt provisions for insolvent reinsurers as a result of distributions received, partially offset by additional provisions for certain reinsurers.

The reduction of $44.2 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.

The amortization of deferred charge assets of $168.8 million was associated with retroactive reinsurance contracts where, at the inception of the contract, the estimated ultimate losses payable were in excess of premium received. Deferred charge assets are amortized over the estimated claim payment period of the related contract and are adjusted periodically to reflect new estimates of the amount and timing of the remaining loss payments. In the year ended December 31, 2016, the amortization of the deferred charge asset included an impairment of $38.6 million, which was offset in earnings by favorable loss reserve development.

The amortization of fair value adjustment of $25.4 million was related to the fair value adjustments associated with the acquisition of companies. On acquisition, we are required to fair value the net assets acquired, including the reinsurance balances recoverable and the liability for losses and LAE. The resulting fair value adjustments are then amortized over the expected life of the reinsurance balances recoverable and the liability for losses and LAE.Disclosures of Incurred and Paid Loss Development, IBNR, Claims Counts and Payout Percentages

The following tables provides a breakdown of gross and net losses and LAE reserves, consisting of Outstanding Loss Reserve ("OLR") and IBNR by line of business and adjustments for fair value resulting from business combinations, adjustments for where we elected the fair value option, deferred charge assets and ULAE, as of December 31, 2018 and 2017:



	2018
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Asbestos	$	341,544	$	1,275,476	$	1,617,020		$	321,356	$	1,171,754	$	1,493,110
Environmental	96,665		126,035		222,700			93,095		117,384		210,479
General casualty	500,033		379,484		879,517			416,097		298,612		714,709
Workers' compensation/personal accident	1,454,178		832,615		2,286,793			1,115,116		537,782		1,652,898
Marine, aviation and transit	301,783		72,888		374,671			227,994		78,023		306,017
Construction defect	20,712		99,288		120,000			19,310		94,736		114,046
Professional indemnity/Directors & Officers	603,665		216,839		820,504			426,020		166,898		592,918
Motor	564,307		321,992		886,299			414,847		304,874		719,721
Property	168,267		37,631		205,898			160,873		36,817		197,690
Other	220,615		165,519		386,134			175,289		111,453		286,742
	$	4,271,769	$	3,527,767	$	7,799,536		$	3,369,997	$	2,918,333	$	6,288,330
Fair value adjustments					(217,527		)					(203,183		)
Fair value adjustments - fair value option					(374,752		)					(244,013		)
Deferred charge on retroactive reinsurance					—							(86,585		)
ULAE					333,405							333,405
Total					$	7,540,662						$	6,087,954



	2017
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Asbestos	$	366,446	$	1,434,598	$	1,801,044		$	341,355	$	1,337,467	$	1,678,822
Environmental	95,801		95,259		191,060			91,049		93,345		184,394
General casualty	344,425		266,526		610,951			276,791		194,747		471,538
Workers' compensation/personal accident	1,458,430		748,949		2,207,379			889,265		371,161		1,260,426
Marine, aviation and transit	109,102		56,284		165,386			90,101		51,904		142,005
Construction defect	28,701		135,608		164,309			27,406		122,307		149,713
Professional indemnity/Directors & Officers	214,803		40,265		255,068			181,027		39,591		220,618
Motor	242,213		30,734		272,947			98,866		19,321		118,187
Property	65,445		9,706		75,151			52,236		8,554		60,790
Other	260,337		85,998		346,335			205,322		75,376		280,698
	$	3,185,703	$	2,903,927	$	6,089,630		$	2,253,418	$	2,313,773	$	4,567,191
Fair value adjustments					(125,998		)					(113,028		)
Fair value adjustments - fair value option					(314,748		)					(182,764		)
Deferred charge on retroactive reinsurance					—							(80,192		)
ULAE					300,588							300,588
Total					$	5,949,472						$	4,491,795

In addition to the breakdown of our non-life run-off reserves by line of business we also monitor our reserves by acquisition year. The acquisition year is the year in which the net reserves were acquired via a business acquisition or assumed via a retroactive reinsurance agreement. By analyzing the loss development tables by acquisition year on a prospective basis, the impact of the take-on positions from year to year does not distort the loss development tables.

The following table provides a summary of our net loss reserves, prior to provisions for bad debt, fair value adjustments, deferred charge assets and ULAE as of December 31, 2018, by year of acquisition and by significant line of business:



	Acquisition Year
	2008 and Prior		2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		Total
Asbestos	$	205,298	$	3,936	$	43,316	$	17	$	653	$	11,860	$	—	$	931	$	440,388	$	709,758	$	50,139	$	1,466,296
Environmental	35,045		1,331		8,847		87		—		—		—		—		97,424		32,007		29,238		203,979
General casualty	69,876		3,759		15,743		29,110		13,715		15,300		35,645		46,730		5,610		99,801		372,058		707,347
Workers' compensation/personal accident	4,444		218		66,030		177,572		2,524		77,629		—		426,225		315,788		80,525		498,872		1,649,827
Marine, aviation and transit	4,127		7,519		4,132		10,739		—		—		13,968		2,126		—		75,303		186,721		304,635
Construction defect	—		—		230		413		—		—		—		55,727		29,569		28,102		—		114,041
Professional indemnity/Directors & Officers	6,778		5,278		5,622		10,040		36,836		—		36,252		—		90,260		—		401,029		592,095
Motor	24,407		1,560		6,097		209		1,290		617		332		20,820		1,050		7,201		653,103		716,686
Property	4,099		1,553		5,108		672		9,352		—		14,268		6,112		—		2,633		151,939		195,736
All Other	19,773		3,560		16,083		1,134		8,291		3,663		16,453		16,044		26,474		135,951		35,709		283,135
Total	$	373,847	$	28,714	$	171,208	$	229,993	$	72,661	$	109,069	$	116,918	$	574,715	$	1,006,563	$	1,171,281	$	2,378,808	$	6,233,777

The table below reconciles the net loss reserves, prior to provisions for bad debt, fair value adjustments, deferred charge assets and ULAE as of December 31, 2018, by significant line of business to the line of business table presented above:



	2018
	Total Net Reserves per all Acquisition Years		Provision for Bad Debt		Total Net Reserves
Asbestos	$	1,466,296	$	26,814	$	1,493,110
Environmental	203,979		6,500		210,479
General casualty	707,347		7,362		714,709
Workers' compensation/personal accident	1,649,827		3,071		1,652,898
Marine, aviation and transit	304,635		1,382		306,017
Construction defect	114,041		5		114,046
Professional indemnity/Directors & Officers	592,095		823		592,918
Motor	716,686		3,035		719,721
Property	195,736		1,954		197,690
All Other	283,135		3,607		286,742
Total	$	6,233,777	$	54,553	$	6,288,330

Loss development tables have been provided for acquisition years 2009 through 2018. In addition, the workers' compensation line of business in the 2015 acquisition year; the asbestos, environmental and workers' compensation lines of business in the 2016 acquisition year; the asbestos and general casualty lines of business in the 2017 acquisition year; and the general casualty, workers' compensation, marine, aviation & transit, professional indemnity/directors & officers, motor and property lines of business in the 2018 acquisition year, are significant and we have provided additional loss development tables for those lines of business within those acquisition years.

Our non-life run-off segment is unique within the insurance industry in that legacy reserves are continuously being acquired and added to this segment through business acquisitions or through retroactive reinsurance agreements. Accordingly, it would not be appropriate to extrapolate redundancies or deficiencies into the future from the loss development tables provided below. Acquired and assumed reserves arising from business acquisitions and retroactive reinsurance agreements are presented on a full prospective basis.

The following tables set forth information about incurred and paid loss development, total IBNR reserves and cumulative loss frequency related to our 2009 through 2018 acquisition years within the Non-Life Run-off segment as at December 31, 2018. In addition, we have also presented loss development tables for the significant lines of business within certain acquisition years. The information related to incurred and paid loss development for the years ended December 31, 2009 through 2017 is presented as supplementary information and is therefore unaudited.Business Acquired and Contracts Incepting in the Year Ended December 31, 2009



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	131,793	$	96,548	$	91,326	$	83,838	$	81,452	$	75,169	$	68,177	$	63,682	$	63,950	$	66,807	$	63,986	$	9,519	35,356
	$	131,793																			$	63,986	$	9,519	35,356

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	685	$	5,630	$	12,385	$	13,836	$	19,409	$	23,324	$	25,377	$	30,210	$	32,498	$	35,272
																					$	35,272
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																					$	28,714

Business Acquired and Contracts Incepting in the Year Ended December 31, 2010



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																					As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,096,347	$	854,415	$	849,383	$	883,938	$	864,842	$	796,083	$	794,240	$	733,381	$	737,257	$	742,236	$	48,175	162,496
	$	1,096,347																	$	742,236	$	48,175	162,496

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	101,867	$	218,628	$	377,473	$	456,666	$	483,460	$	510,815	$	527,521	$	555,686	$	571,028
																			$	571,028
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																			$	171,208

Business Acquired and Contracts Incepting in the Year Ended December 31, 2011



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)			2016 (unaudited)			2017 (unaudited)			2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	584,503	$	619,722	$	584,875	$	489,467	$	422,779	$	369,809		$	314,713		$	269,695		$	256,086		$	41,675	112,695
2009	794		651		605		360		365		362			360			485			484			—		—
2010	285		412		450		140		140		140			139			142			142			—		26
2011	—		102		36		45		54		61			71			79			86			—		19
2012	—				122		11		10		10			10			17			18			—		7
2013	—						23		43		15			15			15			15			—		16
2014	—								1		3			3			3			18			—		14
2015	—										—			(2		)	(2		)	32			5		—
2016	—													2			(139		)	(111		)	11		—
2017	—																—			21			6		2
2018	—																			7			9		1
	$	585,582																		$	256,798		$	41,706	112,780

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)			2016 (unaudited)			2017 (unaudited)			2018
2008 and Prior			$	59,722	$	96,783	$	91,615	$	21,241	$	14,849		$	23,759		$	15,936		$	26,176
2009			164		326		336		357		359			359			484			484
2010			91		115		140		139		140			139			142			142
2011			27		36		46		54		61			71			79			86
2012					6		10		10		10			10			17			17
2013							6		11		15			15			15			15
2014									1		3			3			3			4
2015											(1		)	(2		)	(2		)	2
2016														2			(153		)	(125		)
2017																	—			3
2018																				1
																				$	26,805
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																				$	229,993

Business Acquired and Contracts Incepting in the Year Ended December 31, 2012



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																	As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	264,599	$	258,299	$	239,637	$	228,316	$	211,171	$	203,818	$	197,435	$	190,413	$	14,730	39,243
2009	50,431		50,351		58,008		63,730		68,503		66,344		66,507		65,567		4,183		8,402
2010	848		852		2,710		2,602		2,378		2,474		1,404		1,268		97		6
2011	1,388		1,001		989		984		972		971		969		964		—		5
2012	52		61		46		254		257		329		329		156		—		6
2013	—				626		112		334		342		342		127		—		5
2014	—						2,492		2,792		1,423		1,221		1,116		63		7
2015	—								545		1,125		690		690		—		5
2016	—										61		1,196		1,039		193		3
2017	—												71		156		23		4
2018	—														—		—		—
	$	317,318													$	261,496	$	19,289	47,686

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	2,688	$	44,936	$	72,959	$	95,345	$	113,135	$	120,239	$	130,651
2009			124		22,143		34,680		42,632		48,856		51,911		54,517
2010			171		472		631		699		727		764		792
2011			112		463		693		809		866		924		964
2012			28		46		46		48		156		156		156
2013					102		112		127		127		127		127
2014							63		209		429		630		807
2015									105		109		690		690
2016											2		52		91
2017													12		40
2018															—
															$	188,835
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance															$	72,661

Business Acquired and Contracts Incepting in the Year Ended December 31, 2013



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance															As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	141,479	$	154,707	$	161,367	$	149,397	$	140,275	$	163,936	$	117,398	$	20,406	35,539
2009	73,355		79,859		84,556		83,495		85,782		77,425		75,458		2,249		10,798
2010	110,815		118,740		113,479		133,045		135,120		124,905		122,412		4,000		10,968
2011	94,482		99,857		99,107		100,243		95,848		87,913		86,554		2,203		9,063
2012	131,066		127,271		121,328		118,085		114,772		110,045		107,853		2,654		3,503
2013	13,062		90,739		91,634		88,920		85,791		81,732		80,036		2,202		5,676
2014	—				4,514		3,714		3,425		16,800		16,225		124		175
2015	—						265		280		982		329		136		2
2016	—								103		71		70		4		—
2017	—										30		13		—		—
2018	—												22		4		—
	$	564,259											$	606,370	$	33,982	75,724

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	24,794	$	42,185	$	56,732	$	67,472	$	64,574	$	66,269
2009			23,624		41,720		52,664		60,486		59,810		65,201
2010			24,617		48,579		75,114		92,540		98,098		104,253
2011			30,323		52,455		63,952		70,498		75,055		77,096
2012			33,361		59,095		74,663		86,916		92,445		96,780
2013			17,022		37,653		52,638		62,876		68,866		71,487
2014					993		1,747		2,256		15,804		15,959
2015							43		102		112		165
2016									34		64		65
2017											9		13
2018													13
													$	497,301
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance													$	109,069

Business Acquired and Contracts Incepting in the Year Ended December 31, 2014



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance													As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	6,408	$	4,008	$	12,807	$	10,342	$	10,890	$	10,005	$	(82	)	3,102
2009	16,653		16,660		11,135		11,188		12,142		11,799		1,010			3,250
2010	88,445		85,176		100,646		133,824		119,628		115,867		6,740			6,416
2011	71,579		127,132		153,758		133,072		135,430		141,102		12,270			6,667
2012	111,052		116,752		177,374		185,033		178,528		165,648		8,088			5,076
2013	86,920		75,991		93,508		82,007		86,415		85,571		13,620			3,162
2014	—		14,448		9,917		8,740		7,394		6,154		4,328			1,113
2015	—				33,543		20,004		20,738		18,736		1,873			184
2016	—						393		1,038		4,728		87			37
2017	—								5,071		4,087		998			32
2018	—										6		4			13
	$	381,057									$	563,703	$	48,936		29,052

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	—	$	6,195	$	7,509	$	8,097	$	8,079
2009			6,244		5,956		8,140		8,256		8,525
2010			29,403		69,303		86,997		101,876		101,494
2011			83,733		109,089		109,761		107,670		121,972
2012			47,291		89,180		119,165		127,955		125,635
2013			21,624		39,847		47,052		55,262		60,093
2014			1,455		2,479		3,260		3,954		5,902
2015					1,740		4,282		11,466		12,956
2016							20		556		571
2017									537		1,553
2018											5
											$	446,785
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance											$	116,918

Business Acquired and Contracts Incepting in the Year Ended December 31, 2015



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	937,917	$	851,896	$	558,013	$	518,739	$	467,433	$	87,408	10,507
2009	15,534		21,850		24,324		22,490		25,519		5,050		968
2010	49,125		53,990		52,966		55,899		51,485		10,976		2,284
2011	124,473		137,175		131,062		129,445		127,203		27,098		5,109
2012	178,981		187,333		197,756		200,809		192,957		33,953		4,504
2013	229,274		189,521		196,290		199,681		188,635		28,841		5,143
2014	143,795		142,596		137,196		142,468		136,522		12,854		10,664
2015	22,811		69,337		68,322		65,446		63,986		4,703		20,998
2016	—				14,329		12,646		12,900		1,039		3,311
2017	—						4,065		4,502		325		855
2018	—								2,979		2,164		242
	$	1,701,910							$	1,274,121	$	214,411	64,585

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	17,038	$	58,929	$	89,533	$	112,037
2009			2,336		5,400		10,340		13,953
2010			9,191		15,304		19,675		25,640
2011			33,826		55,084		70,985		86,339
2012			52,728		94,781		119,413		142,208
2013			46,761		89,882		120,448		145,688
2014			30,747		64,381		90,801		109,217
2015			20,653		38,309		46,202		51,467
2016					5,386		7,112		8,385
2017							2,312		3,912
2018									560
									$	699,406
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance									$	574,715

Business Acquired and Contracts Incepting in the Year Ended December 31, 2015 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	919,158	$	822,252	$	526,222	$	485,189	$	435,607	$	80,160	7,963
2009	8,741		12,207		12,350		11,559		12,069		1,941		171
2010	31,919		34,360		31,402		30,407		27,360		4,003		468
2011	76,789		73,723		69,009		68,013		66,216		6,325		1,235
2012	120,298		110,007		108,251		106,625		99,446		10,793		1,800
2013	146,237		124,726		122,238		121,010		112,590		13,657		2,369
2014	82,141		86,852		82,038		83,095		77,884		6,223		3,665
2015	4,089		18,647		12,623		13,488		12,071		793		2,895
2016	—				873		955		583		138		38
2017	—						358		61		48		10
2018	—								—		—		1
	$	1,389,372							$	843,887	$	124,081	20,615

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	15,493	$	53,889	$	79,228	$	97,797
2009			1,061		2,952		5,854		7,171
2010			4,352		8,446		11,906		16,141
2011			16,032		30,462		39,635		50,470
2012			25,103		52,851		66,092		79,367
2013			27,737		55,675		75,065		91,559
2014			17,824		38,051		53,308		65,561
2015			3,034		5,672		7,917		9,169
2016					134		363		417
2017							2		10
2018									—
									$	417,662
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance									$	426,225

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,253,129	$	1,264,108	$	1,289,089	$	1,270,673	$	441,087	21,229
2009	29,081		28,961		31,299		28,023		9,296		739
2010	15,312		15,312		16,599		14,282		4,542		613
2011	17,291		17,291		19,920		19,754		3,673		747
2012	13,717		13,717		17,020		14,765		4,663		748
2013	373		373		1,312		1,237		946		96
2014	391		391		1,380		1,056		765		43
2015	—		—		—		—		—		—
2016	—		—		—		—		—		—
2017	—				—		—		—		—
2018	—						—		—		—
	$	1,329,294					$	1,349,790	$	464,972	24,215

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	94,972	$	208,671	$	311,721
2009			2,832		7,946		10,360
2010			2,068		4,137		5,905
2011			2,758		6,647		8,218
2012			2,734		5,206		6,461
2013			145		191		278
2014			178		207		284
2015			—		—		—
2016			—		—		—
2017					—		—
2018							—
							$	343,227
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	1,006,563

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Asbestos



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	506,930	$	505,241	$	565,448	$	563,630	$	325,953	1,397
	$	506,930					$	563,630	$	325,953	1,397

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	20,256	$	70,443	$	123,242
							123,242
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	440,388

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Environmental



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	118,691	$	118,691	$	129,591	$	136,557	$	41,424	947
	$	118,691					$	136,557	$	41,424	947

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	8,330	$	25,633	$	39,133
							39,133
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	97,424

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	408,373	$	406,992	$	369,993	$	362,829	$	27,133	8,416
2009	20,892		20,772		21,474		18,476		5,637		191
2010	8,191		8,191		9,767		8,572		2,655		268
2011	15,376		15,376		16,399		16,501		1,566		473
2012	13,074		13,074		15,465		13,276		3,518		607
2013	—		—		—		—		—		—
2014	—		—		—		—		—		—
2015	—		—		—		—		—		—
2016	—		—		—		—		—		—
2017	—				—		—		—		—
2018	—						—		—		—
	$	465,906					$	419,654	$	40,509	9,955

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	32,768	$	58,133	$	81,166
2009			1,482		4,439		5,918
2010			1,219		2,565		3,230
2011			2,631		5,871		7,305
2012			2,638		5,028		6,247
2013			—		—		—
2014			—		—		—
2015			—		—		—
2016			—		—		—
2017					—		—
2018							—
							$	103,866
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	315,788

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance								As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2017 (unaudited)			2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,364,332	$	1,297,232		$	1,233,017	$	786,519	9,003
2009	36,488		35,015			32,763		12,799		20
2010	33,609		28,417			18,901		6,633		36
2011	40,742		29,226			25,389		8,388		7
2012	43,647		34,946			31,230		8,237		11
2013	35,667		30,029			28,134		5,623		10
2014	32,858		20,315			16,984		3,306		19
2015	8,808		6,494			7,002		982		8
2016	362		(4		)	126		58		3
2017	—		174			—		—		1
2018	—					—		—		—
	$	1,596,513				$	1,393,546	$	832,545	9,118

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2017 (unaudited)			2018
2008 and Prior			$	71,708		$	150,472
2009			7,088			11,288
2010			4,286			7,393
2011			4,125			9,257
2012			10,348			15,371
2013			9,509			15,712
2014			6,482			8,986
2015			1,361			3,720
2016			(56		)	66
2017			4			—
2018						—
						$	222,265
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	1,171,281

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017 - Asbestos



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	888,394	$	847,036	$	766,788	$	613,475	4,477
2009	—		—		—		—		—
2010	—		—		—		—		—
2011	—		—		—		—		—
2012	—		—		—		—		—
2013	—		—		—		—		—
	$	888,394			$	766,788	$	613,475	4,477

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2017 (unaudited)		2018
2008 and Prior			$	19,733	$	57,030
2009			—		—
2010			—		—
2011			—		—
2012			—		—
2013			—		—
2014			—		—
2015			—		—
2016			—		—
2017			—		—
2018					—
					57,030
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance					$	709,758

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017 - General Casualty



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance										As of December 31, 2018
				For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired			2017 (unaudited)			2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	98,580		$	90,256		$	79,420		$	17,112	2,371
2009	17,641			18,897			16,904			5,638		1
2010	14,642			10,985			7,321			1,883		1
2011	17,902			11,459			11,418			4,529		1
2012	16,756			15,861			17,398			4,796		1
2013	16,870			17,720			17,358			3,159		1
2014	12,730			6,651			6,526			1,590		1
2015	3,112			3,464			4,424			818		1
2016	(72		)	(77		)	(21		)	56		1
2017	—			—			—			—		1
2018	—						—			—		—
	$	198,161					$	160,748		$	39,581	2,380

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
				For the Years Ended December 31,
Accident Year				2017 (unaudited)			2018
2008 and Prior				$	10,363		$	22,697
2009				3,341			6,237
2010				1,958			3,659
2011				753			3,724
2012				6,850			10,050
2013				5,927			9,667
2014				1,581			2,426
2015				469			2,487
2016				—			—
2017				—			—
2018							—
							60,947
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	99,801

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	486,710	$	322,299	$	108,367	199,629
2009	68,375		60,850		4,586		9,862
2010	88,753		109,592		33,728		13,724
2011	156,555		145,051		26,322		13,995
2012	220,662		215,610		47,105		14,245
2013	261,673		265,032		70,607		15,928
2014	405,168		448,775		136,884		19,020
2015	348,524		467,058		155,456		23,632
2016	169,194		171,134		84,128		2,095
2017	206,944		207,082		130,071		4,238
2018	318,474		318,474		222,772		5,032
	$	2,731,032	$	2,730,957	$	1,020,026	321,400

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	26,326
2009			15,338
2010			11,010
2011			26,671
2012			31,391
2013			41,824
2014			93,171
2015			100,091
2016			6,275
2017			52
2018			—
			$	352,149
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	2,378,808

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - General Casualty



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	84,065	$	40,977	$	9,892	44,790
2009	9,157		7,123		1,437		1,006
2010	28,863		22,098		4,240		1,856
2011	16,394		14,709		2,302		1,392
2012	33,326		30,385		7,501		1,549
2013	38,708		53,146		16,166		1,563
2014	54,487		73,680		22,038		2,149
2015	74,380		87,639		32,230		3,296
2016	27,306		27,306		15,306		252
2017	36,246		36,246		24,289		232
2018	35,770		35,770		23,606		186
	$	438,702	$	429,079	$	159,007	58,271

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	3,181
2009			850
2010			5,981
2011			2,480
2012			1,819
2013			10,855
2014			14,645
2015			17,210
2016			—
2017			—
2018			—
			$	57,021
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	372,058

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	83,867	$	84,667		$	20,321	1,483
2009	22,548		17,287			6,039		259
2010	24,914		25,231			11,209		362
2011	30,399		25,693			13,686		419
2012	29,438		29,880			15,481		484
2013	38,737		39,263			21,095		888
2014	69,212		70,525			37,658		1,380
2015	39,430		39,794			23,340		1,408
2016	49,476		49,476			32,657		886
2017	57,899		57,899			43,036		993
2018	68,486		68,486			59,043		885
	$	514,406	$	508,201		$	283,565	9,447

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	—
2009			3,788
2010			316
2011			(1,402		)
2012			520
2013			1,527
2014			3,238
2015			1,342
2016			—
2017			—
2018			—
			$	9,329
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	498,872

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Marine, Aviation & Transit



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR			Cumulative Number of Claims
2008 and Prior	$	38,020	$	25,608		$	(6,123	)	54,343
2009	8,569		5,091			(3,636		)	2,649
2010	3,402		3,700			5,905			3,248
2011	8,795		10,053			646			3,962
2012	16,038		12,198			(1,141		)	4,265
2013	44,550		36,642			4,640			5,699
2014	64,292		84,106			13,641			5,838
2015	32,534		69,590			10,864			6,516
2016	29		29			24			79
2017	134		134			120			71
2018	1,399		1,399			1,386			66
	$	217,762	$	248,550		$	26,326		86,736

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	859
2009			2,410
2010			(3,887		)
2011			5,094
2012			1,323
2013			6,093
2014			25,299
2015			24,638
2016			—
2017			—
2018			—
			$	61,829
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	186,721

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Professional Indemnity/Directors & Officers.



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	140,108	$	72,453	$	8,451		48,133
2009	30,592		21,317		(9,645		)	4,246
2010	35,237		39,743		8,473			4,251
2011	39,028		49,320		10,443			3,736
2012	53,094		66,622		13,273			3,249
2013	52,894		59,615		16,106			3,186
2014	83,767		104,639		36,447			3,518
2015	48,715		96,152		48,769			3,804
2016	—		—		—			—
2017	—		—		—			—
2018	—		—		—			—
	$	483,435	$	509,861	$	132,317		74,123

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	20,413
2009			6,891
2010			3,969
2011			12,927
2012			16,105
2013			10,992
2014			23,424
2015			14,111
2016			—
2017			—
2018			—
			$	108,832
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	401,029

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Motor



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	115,064	$	11,687	$	3,708		265
2009	8,370		3,922		986			86
2010	23,614		13,761		(206		)	920
2011	41,740		36,047		1,539			1,219
2012	50,413		53,766		4,875			1,611
2013	50,493		66,587		15,539			667
2014	76,186		98,361		28,650			1,203
2015	87,977		125,513		30,960			1,371
2016	79,459		86,144		36,147			701
2017	90,289		90,479		59,706			2,766
2018	150,684		150,684		112,294			3,726
	$	774,289	$	736,951	$	294,198		14,535

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	1,518
2009			887
2010			4,578
2011			6,158
2012			12,600
2013			10,703
2014			21,007
2015			20,070
2016			6,275
2017			52
2018			—
			$	83,848
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	653,103

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Property



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR			Cumulative Number of Claims
2008 and Prior	$	3,441	$	8,012		$	(393	)	49,684
2009	623		579			(266		)	1,387
2010	3,095		2,186			2			2,776
2011	2,655		2,915			1,043			2,965
2012	4,571		3,276			(15		)	2,770
2013	7,640		8,771			305			3,657
2014	14,663		14,249			873			4,389
2015	44,595		46,448			456			6,649
2016	8,152		8,152			(34		)	174
2017	22,267		22,267			2,860			174
2018	61,894		61,894			26,202			166
	$	173,596	$	178,749		$	31,033		74,791

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	257
2009			39
2010			119
2011			273
2012			(236		)
2013			1,640
2014			3,958
2015			20,760
2016			—
2017			—
2018			—
			$	26,810
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	151,939

Annual Historical Duration of Claims

The following is unaudited supplementary information, which presents the annual percentage payout since the year of acquisition, by year of acquisition and significant line of business within each acquisition year:



	Annual Percentage Payout of Incurred Losses since Year of Acquisition, Net of Reinsurance
Year of Acquisition	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
2009 - All lines of business	1.07	%	7.73	%	10.56	%	2.27	%	8.71	%	6.12	%	3.21	%	7.55	%	3.57	%	4.34	%
2010 - All lines of business	13.72	%	15.73	%	21.40	%	10.67	%	3.61	%	3.69	%	2.25	%	3.79	%	2.07	%
2011 - All lines of business	23.37	%	14.51	%	(1.99	)%	(27.39	)%	(2.48	)%	3.47	%	(3.05	)%	4.01	%
2012 - All lines of business	1.19	%	24.87	%	15.69	%	11.77	%	9.34	%	4.24	%	5.10	%
2013 - All lines of business	25.35	%	21.26	%	15.65	%	10.82	%	5.22	%	3.70	%
2014 - All lines of business	33.66	%	23.78	%	11.07	%	7.00	%	3.75	%
2015 - All lines of business	16.74	%	16.81	%	11.72	%	9.62	%
2015 - Workers' compensation	13.11	%	16.29	%	10.81	%	9.28	%
2016 - All lines of business	7.83	%	9.43	%	8.17	%
2016 - Asbestos	3.59	%	8.90	%	9.37	%
2016 - Environment	6.10	%	12.67	%	9.89	%
2016 - Workers' Compensation	9.71	%	8.41	%	6.63	%
2017 - All lines of business	8.24	%	7.71	%
2017 - Asbestos	2.57	%	4.86	%
2017 - General Casualty	19.44	%	18.48	%
2018 - All lines of business	12.89	%
2018 - General Casualty	13.29	%
2018 - Workers' Compensation	1.84	%
2018 - Marine, Aviation & Transit	24.88	%
2018 - Professional Indemnity/Directors & Officers	21.35	%
2018 - Motor	11.38	%
2018 - Property	15.00	%

AtriumThe table below provides a reconciliation of the beginning and ending liability for losses and LAE for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Balance as at January 1	$	240,873		$	212,122		$	201,017
Less: reinsurance reserves recoverable	40,531			30,009			25,852
Net balance as at January 1	200,342			182,113			175,165
Net incurred losses and LAE:
Current period	83,627			90,359			71,358
Prior periods	(13,817		)	(20,940		)	(12,971		)
Total net incurred losses and LAE	69,810			69,419			58,387
Net paid losses:
Current period	(35,537		)	(24,571		)	(23,582		)
Prior periods	(28,969		)	(31,107		)	(24,416		)
Total net paid losses	(64,506		)	(55,678		)	(47,998		)
Effect of exchange rate movement	(3,130		)	4,488			(3,441		)
Net balance as at December 31	202,516			200,342			182,113
Plus: reinsurance reserves recoverable	38,768			40,531			30,009
Balance as at December 31	$	241,284		$	240,873		$	212,122

Net incurred losses and LAE in the Atrium segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period		Total
Net losses paid	$	28,969		$	35,537	$	64,506		$	31,107		$	24,571	$	55,678		$	24,416		$	23,582	$	47,998
Net change in case and LAE reserves	(10,161		)	16,492		6,331			(13,324		)	21,662		8,338			(13,115		)	12,967		(148		)
Net change in IBNR reserves	(27,507		)	31,598		4,091			(35,650		)	43,329		7,679			(20,543		)	34,243		13,700
Increase (reduction) in estimates of net ultimate losses	(8,699		)	83,627		74,928			(17,867		)	89,562		71,695			(9,242		)	70,792		61,550
Increase in provisions for bad debt	—			—		—			89			70		159			—			—		—
Increase (reduction) in provisions for unallocated LAE	—			—		—			(442		)	727		285			(421		)	566		145
Amortization of fair value adjustments	(5,118		)	—		(5,118		)	(2,720		)	—		(2,720		)	(3,308		)	—		(3,308		)
Net incurred losses and LAE	$	(13,817	)	$	83,627	$	69,810		$	(20,940	)	$	90,359	$	69,419		$	(12,971	)	$	71,358	$	58,387

Disclosures of Incurred and Paid Loss Development, IBNR, Claims Counts and Payout Percentages

The following tables provide a breakdown of the gross and net losses and LAE by line of business and the fair value adjustments resulting from business acquisitions and ULAE as of December 31, 2018 and 2017 for the Atrium segment:



	2018
	Gross						Net
	OLR		IBNR		Total		OLR		IBNR		Total
	(in thousands of U.S. dollars)
Marine, Aviation and Transit	$	32,999	$	36,011	$	69,010	$	21,460	$	24,207	$	45,667
Binding Authorities	28,512		59,302		87,814		26,601		57,016		83,617
Reinsurance	18,547		27,653		46,200		15,180		24,823		40,003
Accident and Health	4,972		6,348		11,320		4,225		5,837		10,062
Non-Marine Direct and Facultative	9,855		11,207		21,062		8,529		9,389		17,918
Total	$	94,885	$	140,521	$	235,406	$	75,995	$	121,272	$	197,267
Fair value adjustments					3,476						2,847
ULAE					2,402						2,402
Total					$	241,284					$	202,516



	2017
	Gross						Net
	OLR		IBNR		Total		OLR		IBNR		Total
	(in thousands of U.S. dollars)
Marine, Aviation and Transit	$	24,581	$	46,138	$	70,719	$	20,177	$	28,551	$	48,728
Binding Authorities	26,115		51,896		78,011		24,158		49,486		73,644
Reinsurance	14,381		34,489		48,870		13,815		26,336		40,151
Accident and Health	3,716		5,518		9,234		3,296		4,994		8,290
Non-Marine Direct and Facultative	9,570		12,467		22,037		9,444		9,665		19,109
Total	$	78,363	$	150,508	$	228,871	$	70,890	$	119,032	$	189,922
Fair value adjustments					9,547						7,965
ULAE					2,455						2,455
Total					$	240,873					$	200,342

The Atrium segment comprises only 3% of the total consolidated gross liability for losses and LAE as at December 31, 2018 and therefore has not been disaggregated further for purposes of presenting the accident year disclosures below.The following tables set forth information about incurred and paid loss development information for the Atrium segment as at December 31, 2018. The information related to incurred and paid loss development for the years ended December 31, 2009 through 2017 is presented as supplementary information and is therefore unaudited. Information about total IBNR reserves and cumulative loss frequency as at December 31, 2018, including expected development on reported losses included within the net incurred losses and allocated LAE amounts for the Atrium segment, are set forth in the table below.



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of December 31, 2018
Accident Year	2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	500,211		503,236		549,063		538,463		521,835		519,162		515,066		512,187		510,687		499,948		5,514		1,439
2009	27,570		40,073		56,949		51,804		48,592		47,663		45,919		45,197		44,947		54,509		1,112		216
2010			26,676		64,641		57,524		51,433		47,309		45,776		45,293		44,049		43,501		863		280
2011					85,641		84,006		72,297		70,524		68,799		67,505		66,773		66,317		1,487		378
2012							70,040		57,094		55,745		53,582		51,800		50,880		50,399		989		517
2013									58,144		63,518		57,599		54,288		51,534		51,894		2,405		829
2014											68,975		69,230		65,812		60,255		57,384		5,237		1,290
2015													69,347		71,112		63,198		59,906		9,190		2,183
2016															72,753		74,799		69,704		14,229		3,856
2017																	89,814		94,485		27,401		6,287
2018																			84,612		52,845		5,590
																	Total		$	1,132,659	$	121,272	22,865
⁽¹⁾ Total of IBNR plus expected development on reported losses.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	438,313	$	461,160	$	472,617	$	480,751	$	488,939	$	492,516	$	496,718	$	498,426	$	499,533	$	497,063
2009	11,910		27,487		34,408		37,887		39,882		41,069		41,741		42,023		42,278		43,212
2010			11,425		25,006		32,075		36,349		38,815		39,829		40,416		40,989		41,151
2011					16,991		39,667		51,975		58,114		62,012		63,351		64,631		64,102
2012							11,211		31,366		37,869		42,026		44,308		45,194		46,757
2013									14,552		31,972		40,314		43,375		45,249		45,963
2014											17,524		34,232		41,425		46,663		48,298
2015													11,993		29,562		38,806		44,324
2016															13,665		34,408		43,992
2017																	14,312		47,500
2018																			13,030
																	Total		$	935,392
					Total outstanding liabilities for unpaid losses and LAE, net of reinsurance														$	197,267

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the Atrium segment for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	197,267
Reinsurance recoverable on unpaid losses	38,139
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	235,406

The following is unaudited supplementary information for average annual historical duration of claims within the Atrium segment:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Atrium	22.47	%	32.32	%	14.77	%	8.28	%	4.37	%	1.93	%	1.90	%	0.35	%	0.42	%	1.71	%

StarStoneThe table below provides a reconciliation of the beginning and ending liability for losses and LAE for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Balance as at January 1	$	1,207,743		$	1,059,382		$	933,678
Less: reinsurance reserves recoverable	452,017			357,231			299,783
Net balance as at January 1	755,726			702,151			633,895
Net incurred losses and LAE:
Current period	578,892			341,628			415,829
Prior periods	94,491			(26,822		)	(14,236		)
Total net incurred losses and LAE	673,383			314,806			401,593
Net paid losses:
Current period	(150,778		)	(54,867		)	(52,128		)
Prior periods	(326,352		)	(252,926		)	(199,125		)
Total net paid losses	(477,130		)	(307,793		)	(251,253		)
Effect of exchange rate movement	(9,481		)	15,169			(15,984		)
Acquired on purchase of subsidiaries	192,981			—			—
Assumed business	10,268			31,393			—
Ceded business	—			—			(66,100		)
Net balance as at December 31	1,145,747			755,726			702,151
Plus: reinsurance reserves recoverable	462,950			452,017			357,231
Balance as at December 31	$	1,608,697		$	1,207,743		$	1,059,382

Net incurred losses and LAE in the StarStone segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period		Total
Net losses paid	$	326,352		$	150,778	$	477,130		$	252,926		$	54,867	$	307,793		$	199,125		$	52,128	$	251,253
Net change in case and LAE reserves	(81,491		)	157,378		75,887			(63,785		)	95,470		31,685			(51,309		)	124,358		73,049
Net change in IBNR reserves	(144,212		)	258,091		113,879			(208,244		)	184,704		(23,540		)	(156,546		)	232,189		75,643
Increase (reduction) in estimates of net ultimate losses	100,649			566,247		666,896			(19,103		)	335,041		315,938			(8,730		)	408,675		399,945
Increase (reduction) in provisions for unallocated LAE	(5,892		)	12,645		6,753			(6,774		)	6,587		(187		)	(3,611		)	7,154		3,543
Amortization of fair value adjustments	(266		)	—		(266		)	(945		)	—		(945		)	(1,895		)	—		(1,895		)
Net incurred losses and LAE	$	94,491		$	578,892	$	673,383		$	(26,822	)	$	341,628	$	314,806		$	(14,236	)	$	415,829	$	401,593

The following tables provide a breakdown of the gross and net losses and LAE reserves by line of business and the fair value adjustments resulting from business acquisitions and ULAE as of December 31, 2018 and 2017:



	2018
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Casualty	$	177,432	$	331,432	$	508,864		$	137,828	$	282,026	$	419,854
Marine	185,084		182,453		367,537			163,889		133,426		297,315
Property	317,102		123,511		440,613			151,774		65,522		217,296
Aerospace	67,203		40,416		107,619			45,879		36,167		82,046
Workers' Compensation	49,373		110,082		159,455			33,759		68,969		102,728
Total	$	796,194	$	787,894	$	1,584,088		$	533,129	$	586,110	$	1,119,239
Fair value adjustments					(467		)					1,432
ULAE					25,076							25,076
Total					$	1,608,697						$	1,145,747



	2017
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Casualty	$	139,200	$	282,789	$	421,989		$	98,070	$	188,518	$	286,588
Marine	130,962		118,375		249,337			94,115		69,828		163,943
Property	208,777		89,963		298,740			115,148		39,280		154,428
Aerospace	63,920		26,070		89,990			40,781		17,055		57,836
Workers' Compensation	48,118		82,024		130,142			31,213		41,920		73,133
Total	$	590,977	$	599,221	$	1,190,198		$	379,327	$	356,601	$	735,928
Fair value adjustments					(555		)					1,698
ULAE					18,100							18,100
Total					$	1,207,743						$	755,726

The following tables set forth information about incurred and paid loss development, total IBNR reserves and cumulative loss frequency related to all the individual lines of business within the StarStone segment as at December 31, 2018. The information related to incurred and paid loss development for the years ended December 31, 2014 through 2017 is presented as supplementary information and is therefore unaudited. The information within the tables below is presented on a prospective basis from the date of our acquisition of StarStone on April 1, 2014 since providing pre-acquisition incurred and paid losses by accident year for years prior to 2014 was determined to be impracticable due to significant data limitations.Casualty



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (Unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	60,044	$	60,046	$	60,119	$	60,041	$	60,077	$	—	2,080
2009	20,026		20,085		20,085		20,089		20,261		3		463
2010	16,173		17,320		17,406		18,085		18,103		171		728
2011	20,969		25,275		25,633		24,861		25,301		816		2,034
2012	56,901		48,179		43,901		40,082		39,468		978		3,121
2013	72,918		66,628		77,630		76,072		78,777		6,811		4,974
2014	91,491		92,600		92,857		90,459		90,685		12,504		5,694
2015			104,603		111,262		110,453		123,529		27,687		4,698
2016					125,456		129,264		140,765		41,362		4,363
2017							137,600		162,707		72,210		4,613
2018									159,331		119,484		2,982
							Total		$	919,004	$	282,026	35,750
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (Unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	60,044	$	60,046	$	60,119	$	60,041	$	60,077
2009	20,026		20,085		20,085		20,089		20,261
2010	15,113		17,320		17,406		18,085		18,103
2011	15,605		20,945		23,612		24,176		24,806
2012	18,348		29,436		32,625		33,873		36,082
2013	23,056		30,400		50,018		54,570		60,273
2014	5,737		21,884		37,575		50,740		64,658
2015			8,121		27,389		49,136		68,363
2016					4,659		42,999		75,019
2017							9,992		50,704
2018									20,804
							Total		$	499,150
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	419,854

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	419,854
Reinsurance recoverable on unpaid losses	89,010
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	508,864

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Casualty	7.1	%	21.4	%	16.7	%	20.8	%	12.6	%	8.3	%	1.7	%	1.6	%	—	%	0.5	%

Marine



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	16,526	$	16,557	$	16,600	$	16,620	$	16,644	$	—	1,361
2009	10,420		10,321		10,294		10,307		10,308		—		629
2010	22,356		19,282		19,123		19,185		19,054		265		1,026
2011	29,616		27,854		27,430		27,469		27,809		392		1,953
2012	48,187		51,686		51,341		50,073		50,877		421		2,414
2013	62,952		55,068		52,846		53,780		57,059		99		2,210
2014	50,259		53,650		48,624		55,074		50,713		601		3,931
2015			71,122		70,134		79,611		81,159		2,640		5,605
2016					82,859		83,670		87,791		14,330		6,679
2017							131,200		159,664		50,006		7,799
2018									168,750		64,672		6,302
							Total		$	729,829	$	133,426	39,909
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	16,518	$	16,557	$	16,600	$	16,620	$	16,644
2009	10,298		10,309		10,291		10,298		10,308
2010	16,307		18,337		18,415		18,386		18,450
2011	24,366		25,419		26,392		26,639		26,748
2012	38,547		42,684		44,509		45,294		45,742
2013	29,186		38,324		42,405		44,863		46,921
2014	10,930		24,933		32,463		36,908		42,560
2015			10,883		30,685		50,222		56,305
2016					12,200		42,041		57,764
2017							25,417		69,437
2018									41,635
							Total		$	432,514
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	297,315

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	297,315
Reinsurance recoverable on unpaid losses	70,222
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	367,537

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Marine	17.9	%	28.4	%	18.2	%	7.9	%	5.7	%	4.8	%	0.5	%	0.1	%	0.2	%	0.1	%

Property



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	84,812	$	84,652	$	84,265	$	84,500	$	82,172	$	—	1,835
2009	28,360		27,824		28,297		28,550		31,831		—		1,060
2010	74,412		72,959		71,600		71,661		71,679		—		1,561
2011	90,707		89,271		89,305		88,991		88,919		—		1,612
2012	65,516		61,422		60,420		61,350		58,443		—		1,495
2013	77,944		64,848		64,509		63,673		61,930		—		1,956
2014	58,855		43,619		42,917		43,308		41,258		846		2,077
2015			78,721		76,362		70,132		70,018		2,064		5,580
2016					87,266		94,995		94,530		4,690		6,710
2017							155,053		171,510		19,966		7,766
2018									164,155		37,956		4,383
							Total		$	936,445	$	65,522	36,035
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	84,362	$	84,594	$	84,265	$	84,278	$	80,906
2009	27,693		27,731		28,088		28,325		31,607
2010	68,605		71,491		71,600		71,661		71,679
2011	86,986		88,197		88,697		88,944		88,919
2012	47,879		51,935		54,072		55,027		55,222
2013	30,763		46,146		50,932		52,982		59,070
2014	5,470		18,727		31,426		34,347		35,868
2015			10,410		28,582		55,204		63,718
2016					26,741		57,761		74,938
2017							37,369		98,107
2018									59,115
							Total		$	719,149
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	217,296

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	217,296
Reinsurance recoverable on unpaid losses	223,317
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	440,613

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Property	22.8	%	31.6	%	28.0	%	8.5	%	3.0	%	4.0	%	0.2	%	0.2	%	0.3	%	0.2	%

Aerospace



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	—	$	—	$	—	$	—	$	—	$	—	—
2009	—		—		—		—		—		—		—
2010	18,516		18,144		18,454		18,956		19,032		78		572
2011	58,771		57,244		57,668		58,102		59,637		215		2,188
2012	55,720		55,418		56,261		56,214		57,506		356		2,410
2013	72,065		70,148		70,475		74,847		77,341		801		2,549
2014	65,227		53,549		53,563		52,342		54,412		1,149		2,830
2015			66,347		69,500		72,503		73,175		1,874		2,922
2016					37,728		44,912		48,093		6,853		2,783
2017							31,257		35,050		1,585		2,809
2018									59,448		23,256		1,682
							Total		$	483,694	$	36,167	20,745
⁽¹⁾ Total of IBNR plus expected development on reported losses
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	—	$	—	$	—	$	—	$	—
2009	—		—		—		—		—
2010	15,471		16,615		17,218		18,274		18,558
2011	53,812		55,170		55,850		56,427		57,020
2012	45,950		49,381		52,191		53,668		54,859
2013	50,856		59,845		63,417		68,735		72,721
2014	17,307		31,165		38,439		40,686		43,805
2015			32,375		52,180		60,813		63,986
2016					11,803		31,798		36,963
2017							10,389		28,200
2018									25,536
							Total		$	401,648
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	82,046

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	82,046
Reinsurance recoverable on unpaid losses	25,573
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	107,619

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Aerospace	34.6	%	31.4	%	11.9	%	4.8	%	4.9	%	3.7	%	2.1	%	3.3	%	1.5	%	—	%

Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	—	$	—	$	—	$	—	$	—	$	—	—
2009	—		—		—		—		—		—		—
2010	—		—		—		—		—		—		—
2011	—		—		—		—		—		—		—
2012	—		—		—		—		—		—		—
2013	—		—		—		—		—		—		—
2014	15,607		17,199		18,290		15,662		15,202		1,755		1,062
2015			54,977		55,505		50,103		47,338		6,620		2,518
2016					62,942		54,121		54,793		12,404		2,489
2017							43,366		39,089		17,876		2,079
2018									44,615		30,314		2,303
							Total		$	201,037	$	68,969	10,451
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	—	$	—	$	—	$	—	$	—
2009	—		—		—		—		—
2010	—		—		—		—		—
2011	—		—		—		—		—
2012	—		—		—		—		—
2013	—		—		—		—		—
2014	1,491		6,079		9,279		11,431		12,242
2015			6,361		20,194		30,439		35,311
2016					7,953		23,428		32,739
2017							5,477		13,509
2018									4,508
							Total		$	98,309
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	102,728

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	102,728
Reinsurance recoverable on unpaid losses	56,727
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	159,455

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Workers' compensation	12.4	%	27.0	%	19.9	%	12.2	%	5.3	%	—	%	—	%	—	%	—	%	—	%

12. POLICY BENEFITS FOR LIFE CONTRACTS

We have acquired long duration contracts that subject us to mortality, longevity and morbidity risks and which are accounted for as life and annuity premiums earned. Life benefit reserves are established using assumptions for investment yields, mortality, morbidity, lapse and expenses, including a provision for adverse deviation. We establish and review our life reserves regularly based upon cash flow projections. We establish and maintain our life reinsurance reserves at a level that we estimate will, when taken together with future premium payments and investment income expected to be earned on associated premiums, be sufficient to support all future cash flow benefit obligations and third-party servicing obligations as they become payable. Refer to Note 2 - "Significant Accounting Policies" - (d) Policy Benefits for Life and Annuity Contracts" for a description of the assumptions used and the process for establishing our assumptions and estimates. Policy benefits for life contracts as at December 31, 2018 and 2017 were $105.1 million and $117.2 million, respectively.

On October 10, 2018, we entered into a Business Transfer Agreement between our wholly-owned subsidiary Alpha and a subsidiary of Monument. This agreement will transfer our remaining life assurance policies written by Alpha to Monument, via a Portfolio Transfer, subject to regulatory approval. The transaction is expected to close during 2019. Our life and annuities operations do not qualify for inclusion in our reportable segments and are therefore included within other activities. The related assets, as well as the results from these operations, were not significant to our consolidated operations and therefore they have not been classified as a discontinued operation. In addition, our proposed transfer of these life assurance polices to Monument was not classified as a held-for-sale business transaction since the underlying contracts do not meet the definition of a business. We have an investment in Monument, as described further in Note 21 - "Related Party Transactions".

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTSFair Value Hierarchy

Fair value is defined as the price at which to sell an asset or transfer a liability (i.e. the "exit price") in an orderly transaction between market participants. We use a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. The hierarchy is broken down into three levels as follows:


•	Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.


•	Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.


•	Level 3 - Valuations based on unobservable inputs where there is little or no market activity. Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine the fair values.

In addition, certain of our other investments are measured at fair value using net asset value ("NAV") per share (or its equivalent) as a practical expedient and have not been classified within the fair value hierarchy above. We have categorized our assets and liabilities that are recorded at fair value on a recurring basis among levels based on the observability of inputs, or at fair value using NAV per share (or its equivalent) as follows:



	December 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value Based on NAV as Practical Expedient		Total Fair Value
Investments:
Fixed maturity investments:
U.S. government and agency	$	—	$	510,245	$	—	$	—	$	510,245
U.K. government	—		300,631		—		—		300,631
Other government	—		793,810		—		—		793,810
Corporate	—		4,802,454		37,386		—		4,839,840
Municipal	—		130,265		—		—		130,265
Residential mortgage-backed	—		773,557		—		—		773,557
Commercial mortgage-backed	—		705,674		7,389		—		713,063
Asset-backed	—		627,360		9,121		—		636,481
	$	—	$	8,643,996	$	53,896	$	—	$	8,697,892

Other assets included within funds held - directly managed	—		14,780		—		—		14,780

Equities:
Publicly traded equity investments	$	102,102	$	36,313	$	—	$	—	$	138,415
Privately held equity investments	—		—		228,710		—		228,710
	$	102,102	$	36,313	$	228,710	$	—	$	367,125

Other investments:
Hedge funds	$	—	$	—	$	—	$	852,584	$	852,584
Fixed income funds	—		290,864		—		112,994		403,858
Equity funds	—		100,440		—		233,241		333,681
Private equity funds	—		—		—		248,628		248,628
CLO equities	—		—		39,052		—		39,052
CLO equity fund	—		—		—		37,260		37,260
Private credit funds	—		—		—		33,381		33,381
Others	—		578		315		8,420		9,313
	$	—	$	391,882	$	39,367	$	1,526,508	$	1,957,757
Total Investments	$	102,102	$	9,086,971	$	321,973	$	1,526,508	$	11,037,554

Cash and cash equivalents	$	243,839	$	21,146	$	—	$	—	$	264,985

Reinsurance balances recoverable on paid and unpaid losses:	$	—	$	—	$	739,591	$	—	$	739,591

Other Assets:
Derivative Instruments	$	—	$	6,701	$	—	$	—	$	6,701
	$	—	$	6,701	$	—	$	—	$	6,701

Losses and LAE:	$	—	$	—	$	2,874,055	$	—	$	2,874,055

Other Liabilities:
Derivative Instruments	$	—	$	983	$	—	$	—	$	983
	$	—	$	983	$	—	$	—	$	983



	December 31, 2017
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value Based on NAV as Practical Expedient		Total Fair Value
Investments:
Fixed maturity investments:
U.S. government and agency	$	—	$	628,073	$	—	$	—	$	628,073
U.K government	—		310,885		—		—		310,885
Other government	—		384,610		—		—		384,610
Corporate	—		4,106,493		67,178		—		4,173,671
Municipal	—		164,287		—		—		164,287
Residential mortgage-backed	—		315,103		3,080		—		318,183
Commercial mortgage-backed	—		611,240		21,494		—		632,734
Asset-backed	—		611,620		27,892		—		639,512
	$	—	$	7,132,311	$	119,644	$	—	$	7,251,955

Other assets included within funds held - directly managed	$	—	$	14,554	$	—	$	—	$	14,554

Equities:
Publicly traded equity investments	$	103,652	$	2,951	$	—	$	—	$	106,603
Privately held equity investments	—				—		—		—
	$	103,652	$	2,951	$	—	$	—	$	106,603

Other investments:
Private equities and private equity funds	$	—	$	—	$	—	$	289,556	$	289,556
Equity funds	—		121,046		—		128,429		249,475
Fixed income funds	—		202,570		—		27,429		229,999
Hedge funds	—		—		—		63,773		63,773
CLO equities	—		—		56,765		—		56,765
CLO equity funds	—		—		—		12,840		12,840
Private credit funds	—		—		—		10,156		10,156
Other	—		—		314		514		828
	$	—	$	323,616	$	57,079	$	532,697	$	913,392
Total Investments	$	103,652	$	7,473,432	$	176,723	$	532,697	$	8,286,504

Cash and cash equivalents	$	107,156	$	48,051	$	—	$	—	$	155,207

Reinsurance recoverable:	$	—	$	—	$	542,224	$	—	$	542,224

Other Assets:
Derivative Instruments	$	—	$	319	$	—	$	—	$	319
	$	—	$	319	$	—	$	—	$	319

Losses and LAE:	$	—	$	—	$	1,794,669	$	—	$	1,794,669

Other Liabilities:
Derivative Instruments	$	—	$	7,246	$	—	$	—	$	7,246
	$	—	$	7,246	$	—	$	—	$	7,246

Valuation Methodologies of Financial Instruments Measured at Fair ValueFixed Maturity Investments

The fair values for all securities in the fixed maturity investments and funds held - directly managed portfolios are independently provided by the investment accounting service providers, investment managers and investment custodians, each of which utilize internationally recognized independent pricing services. We record the unadjusted price provided by the investment accounting service providers, investment managers or investment custodians and validate this price through a process that includes, but is not limited to: (i) comparison of prices against alternative pricing sources; (ii) quantitative analysis (e.g. comparing the quarterly return for each managed portfolio to its target benchmark); (iii) evaluation of methodologies used by external parties to estimate fair value, including a review of the inputs used for pricing; and (iv) comparing the price to our knowledge of the current investment market. Our internal price validation procedures and review of fair value methodology documentation provided by independent pricing services have not historically resulted in adjustment in the prices obtained from the pricing service.

The independent pricing services used by the investment accounting service providers, investment managers and investment custodians obtain actual transaction prices for securities that have quoted prices in active markets. Where we utilize single unadjusted broker-dealer quotes, they are generally provided by market makers or broker-dealers who are recognized as market participants in the markets for which they are providing the quotes. For determining the fair value of securities that are not actively traded, in general, pricing services use "matrix pricing" in which the independent pricing service uses observable market inputs including, but not limited to, reported trades, benchmark yields, broker-dealer quotes, interest rates, prepayment speeds, default rates and other such inputs as are available from market sources to determine a reasonable fair value. In addition, pricing services use valuation models, using observable data, such as an Option Adjusted Spread model, to develop prepayment and interest rate scenarios. The Option Adjusted Spread model is commonly used to estimate fair value for securities such as mortgage-backed and asset-backed securities.

The following describes the techniques generally used to determine the fair value of our fixed maturity investments by asset class, including the investments underlying the funds held - directly managed.

•

U.S. government and agency securities consist of securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and other agencies. Non-U.S. government securities consist of bonds issued by non-U.S. governments and agencies along with supranational organizations. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades and broker-dealer quotes. These are considered to be observable market inputs and, therefore, the fair values of these securities are classified as Level 2.

•

Corporate securities consist primarily of investment-grade debt of a wide variety of corporate issuers and industries. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark yields, and industry and market indicators. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2. Where pricing is unavailable from pricing services, such as in periods of low trading activity or when transactions are not orderly, we obtain non-binding quotes from broker-dealers. Where significant inputs are unable to be corroborated with market observable information, we classify the securities as Level 3.


•	Municipal securities consist primarily of bonds issued by U.S.-domiciled state and municipal entities. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes and benchmark yields. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2.

•

Asset-backed securities consist primarily of investment-grade bonds backed by pools of loans with a variety of underlying collateral. Residential and commercial mortgage-backed securities include both agency and non-agency originated securities. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades, benchmark yields, prepayment speeds and default rates. The fair values of these securities are classified as Level 2 if the significant inputs are market observable. Where significant inputs are unable to be corroborated with market observable information, we classify the securities as Level 3.Equities

Our investments in equities consist of a combination of publicly and privately traded investments. Our publicly traded equity investments in common and preferred stocks predominantly trade on the major exchanges and are managed by our external advisors. Our publicly traded equities are widely diversified and there is no significant concentration in any specific industry. We use an internationally recognized pricing service to estimate the fair value of our publicly traded equities. We have categorized the majority of our publicly traded equity investments other than preferred stock as Level 1 investments because the fair values of these investments are based on unadjusted quoted prices in active markets for identical assets. One equity security is trading in an inactive market and, as a result has been classified as Level 2. The fair value estimates of our investments in publicly traded preferred stock are based on observable market data and, as a result, have been categorized as Level 2.

Our privately held equity investments in common and preferred stocks are direct investments in companies that we believe offer attractive risk adjusted returns and/or offer other strategic advantages. Each investment may have its own unique terms and conditions and there may be restrictions on disposals. The market for these investments is illiquid and there is no active market. The Company uses a combination of cost, internal models, reported values from co-investors/managers and observable inputs, such as capital raises and capital transactions between new and existing shareholders to calculate the fair value of the privately held equity investments. The fair value estimates of our investments in privately held equities are based on unobservable market data and, as a result, have been categorized as Level 3. As of December 31, 2018, we have used cost as our estimate of for value for the majority of our privately held equity investments, given that only a short period of time has passed since the investments were made.Other investments, at fair value

We have ongoing due diligence processes with respect to the other investments carried at fair value in which we invest and their managers. These processes are designed to assist us in assessing the quality of information provided by, or on behalf of, each fund and in determining whether such information continues to be reliable or whether further review is warranted. Certain funds do not provide full transparency of their underlying holdings; however, we obtain the audited financial statements for funds annually, and regularly review and discuss the fund performance with the fund managers to corroborate the reasonableness of the reported net asset values ("NAV").

The use of NAV as an estimate of the fair value for investments in certain entities that calculate NAV is a permitted practical expedient. Due to the time lag in the NAV reported by certain fund managers we adjust the valuation for capital calls and distributions. Other investments measured at fair value using NAV as a practical expedient have not been classified in the fair value hierarchy. Other investments for which we do not use NAV as a practical expedient have been valued using prices from independent pricing services, investment managers and broker-dealers.

The following describes the techniques generally used to determine the fair value of our other investments.


•	For our investments in private equity funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•

Our investments in fixed income funds and equity funds are valued based on a combination of prices from independent pricing services, external fund managers or third-party administrators. For the publicly available prices we have classified the investments as Level 2. For the non-publicly available prices we are using NAV as a practical expedient and therefore these have not been categorized within the fair value hierarchy.


•	For our investments in hedge funds, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•

We measure the fair value of our direct investment in CLO equities based on valuations provided by our external CLO equity manager. If the investment does not involve an external CLO equity manager, the fair value of the investment is based on valuations provided by the broker or lead underwriter of the investment (the "broker"). Our CLO equity investments have been classified as Level 3 due to the use of unobservable inputs in the valuation and the limited number of relevant trades in secondary markets.


•	Included within others is our investments in the real estate debt fund which we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair value of this investment is measured using the NAV as a practical expedient and therefore has not been categorized within the fair value hierarchy.

In providing valuations, the CLO equity manager and brokers use observable and unobservable inputs. Of the significant unobservable market inputs used, the default and loss severity rates involve the most judgment and create the most sensitivity. A significant increase or decrease in either of these significant inputs in isolation would result in lower or higher fair value estimates for direct investments in CLO equities and, in general, a change in default rate assumptions will be accompanied by a directionally similar change in loss severity rate assumptions. Collateral spreads and estimated maturity dates are less subjective inputs because they are based on the historical average of actual spreads and the weighted-average life of the current underlying portfolios, respectively. A significant increase or decrease in either of these significant inputs in isolation would result in higher or lower fair value estimates for direct investments in CLO equities. In general, these inputs have no significant interrelationship with each other or with default and loss severity rates.

On a quarterly basis, we receive the valuation from the external CLO manager and brokers and then review the underlying cash flows and key assumptions used by them. We review and update the significant unobservable inputs based on information obtained from secondary markets. These inputs are our responsibility and we assess the reasonableness of the inputs (and if necessary, update the inputs) through communicating with industry participants, monitoring of the transactions in which we participate (for example, to evaluate default and loss severity rate trends), and reviewing market conditions, historical results, and emerging trends that may impact future cash flows.

If valuations from the external CLO equity manager or brokers are not available, we use an income approach based on certain observable and unobservable inputs to value these investments. An income approach is also used to corroborate the reasonableness of the valuations provided by the external manager and brokers. Where an income approach is followed, the valuation is based on available trade information, such as expected cash flows and market assumptions on default and loss severity rates. Other inputs used in the valuation process include asset spreads, loan prepayment speeds, collateral spreads and estimated maturity dates.


•	For our investments in the CLO equity fund, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third party administrator. The fair value of this investment is measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•

For our investments in private credit funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.Insurance Contracts - Fair Value OptionThe Company uses an internal model to calculate the fair value of the liability for losses and loss adjustment expenses and reinsurance balances recoverable on paid and unpaid losses assets for certain retroactive reinsurance contracts where we have elected the fair value option in our Non-life Run-off segment. The fair value was calculated as the aggregate of discounted cash flows plus a risk margin. The discounted cash flow approach uses (i) estimated nominal cash flows based upon an appropriate payment pattern developed in accordance with standard actuarial techniques and (ii) a discount rate based upon a high quality rated corporate bond plus a credit spread for non-performance risk. The model uses corporate bond rates across the yield curve depending on the estimated timing of the future cash flows and specific to the currency of the risk. The risk margin was calculated using the present value of the cost of capital. The cost of capital approach uses (i) projected capital requirements, (ii) multiplied by the risk cost of capital representing the return required for non-hedgeable risk based upon the weighted average cost of capital less investment income and (iii) discounted using the weighted average cost of capital.Derivative InstrumentsThe fair values of our foreign currency exchange contracts, as described in Note 7 - "Derivatives and Hedging Instruments" are classified as Level 2. The fair values are based upon prices in active markets for identical contracts.Level 3 Measurements and Changes in LevelingTransfers into or out of levels are recorded at their fair values as of the end of the reporting period, consistent with the date of determination of fair value.Investments

The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs during the years ended December 31, 2018 and 2017:



	2018
	Corporate			Residential mortgage-backed			Commercial mortgage-backed			Asset-backed			Privately-held Equities			Other Investments			Total
Beginning fair value	$	67,178		$	3,080		$	21,494		$	27,892		$	—		$	57,079		$	176,723
Purchases	14,391			—			3,749			46,074			227,000			13,173			304,387
Sales	(65,700		)	(1,184		)	(5,781		)	(49,020		)	—			(12,091		)	(133,776		)
Total realized and unrealized losses	(57		)	(28		)	(645		)	(1,843		)	(2		)	(18,794		)	(21,369		)
Transfer into Level 3 from Level 2	28,339			1,795			4,897			9,890			1,712			—			46,633
Transfer out of Level 3 into Level 2	(6,765		)	(3,663		)	(16,325		)	(23,872		)	—			—			(50,625		)
Ending fair value	$	37,386		$	—		$	7,389		$	9,121		$	228,710		$	39,367		$	321,973



	2017
	Corporate			Residential mortgage-backed			Commercial mortgage-backed			Asset-backed			Privately-held Equities		Other Investments			Total
Beginning fair value	$	74,534		$	—		$	12,213		$	14,692		$	—	$	76,878		$	178,317
Purchases	28,872			711			21,306			9,749			—		435			61,073
Sales	(37,941		)	(37		)	(424		)	(20,795		)	—		(12,350		)	(71,547		)
Total realized and unrealized gains (losses)	249			(16		)	(434		)	205			—		(7,884		)	(7,880		)
Transfer into Level 3 from Level 2	24,431			3,085			18,974			56,074			—		—			102,564
Transfer out of Level 3 into Level 2	(22,967		)	(663		)	(30,141		)	(32,033		)	—		—			(85,804		)
Ending fair value	$	67,178		$	3,080		$	21,494		$	27,892		$	—	$	57,079		$	176,723

Net realized and unrealized gains related to Level 3 assets in the table above are included in net realized and unrealized (losses) gains in our consolidated statements of earnings.

The securities transferred from Level 2 to Level 3 were transferred due to insufficient market observable inputs for the valuation of the specific assets. The transfers from Level 3 to Level 2 were based upon obtaining market observable information regarding the valuations of the specific assets.Insurance Contracts - Fair Value Option

The following table presents a reconciliation of the beginning and ending balances for all insurance contracts measured at fair value on a recurring basis using Level 3 inputs during the years ended December 31, 2018 and 2017:



	2018									2017
	Liability for losses and LAE			Reinsurance balances recoverable on paid and unpaid losses			Net			Liability for losses and LAE			Reinsurance balances recoverable on paid and unpaid losses			Net
Beginning fair value	$	1,794,669		$	542,224		$	1,252,445		$	—		$	—		$	—
Assumed business	1,890,061			372,780			1,517,281			1,966,843			565,824			1,401,019
Incurred losses and LAE:
Reduction in estimates of ultimate losses	(108,429		)	(30,041		)	(78,388		)	(100,494		)	(1,848		)	(98,646		)
Reduction in unallocated LAE	(20,656		)	—			(20,656		)	(22,303		)	—			(22,303		)
Change in fair value	27,845			21,181			6,664			54,007			23,751			30,256
Total incurred losses and LAE	(101,240		)	(8,860		)	(92,380		)	(68,790		)	21,903			(90,693		)
Paid losses	(576,949		)	(148,175		)	(428,774		)	(197,102		)	(56,256		)	(140,846		)
Effect of exchange rate movements	(132,486		)	(18,378		)	(114,108		)	93,718			10,753			82,965
Ending fair value	$	2,874,055		$	739,591		$	2,134,464		$	1,794,669		$	542,224		$	1,252,445

Changes in fair value in the table above are included in net incurred losses and LAE in our consolidated statements of earnings.

The following table presents the components of the net change in fair value for the years ended December 31, 2018 and 2017:



	2018			2017
Changes in fair value due to changes in:
Duration	$	74,011		$	41,332
Corporate bond yield	(71,031		)	(11,076		)
Risk cost of capital	3,684			—
Change in fair value	$	6,664		$	30,256

Below is a summary of the quantitative information regarding the significant observable and unobservable inputs used in the internal model to determine fair value on a recurring basis as at December 31, 2018 and 2017:



		2018	2017
Valuation Technique	Unobservable (U) and Observable (O) Inputs	Weighted Average	Weighted Average
Internal model	Corporate bond yield (O)	A rated	A rated
Internal model	Credit spread for non-performance risk (U)	0.2%	0.2%
Internal model	Risk cost of capital	5.0%	5.0%
Internal model	Weighted average cost of capital (U)	8.5%	8.5%
Internal model	Duration - liability (U)	7.33 years	11.41 years
Internal model	Duration - reinsurance balances recoverable on paid and unpaid losses (U)	7.98 years	11.66 years

The fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses may increase or decrease due to changes in the corporate bond rate, the credit spread for non-performance risk, the risk cost of capital, the weighted average cost of capital and the estimated payment pattern as described below:

•

An increase in the corporate bond rate or credit spread for non-performance risk would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a decrease in the corporate bond rate or credit spread for non-performance risk would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.

•

An increase in the weighted average cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a decrease in the weighted average cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.


•	An increase in the risk cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a decrease in the risk cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.

•

The duration of the liability and recoverable is adjusted every period to reflect actual net payments during the period and expected future payments. An acceleration of the estimated payment pattern, a decrease in duration, would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a deceleration of the estimated payment pattern, an increase in duration, would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.

In addition, the estimate of the capital required to support the liabilities is based upon current industry standards for capital adequacy. If the required capital per unit of risk increases, then the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses would increase. Conversely, a decrease in required capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.Disclosure of Fair Values for Financial Instruments Carried at Cost

Life Settlement Contracts

During 2018, we sold our investments in life settlement contracts, which were carried at cost. As of December 31, 2017, investments in life settlement contracts were carried at cost of $125.6 million and their fair values were $131.9 million.

Senior Notes

As of December 31, 2018, our 4.5% Senior Notes due 2022 had a carrying value of $348.1 million, while the fair value based on observable market pricing from a third party service was $352.2 million. The fair value is classified as Level 2.

Insurance Contracts

Disclosure of fair value of amounts relating to insurance contracts is not required, except those for which we elected the fair value option, as described above.

Remaining Assets and Liabilities

Our remaining assets and liabilities were generally carried at cost or amortized cost, which due to their short-term nature approximates fair value as of December 31, 2018 and 2017.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Policy Benefits for Life Contracts

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

Policy Benefits for Life Contracts



	2018
	Non-life Run-off			Atrium		StarStone			Other		Total
Outstanding losses	$	4,271,769		$	94,885	$	796,194		$	6,052	$	5,168,900
IBNR	3,527,767			140,521		787,894			12,809		4,468,991
Fair value adjustments	(217,527		)	3,476		(467		)	—		(214,518		)
Fair value adjustments - fair value option	(374,752		)	—		—			—		(374,752		)
ULAE	333,405			2,402		25,076			—		360,883
Total	$	7,540,662		$	241,284	$	1,608,697		$	18,861	$	9,409,504

Reconciliation to Consolidated Balance Sheet:
Losses and loss adjustment expenses	$	4,666,607		$	241,284	$	1,608,697		$	18,861	$	6,535,449
Losses and loss adjustment expenses, at fair value	2,874,055			—		—			—		2,874,055
Total	$	7,540,662		$	241,284	$	1,608,697		$	18,861	$	9,409,504



	2017
	Non-life Run-off			Atrium		StarStone			Other		Total
Outstanding losses	$	3,185,703		$	78,363	$	590,977		$	—	$	3,855,043
IBNR	2,903,927			150,508		599,221			—		3,653,656
Fair value adjustments	(125,998		)	9,547		(555		)	—		(117,006		)
Fair value adjustments - fair value option	(314,748		)	—		—			—		(314,748		)
ULAE	300,588			2,455		18,100			—		321,143
Total	$	5,949,472		$	240,873	$	1,207,743		$	—	$	7,398,088

Reconciliation to Consolidated Balance Sheet:
Losses and loss adjustment expenses	$	4,154,803		$	240,873	$	1,207,743		$	—	$	5,603,419
Losses and loss adjustment expenses, at fair value	1,794,669			—		—			—		1,794,669
Total	$	5,949,472		$	240,873	$	1,207,743		$	—	$	7,398,088



	2018			2017			2016
Balance as at January 1	$	7,398,088		$	5,987,867		$	5,720,149
Less: reinsurance reserves recoverable	1,870,033			1,388,193			1,360,382
Less: deferred charge assets on retroactive reinsurance	80,192			94,551			255,911
Net balance as at January 1	5,447,863			4,505,123			4,103,856
Net incurred losses and LAE:
Current period	689,782			437,853			493,016
Prior periods	(235,757		)	(244,302		)	(318,917		)
Total net incurred losses and LAE	454,025			193,551			174,099
Net paid losses:
Current period	(189,560		)	(82,273		)	(79,579		)
Prior periods	(1,194,985		)	(862,921		)	(753,478		)
Total net paid losses	(1,384,545		)	(945,194		)	(833,057		)
Effect of exchange rate movement	(145,243		)	158,429			(46,903		)
Acquired on purchase of subsidiaries	1,310,874			10,251			10,019
Assumed business	1,772,104			1,525,703			1,340,444
Ceded business	—			—			(243,335		)
Net balance as at December 31	7,455,078			5,447,863			4,505,123
Plus: reinsurance reserves recoverable	1,867,841			1,870,033			1,388,193
Plus: deferred charge assets on retroactive reinsurance	86,585			80,192			94,551
Balance as at December 31	$	9,409,504		$	7,398,088		$	5,987,867

The tables below provide the components of net incurred losses and LAE by segment and for our other activities for the years ended December 31, 2018, 2017 and 2016:



	2018
	Non-life Run-off			Atrium			StarStone			Other		Total
Net losses paid	$	838,817		$	64,506		$	477,130		$	4,092	$	1,384,545
Net change in case and LAE reserves	(547,420		)	6,331			75,887			4,808		(460,394		)
Net change in IBNR reserves	(565,385		)	4,091			113,879			7,999		(439,416		)
Increase (reduction) in estimates of net ultimate losses	(273,988		)	74,928			666,896			16,899		484,735
Increase (reduction) in provisions for unallocated LAE	(65,401		)	—			6,753			—		(58,648		)
Amortization of deferred charge assets	13,781			—			—			—		13,781
Amortization of fair value adjustments	12,877			(5,118		)	(266		)	—		7,493
Changes in fair value - fair value option	6,664			—			—			—		6,664
Net incurred losses and LAE	$	(306,067	)	$	69,810		$	673,383		$	16,899	$	454,025



	2017
	Non-life Run-off			Atrium			StarStone			Total
Net losses paid	$	581,723		$	55,678		$	307,793		$	945,194
Net change in case and LAE reserves	(381,053		)	8,338			31,685			(341,030		)
Net change in IBNR reserves	(390,727		)	7,679			(23,540		)	(406,588		)
Increase (reduction) in estimates of net ultimate losses	(190,057		)	71,695			315,938			197,576
Increase (reduction) in provisions for bad debt	(1,536		)	159			—			(1,377		)
Increase (reduction) in provisions for unallocated LAE	(53,810		)	285			(187		)	(53,712		)
Amortization of deferred charge assets	14,359			—			—			14,359
Amortization of fair value adjustments	10,114			(2,720		)	(945		)	6,449
Changes in fair value - fair value option	30,256			—			—			30,256
Net incurred losses and LAE	$	(190,674	)	$	69,419		$	314,806		$	193,551



	2016
	Non-life Run-off			Atrium			StarStone			Total
Net losses paid	$	533,806		$	47,998		$	251,253		$	833,057
Net change in case and LAE reserves	(608,785		)	(148		)	73,049			(535,884		)
Net change in IBNR reserves	(347,384		)	13,700			75,643			(258,041		)
Increase (reduction) in estimates of net ultimate losses	(422,363		)	61,550			399,945			39,132
Reduction in provisions for bad debt	(13,822		)	—			—			(13,822		)
Increase (reduction) in provisions for unallocated LAE	(43,955		)	145			3,543			(40,267		)
Amortization of deferred charge assets	168,827			—			—			168,827
Amortization of fair value adjustments	25,432			(3,308		)	(1,895		)	20,229
Changes in fair value - fair value option	—			—			—			—
Net incurred losses and LAE	$	(285,881	)	$	58,387		$	401,593		$	174,099

Loss Development InformationMethodology for Establishing Reserves

The loss development tables disclosed below are presented as follows:


•	Non-Life Run-off - Presented by acquisition year, if significant, and further disaggregated, if significant, by line of business within that acquisition year. The lines of business disclosed include Asbestos, Environmental, General Casualty, Workers’ Compensation, Professional Indemnity/Directors & Officers, Motor and Property.


•	StarStone - All the lines of business related to the StarStone segment have been included within the loss development disclosures below, namely, Casualty, Marine, Property, Aerospace and Workers’ Compensation.


•	Atrium - The loss development disclosures for our Atrium segment have not been disaggregated further by line of business as the segment comprised approximately only 3% of our total consolidated liability for losses and LAE as at December 31, 2018 and was, therefore, not considered material for further disaggregation.

For each acquisition year and/or line of business for which loss development tables have been provided below, the disclosure approach and format adopted reflects the following:


•	The incurred loss development tables include both reported case reserves and IBNR liabilities, as well as cumulative paid losses;


•	Both the incurred and cumulative paid loss development tables include allocated LAE (i.e. claims handling costs allocated to specific individual claims) but exclude unallocated LAE (i.e. the costs associated with internal claims staff and third party administrators as well as consultants that cannot be allocated to specific individual claims);


•	The fair value adjustments related to business acquisitions are excluded from the loss development tables, however the undiscounted incurred losses, cumulative paid losses and allocated LAE related to business acquisitions are included in the loss development tables;


•	The fair value adjustments related to retroactive reinsurance agreements for which we have elected the fair value option are excluded from the loss development tables, however the undiscounted incurred losses, cumulative paid losses and allocated LAE related to retroactive reinsurance agreements for which we have elected the fair value option are included in the loss development tables;


•	The amounts relating to the amortization of deferred charge assets are excluded from the loss development tables;


•	The amounts relating to the increase (reduction) in provisions for unallocated LAE are excluded from the loss development tables;


•	The amounts included within the loss development tables for the years ended December 31, 2009 through to December 31, 2017 (April 1, 2014 through to December 31, 2017 in the case of StarStone since its date of acquisition), as well as the historical average annual percentage payout ratios as of December 31, 2018, are presented as supplementary information and are therefore unaudited;


•	All data presented within the loss development tables is net of reinsurance recoveries, excluding provisions for uncollectible reinsurance recoverables;


•	The IBNR reserves included within each incurred loss development table by accident year, reflect the net IBNR recorded as of December 31, 2018, including expected development on reported losses;

•


•	For the StarStone segment loss development tables, all information has been presented on a prospective basis from the date of our acquisition of StarStone, which was effective on April 1, 2014. Providing pre-acquisition incurred and paid losses by accident year for years prior to 2014 was determined to be impracticable due to significant data limitations; and


•	For the Atrium segment loss development tables, all information has been presented on a retrospective basis.

•

Our reported claim frequency information is subject to the following inherent limitations when analyzing our loss experience and severity:

•


•	Reported claim counts have not been adjusted for ceded reinsurance, which may distort any measures of frequency or severity;


•	For lines of business that have a mix of primary and excess layer exposures, such as our general casualty and workers’ compensation lines of business, the reported claim counts may fluctuate from period to period between exposure layers, thereby distorting any measure of frequency and severity; and

•

The table below provides a reconciliation of the beginning and ending reserves for losses and LAE for the years ended December 31, 2018, 2017 and 2016 for the Non-life Run-off segment:



	2018			2017			2016
Balance as at January 1	$	5,949,472		$	4,716,363		$	4,585,454
Less: reinsurance reserves recoverable	1,377,485			1,000,953			1,034,747
Less: deferred charge assets on retroactive reinsurance	80,192			94,551			255,911
Net balance as at January 1	4,491,795			3,620,859			3,294,796
Net incurred losses and LAE:
Current period	12,451			5,866			5,829
Prior periods	(318,518		)	(196,540		)	(291,710		)
Total net incurred losses and LAE	(306,067		)	(190,674		)	(285,881		)
Net paid losses:
Current period	(5		)	(2,835		)	(3,869		)
Prior periods	(838,812		)	(578,888		)	(529,937		)
Total net paid losses	(838,817		)	(581,723		)	(533,806		)
Effect of exchange rate movement	(132,632		)	138,772			(27,478		)
Acquired on purchase of subsidiaries	1,111,839			10,251			10,019
Assumed business	1,761,836			1,494,310			1,340,444
Ceded business	—			—			(177,235		)
Net balance as at December 31	6,087,954			4,491,795			3,620,859
Plus: reinsurance reserves recoverable	1,366,123			1,377,485			1,000,953
Plus: deferred charge assets on retroactive reinsurance	86,585			80,192			94,551
Balance as at December 31	$	7,540,662		$	5,949,472		$	4,716,363

Net incurred losses and LAE in the Non-life Run-off segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period			Total
Net losses paid	$	838,812		$	5	$	838,817		$	578,888		$	2,835	$	581,723		$	529,937		$	3,869		$	533,806
Net change in case and LAE reserves	(552,124		)	4,704		(547,420		)	(381,450		)	397		(381,053		)	(608,168		)	(617		)	(608,785		)
Net change in IBNR reserves	(573,127		)	7,742		(565,385		)	(393,100		)	2,373		(390,727		)	(349,726		)	2,342			(347,384		)
Increase (reduction) in estimates of net ultimate losses	(286,439		)	12,451		(273,988		)	(195,662		)	5,605		(190,057		)	(427,957		)	5,594			(422,363		)
Reduction in provisions for bad debt	—			—		—			(1,536		)			(1,536		)	(13,822		)	—			(13,822		)
Increase (reduction) in provisions for unallocated LAE	(65,401		)	—		(65,401		)	(54,071		)	261		(53,810		)	(44,190		)	235			(43,955		)
Amortization of deferred charge assets	13,781			—		13,781			14,359			—		14,359			168,827			—			168,827
Amortization of fair value adjustments	12,877			—		12,877			10,114			—		10,114			25,432			—			25,432
Changes in fair value - fair value option	6,664			—		6,664			30,256			—		30,256			—			—			—
Net incurred losses and LAE	$	(318,518	)	$	12,451	$	(306,067	)	$	(196,540	)	$	5,866	$	(190,674	)	$	(291,710	)	$	5,829		$	(285,881	)



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	108,248	$	(21,535	)	$	(151,662	)	$	(64,949	)
Environmental	21,273		479			(7,599		)	14,153
General Casualty	141,624		(115,240		)	(60,828		)	(34,444		)
Workers' Compensation	139,226		(178,138		)	(115,648		)	(154,560		)
Marine, aviation and transit	67,831		(44,200		)	(21,188		)	2,443
Construction defect	22,182		(7,257		)	(33,146		)	(18,221		)
Professional indemnity/ Directors & Officers	161,797		(11,159		)	(130,957		)	19,681
Motor	104,182		(109,962		)	(34,215		)	(39,995		)
Property	22,178		(24,271		)	(11,497		)	(13,590		)
All Other	50,271		(40,841		)	(6,387		)	3,043
Total	$	838,812	$	(552,124	)	$	(573,127	)	$	(286,439	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

Asbestos

Other

The reduction of $65.4 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	105,731	$	(1,865	)	$	(76,837	)	$	27,029
Environmental	26,542		(9,438		)	(7,748		)	9,356
General Casualty	94,526		(54,292		)	(49,025		)	(8,791		)
Workers' Compensation	187,712		(190,924		)	(151,797		)	(155,009		)
Marine, aviation and transit	18,272		(9,322		)	(11,517		)	(2,567		)
Construction defect	33,802		(24,023		)	(42,804		)	(33,025		)
Professional indemnity/ Directors & Officers	33,402		(19,054		)	(24,559		)	(10,211		)
Motor	24,391		(15,990		)	(8,513		)	(112		)
Property	13,440		(11,196		)	(5,162		)	(2,918		)
All Other	41,070		(45,346		)	(15,138		)	(19,414		)
Total	$	578,888	$	(381,450	)	$	(393,100	)	$	(195,662	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

Construction Defect

Asbestos

Other

The reduction of $54.1 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.



	Net losses paid		Net change in case and LAE reserves			Net change in IBNR reserves			Increase (reduction) in estimates of net ultimate losses
Asbestos	$	33,334	$	544		$	(59,173	)	$	(25,295	)
Environmental	12,233		7,922			(25,738		)	(5,583		)
General Casualty	83,821		(51,885		)	(47,209		)	(15,273		)
Workers' Compensation	255,886		(405,102		)	(173,846		)	(323,062		)
Marine, aviation and transit	15,885		(15,738		)	(7,773		)	(7,626		)
Construction defect	39,915		(19,491		)	(10,014		)	10,410
Professional indemnity/ Directors & Officers	32,397		(45,530		)	616			(12,517		)
Motor	11,788		(24,832		)	(4,103		)	(17,147		)
Property	29,203		(34,543		)	(13,137		)	(18,477		)
All Other	15,475		(19,513		)	(9,349		)	(13,387		)
Total	$	529,937	$	(608,168	)	$	(349,726	)	$	(427,957	)

The significant drivers of the results in the table above are explained below.

Workers' Compensation

Asbestos

Other

The reduction of $44.2 million in provisions for unallocated LAE was due to a reduction in our estimate of the total future costs to administer the claims.



	2018
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Asbestos	$	341,544	$	1,275,476	$	1,617,020		$	321,356	$	1,171,754	$	1,493,110
Environmental	96,665		126,035		222,700			93,095		117,384		210,479
General casualty	500,033		379,484		879,517			416,097		298,612		714,709
Workers' compensation/personal accident	1,454,178		832,615		2,286,793			1,115,116		537,782		1,652,898
Marine, aviation and transit	301,783		72,888		374,671			227,994		78,023		306,017
Construction defect	20,712		99,288		120,000			19,310		94,736		114,046
Professional indemnity/Directors & Officers	603,665		216,839		820,504			426,020		166,898		592,918
Motor	564,307		321,992		886,299			414,847		304,874		719,721
Property	168,267		37,631		205,898			160,873		36,817		197,690
Other	220,615		165,519		386,134			175,289		111,453		286,742
	$	4,271,769	$	3,527,767	$	7,799,536		$	3,369,997	$	2,918,333	$	6,288,330
Fair value adjustments					(217,527		)					(203,183		)
Fair value adjustments - fair value option					(374,752		)					(244,013		)
Deferred charge on retroactive reinsurance					—							(86,585		)
ULAE					333,405							333,405
Total					$	7,540,662						$	6,087,954



	2017
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Asbestos	$	366,446	$	1,434,598	$	1,801,044		$	341,355	$	1,337,467	$	1,678,822
Environmental	95,801		95,259		191,060			91,049		93,345		184,394
General casualty	344,425		266,526		610,951			276,791		194,747		471,538
Workers' compensation/personal accident	1,458,430		748,949		2,207,379			889,265		371,161		1,260,426
Marine, aviation and transit	109,102		56,284		165,386			90,101		51,904		142,005
Construction defect	28,701		135,608		164,309			27,406		122,307		149,713
Professional indemnity/Directors & Officers	214,803		40,265		255,068			181,027		39,591		220,618
Motor	242,213		30,734		272,947			98,866		19,321		118,187
Property	65,445		9,706		75,151			52,236		8,554		60,790
Other	260,337		85,998		346,335			205,322		75,376		280,698
	$	3,185,703	$	2,903,927	$	6,089,630		$	2,253,418	$	2,313,773	$	4,567,191
Fair value adjustments					(125,998		)					(113,028		)
Fair value adjustments - fair value option					(314,748		)					(182,764		)
Deferred charge on retroactive reinsurance					—							(80,192		)
ULAE					300,588							300,588
Total					$	5,949,472						$	4,491,795



	Acquisition Year
	2008 and Prior		2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		Total
Asbestos	$	205,298	$	3,936	$	43,316	$	17	$	653	$	11,860	$	—	$	931	$	440,388	$	709,758	$	50,139	$	1,466,296
Environmental	35,045		1,331		8,847		87		—		—		—		—		97,424		32,007		29,238		203,979
General casualty	69,876		3,759		15,743		29,110		13,715		15,300		35,645		46,730		5,610		99,801		372,058		707,347
Workers' compensation/personal accident	4,444		218		66,030		177,572		2,524		77,629		—		426,225		315,788		80,525		498,872		1,649,827
Marine, aviation and transit	4,127		7,519		4,132		10,739		—		—		13,968		2,126		—		75,303		186,721		304,635
Construction defect	—		—		230		413		—		—		—		55,727		29,569		28,102		—		114,041
Professional indemnity/Directors & Officers	6,778		5,278		5,622		10,040		36,836		—		36,252		—		90,260		—		401,029		592,095
Motor	24,407		1,560		6,097		209		1,290		617		332		20,820		1,050		7,201		653,103		716,686
Property	4,099		1,553		5,108		672		9,352		—		14,268		6,112		—		2,633		151,939		195,736
All Other	19,773		3,560		16,083		1,134		8,291		3,663		16,453		16,044		26,474		135,951		35,709		283,135
Total	$	373,847	$	28,714	$	171,208	$	229,993	$	72,661	$	109,069	$	116,918	$	574,715	$	1,006,563	$	1,171,281	$	2,378,808	$	6,233,777



	2018
	Total Net Reserves per all Acquisition Years		Provision for Bad Debt		Total Net Reserves
Asbestos	$	1,466,296	$	26,814	$	1,493,110
Environmental	203,979		6,500		210,479
General casualty	707,347		7,362		714,709
Workers' compensation/personal accident	1,649,827		3,071		1,652,898
Marine, aviation and transit	304,635		1,382		306,017
Construction defect	114,041		5		114,046
Professional indemnity/Directors & Officers	592,095		823		592,918
Motor	716,686		3,035		719,721
Property	195,736		1,954		197,690
All Other	283,135		3,607		286,742
Total	$	6,233,777	$	54,553	$	6,288,330



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	131,793	$	96,548	$	91,326	$	83,838	$	81,452	$	75,169	$	68,177	$	63,682	$	63,950	$	66,807	$	63,986	$	9,519	35,356
	$	131,793																			$	63,986	$	9,519	35,356

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	685	$	5,630	$	12,385	$	13,836	$	19,409	$	23,324	$	25,377	$	30,210	$	32,498	$	35,272
																					$	35,272
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																					$	28,714

Business Acquired and Contracts Incepting in the Year Ended December 31, 2010



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																					As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,096,347	$	854,415	$	849,383	$	883,938	$	864,842	$	796,083	$	794,240	$	733,381	$	737,257	$	742,236	$	48,175	162,496
	$	1,096,347																	$	742,236	$	48,175	162,496

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	101,867	$	218,628	$	377,473	$	456,666	$	483,460	$	510,815	$	527,521	$	555,686	$	571,028
																			$	571,028
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																			$	171,208

Business Acquired and Contracts Incepting in the Year Ended December 31, 2011



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)			2016 (unaudited)			2017 (unaudited)			2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	584,503	$	619,722	$	584,875	$	489,467	$	422,779	$	369,809		$	314,713		$	269,695		$	256,086		$	41,675	112,695
2009	794		651		605		360		365		362			360			485			484			—		—
2010	285		412		450		140		140		140			139			142			142			—		26
2011	—		102		36		45		54		61			71			79			86			—		19
2012	—				122		11		10		10			10			17			18			—		7
2013	—						23		43		15			15			15			15			—		16
2014	—								1		3			3			3			18			—		14
2015	—										—			(2		)	(2		)	32			5		—
2016	—													2			(139		)	(111		)	11		—
2017	—																—			21			6		2
2018	—																			7			9		1
	$	585,582																		$	256,798		$	41,706	112,780

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)			2016 (unaudited)			2017 (unaudited)			2018
2008 and Prior			$	59,722	$	96,783	$	91,615	$	21,241	$	14,849		$	23,759		$	15,936		$	26,176
2009			164		326		336		357		359			359			484			484
2010			91		115		140		139		140			139			142			142
2011			27		36		46		54		61			71			79			86
2012					6		10		10		10			10			17			17
2013							6		11		15			15			15			15
2014									1		3			3			3			4
2015											(1		)	(2		)	(2		)	2
2016														2			(153		)	(125		)
2017																	—			3
2018																				1
																				$	26,805
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance																				$	229,993

Business Acquired and Contracts Incepting in the Year Ended December 31, 2012



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance																	As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	264,599	$	258,299	$	239,637	$	228,316	$	211,171	$	203,818	$	197,435	$	190,413	$	14,730	39,243
2009	50,431		50,351		58,008		63,730		68,503		66,344		66,507		65,567		4,183		8,402
2010	848		852		2,710		2,602		2,378		2,474		1,404		1,268		97		6
2011	1,388		1,001		989		984		972		971		969		964		—		5
2012	52		61		46		254		257		329		329		156		—		6
2013	—				626		112		334		342		342		127		—		5
2014	—						2,492		2,792		1,423		1,221		1,116		63		7
2015	—								545		1,125		690		690		—		5
2016	—										61		1,196		1,039		193		3
2017	—												71		156		23		4
2018	—														—		—		—
	$	317,318													$	261,496	$	19,289	47,686

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	2,688	$	44,936	$	72,959	$	95,345	$	113,135	$	120,239	$	130,651
2009			124		22,143		34,680		42,632		48,856		51,911		54,517
2010			171		472		631		699		727		764		792
2011			112		463		693		809		866		924		964
2012			28		46		46		48		156		156		156
2013					102		112		127		127		127		127
2014							63		209		429		630		807
2015									105		109		690		690
2016											2		52		91
2017													12		40
2018															—
															$	188,835
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance															$	72,661

Business Acquired and Contracts Incepting in the Year Ended December 31, 2013



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance															As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	141,479	$	154,707	$	161,367	$	149,397	$	140,275	$	163,936	$	117,398	$	20,406	35,539
2009	73,355		79,859		84,556		83,495		85,782		77,425		75,458		2,249		10,798
2010	110,815		118,740		113,479		133,045		135,120		124,905		122,412		4,000		10,968
2011	94,482		99,857		99,107		100,243		95,848		87,913		86,554		2,203		9,063
2012	131,066		127,271		121,328		118,085		114,772		110,045		107,853		2,654		3,503
2013	13,062		90,739		91,634		88,920		85,791		81,732		80,036		2,202		5,676
2014	—				4,514		3,714		3,425		16,800		16,225		124		175
2015	—						265		280		982		329		136		2
2016	—								103		71		70		4		—
2017	—										30		13		—		—
2018	—												22		4		—
	$	564,259											$	606,370	$	33,982	75,724

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	24,794	$	42,185	$	56,732	$	67,472	$	64,574	$	66,269
2009			23,624		41,720		52,664		60,486		59,810		65,201
2010			24,617		48,579		75,114		92,540		98,098		104,253
2011			30,323		52,455		63,952		70,498		75,055		77,096
2012			33,361		59,095		74,663		86,916		92,445		96,780
2013			17,022		37,653		52,638		62,876		68,866		71,487
2014					993		1,747		2,256		15,804		15,959
2015							43		102		112		165
2016									34		64		65
2017											9		13
2018													13
													$	497,301
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance													$	109,069

Business Acquired and Contracts Incepting in the Year Ended December 31, 2014



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance													As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	6,408	$	4,008	$	12,807	$	10,342	$	10,890	$	10,005	$	(82	)	3,102
2009	16,653		16,660		11,135		11,188		12,142		11,799		1,010			3,250
2010	88,445		85,176		100,646		133,824		119,628		115,867		6,740			6,416
2011	71,579		127,132		153,758		133,072		135,430		141,102		12,270			6,667
2012	111,052		116,752		177,374		185,033		178,528		165,648		8,088			5,076
2013	86,920		75,991		93,508		82,007		86,415		85,571		13,620			3,162
2014	—		14,448		9,917		8,740		7,394		6,154		4,328			1,113
2015	—				33,543		20,004		20,738		18,736		1,873			184
2016	—						393		1,038		4,728		87			37
2017	—								5,071		4,087		998			32
2018	—										6		4			13
	$	381,057									$	563,703	$	48,936		29,052

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	—	$	6,195	$	7,509	$	8,097	$	8,079
2009			6,244		5,956		8,140		8,256		8,525
2010			29,403		69,303		86,997		101,876		101,494
2011			83,733		109,089		109,761		107,670		121,972
2012			47,291		89,180		119,165		127,955		125,635
2013			21,624		39,847		47,052		55,262		60,093
2014			1,455		2,479		3,260		3,954		5,902
2015					1,740		4,282		11,466		12,956
2016							20		556		571
2017									537		1,553
2018											5
											$	446,785
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance											$	116,918

Business Acquired and Contracts Incepting in the Year Ended December 31, 2015



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	937,917	$	851,896	$	558,013	$	518,739	$	467,433	$	87,408	10,507
2009	15,534		21,850		24,324		22,490		25,519		5,050		968
2010	49,125		53,990		52,966		55,899		51,485		10,976		2,284
2011	124,473		137,175		131,062		129,445		127,203		27,098		5,109
2012	178,981		187,333		197,756		200,809		192,957		33,953		4,504
2013	229,274		189,521		196,290		199,681		188,635		28,841		5,143
2014	143,795		142,596		137,196		142,468		136,522		12,854		10,664
2015	22,811		69,337		68,322		65,446		63,986		4,703		20,998
2016	—				14,329		12,646		12,900		1,039		3,311
2017	—						4,065		4,502		325		855
2018	—								2,979		2,164		242
	$	1,701,910							$	1,274,121	$	214,411	64,585

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	17,038	$	58,929	$	89,533	$	112,037
2009			2,336		5,400		10,340		13,953
2010			9,191		15,304		19,675		25,640
2011			33,826		55,084		70,985		86,339
2012			52,728		94,781		119,413		142,208
2013			46,761		89,882		120,448		145,688
2014			30,747		64,381		90,801		109,217
2015			20,653		38,309		46,202		51,467
2016					5,386		7,112		8,385
2017							2,312		3,912
2018									560
									$	699,406
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance									$	574,715

Business Acquired and Contracts Incepting in the Year Ended December 31, 2015 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	919,158	$	822,252	$	526,222	$	485,189	$	435,607	$	80,160	7,963
2009	8,741		12,207		12,350		11,559		12,069		1,941		171
2010	31,919		34,360		31,402		30,407		27,360		4,003		468
2011	76,789		73,723		69,009		68,013		66,216		6,325		1,235
2012	120,298		110,007		108,251		106,625		99,446		10,793		1,800
2013	146,237		124,726		122,238		121,010		112,590		13,657		2,369
2014	82,141		86,852		82,038		83,095		77,884		6,223		3,665
2015	4,089		18,647		12,623		13,488		12,071		793		2,895
2016	—				873		955		583		138		38
2017	—						358		61		48		10
2018	—								—		—		1
	$	1,389,372							$	843,887	$	124,081	20,615

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For The Years Ended December 31,
Accident Year			2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	15,493	$	53,889	$	79,228	$	97,797
2009			1,061		2,952		5,854		7,171
2010			4,352		8,446		11,906		16,141
2011			16,032		30,462		39,635		50,470
2012			25,103		52,851		66,092		79,367
2013			27,737		55,675		75,065		91,559
2014			17,824		38,051		53,308		65,561
2015			3,034		5,672		7,917		9,169
2016					134		363		417
2017							2		10
2018									—
									$	417,662
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance									$	426,225

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,253,129	$	1,264,108	$	1,289,089	$	1,270,673	$	441,087	21,229
2009	29,081		28,961		31,299		28,023		9,296		739
2010	15,312		15,312		16,599		14,282		4,542		613
2011	17,291		17,291		19,920		19,754		3,673		747
2012	13,717		13,717		17,020		14,765		4,663		748
2013	373		373		1,312		1,237		946		96
2014	391		391		1,380		1,056		765		43
2015	—		—		—		—		—		—
2016	—		—		—		—		—		—
2017	—				—		—		—		—
2018	—						—		—		—
	$	1,329,294					$	1,349,790	$	464,972	24,215

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	94,972	$	208,671	$	311,721
2009			2,832		7,946		10,360
2010			2,068		4,137		5,905
2011			2,758		6,647		8,218
2012			2,734		5,206		6,461
2013			145		191		278
2014			178		207		284
2015			—		—		—
2016			—		—		—
2017					—		—
2018							—
							$	343,227
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	1,006,563

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Asbestos



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	506,930	$	505,241	$	565,448	$	563,630	$	325,953	1,397
	$	506,930					$	563,630	$	325,953	1,397

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	20,256	$	70,443	$	123,242
							123,242
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	440,388

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Environmental



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	118,691	$	118,691	$	129,591	$	136,557	$	41,424	947
	$	118,691					$	136,557	$	41,424	947

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	8,330	$	25,633	$	39,133
							39,133
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	97,424

Business Acquired and Contracts Incepting in the Year Ended December 31, 2016 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance									As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2016 (unaudited)		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	408,373	$	406,992	$	369,993	$	362,829	$	27,133	8,416
2009	20,892		20,772		21,474		18,476		5,637		191
2010	8,191		8,191		9,767		8,572		2,655		268
2011	15,376		15,376		16,399		16,501		1,566		473
2012	13,074		13,074		15,465		13,276		3,518		607
2013	—		—		—		—		—		—
2014	—		—		—		—		—		—
2015	—		—		—		—		—		—
2016	—		—		—		—		—		—
2017	—				—		—		—		—
2018	—						—		—		—
	$	465,906					$	419,654	$	40,509	9,955

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior			$	32,768	$	58,133	$	81,166
2009			1,482		4,439		5,918
2010			1,219		2,565		3,230
2011			2,631		5,871		7,305
2012			2,638		5,028		6,247
2013			—		—		—
2014			—		—		—
2015			—		—		—
2016			—		—		—
2017					—		—
2018							—
							$	103,866
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	315,788

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance								As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2017 (unaudited)			2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	1,364,332	$	1,297,232		$	1,233,017	$	786,519	9,003
2009	36,488		35,015			32,763		12,799		20
2010	33,609		28,417			18,901		6,633		36
2011	40,742		29,226			25,389		8,388		7
2012	43,647		34,946			31,230		8,237		11
2013	35,667		30,029			28,134		5,623		10
2014	32,858		20,315			16,984		3,306		19
2015	8,808		6,494			7,002		982		8
2016	362		(4		)	126		58		3
2017	—		174			—		—		1
2018	—					—		—		—
	$	1,596,513				$	1,393,546	$	832,545	9,118

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2017 (unaudited)			2018
2008 and Prior			$	71,708		$	150,472
2009			7,088			11,288
2010			4,286			7,393
2011			4,125			9,257
2012			10,348			15,371
2013			9,509			15,712
2014			6,482			8,986
2015			1,361			3,720
2016			(56		)	66
2017			4			—
2018						—
						$	222,265
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	1,171,281

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017 - Asbestos



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance							As of December 31, 2018
			For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired		2017 (unaudited)		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	888,394	$	847,036	$	766,788	$	613,475	4,477
2009	—		—		—		—		—
2010	—		—		—		—		—
2011	—		—		—		—		—
2012	—		—		—		—		—
2013	—		—		—		—		—
	$	888,394			$	766,788	$	613,475	4,477

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Years Ended December 31,
Accident Year			2017 (unaudited)		2018
2008 and Prior			$	19,733	$	57,030
2009			—		—
2010			—		—
2011			—		—
2012			—		—
2013			—		—
2014			—		—
2015			—		—
2016			—		—
2017			—		—
2018					—
					57,030
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance					$	709,758

Business Acquired and Contracts Incepting in the Year Ended December 31, 2017 - General Casualty



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance										As of December 31, 2018
				For the Years Ended December 31,
Accident Year	Total Net Reserves Acquired			2017 (unaudited)			2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	98,580		$	90,256		$	79,420		$	17,112	2,371
2009	17,641			18,897			16,904			5,638		1
2010	14,642			10,985			7,321			1,883		1
2011	17,902			11,459			11,418			4,529		1
2012	16,756			15,861			17,398			4,796		1
2013	16,870			17,720			17,358			3,159		1
2014	12,730			6,651			6,526			1,590		1
2015	3,112			3,464			4,424			818		1
2016	(72		)	(77		)	(21		)	56		1
2017	—			—			—			—		1
2018	—						—			—		—
	$	198,161					$	160,748		$	39,581	2,380

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
				For the Years Ended December 31,
Accident Year				2017 (unaudited)			2018
2008 and Prior				$	10,363		$	22,697
2009				3,341			6,237
2010				1,958			3,659
2011				753			3,724
2012				6,850			10,050
2013				5,927			9,667
2014				1,581			2,426
2015				469			2,487
2016				—			—
2017				—			—
2018							—
							60,947
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance							$	99,801

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	486,710	$	322,299	$	108,367	199,629
2009	68,375		60,850		4,586		9,862
2010	88,753		109,592		33,728		13,724
2011	156,555		145,051		26,322		13,995
2012	220,662		215,610		47,105		14,245
2013	261,673		265,032		70,607		15,928
2014	405,168		448,775		136,884		19,020
2015	348,524		467,058		155,456		23,632
2016	169,194		171,134		84,128		2,095
2017	206,944		207,082		130,071		4,238
2018	318,474		318,474		222,772		5,032
	$	2,731,032	$	2,730,957	$	1,020,026	321,400

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	26,326
2009			15,338
2010			11,010
2011			26,671
2012			31,391
2013			41,824
2014			93,171
2015			100,091
2016			6,275
2017			52
2018			—
			$	352,149
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	2,378,808

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - General Casualty



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR		Cumulative Number of Claims
2008 and Prior	$	84,065	$	40,977	$	9,892	44,790
2009	9,157		7,123		1,437		1,006
2010	28,863		22,098		4,240		1,856
2011	16,394		14,709		2,302		1,392
2012	33,326		30,385		7,501		1,549
2013	38,708		53,146		16,166		1,563
2014	54,487		73,680		22,038		2,149
2015	74,380		87,639		32,230		3,296
2016	27,306		27,306		15,306		252
2017	36,246		36,246		24,289		232
2018	35,770		35,770		23,606		186
	$	438,702	$	429,079	$	159,007	58,271

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	3,181
2009			850
2010			5,981
2011			2,480
2012			1,819
2013			10,855
2014			14,645
2015			17,210
2016			—
2017			—
2018			—
			$	57,021
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	372,058

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR		Cumulative Number of Claims
2008 and Prior	$	83,867	$	84,667		$	20,321	1,483
2009	22,548		17,287			6,039		259
2010	24,914		25,231			11,209		362
2011	30,399		25,693			13,686		419
2012	29,438		29,880			15,481		484
2013	38,737		39,263			21,095		888
2014	69,212		70,525			37,658		1,380
2015	39,430		39,794			23,340		1,408
2016	49,476		49,476			32,657		886
2017	57,899		57,899			43,036		993
2018	68,486		68,486			59,043		885
	$	514,406	$	508,201		$	283,565	9,447

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	—
2009			3,788
2010			316
2011			(1,402		)
2012			520
2013			1,527
2014			3,238
2015			1,342
2016			—
2017			—
2018			—
			$	9,329
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	498,872

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Marine, Aviation & Transit



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR			Cumulative Number of Claims
2008 and Prior	$	38,020	$	25,608		$	(6,123	)	54,343
2009	8,569		5,091			(3,636		)	2,649
2010	3,402		3,700			5,905			3,248
2011	8,795		10,053			646			3,962
2012	16,038		12,198			(1,141		)	4,265
2013	44,550		36,642			4,640			5,699
2014	64,292		84,106			13,641			5,838
2015	32,534		69,590			10,864			6,516
2016	29		29			24			79
2017	134		134			120			71
2018	1,399		1,399			1,386			66
	$	217,762	$	248,550		$	26,326		86,736

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	859
2009			2,410
2010			(3,887		)
2011			5,094
2012			1,323
2013			6,093
2014			25,299
2015			24,638
2016			—
2017			—
2018			—
			$	61,829
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	186,721

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Professional Indemnity/Directors & Officers.



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	140,108	$	72,453	$	8,451		48,133
2009	30,592		21,317		(9,645		)	4,246
2010	35,237		39,743		8,473			4,251
2011	39,028		49,320		10,443			3,736
2012	53,094		66,622		13,273			3,249
2013	52,894		59,615		16,106			3,186
2014	83,767		104,639		36,447			3,518
2015	48,715		96,152		48,769			3,804
2016	—		—		—			—
2017	—		—		—			—
2018	—		—		—			—
	$	483,435	$	509,861	$	132,317		74,123

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	20,413
2009			6,891
2010			3,969
2011			12,927
2012			16,105
2013			10,992
2014			23,424
2015			14,111
2016			—
2017			—
2018			—
			$	108,832
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	401,029

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Motor



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance					As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018		IBNR			Cumulative Number of Claims
2008 and Prior	$	115,064	$	11,687	$	3,708		265
2009	8,370		3,922		986			86
2010	23,614		13,761		(206		)	920
2011	41,740		36,047		1,539			1,219
2012	50,413		53,766		4,875			1,611
2013	50,493		66,587		15,539			667
2014	76,186		98,361		28,650			1,203
2015	87,977		125,513		30,960			1,371
2016	79,459		86,144		36,147			701
2017	90,289		90,479		59,706			2,766
2018	150,684		150,684		112,294			3,726
	$	774,289	$	736,951	$	294,198		14,535

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	1,518
2009			887
2010			4,578
2011			6,158
2012			12,600
2013			10,703
2014			21,007
2015			20,070
2016			6,275
2017			52
2018			—
			$	83,848
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	653,103

Business Acquired and Contracts Incepting in the Year Ended December 31, 2018 - Property



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance						As of December 31, 2018
			For the Year Ended December 31,
Accident Year	Total Net Reserves Acquired		2018			IBNR			Cumulative Number of Claims
2008 and Prior	$	3,441	$	8,012		$	(393	)	49,684
2009	623		579			(266		)	1,387
2010	3,095		2,186			2			2,776
2011	2,655		2,915			1,043			2,965
2012	4,571		3,276			(15		)	2,770
2013	7,640		8,771			305			3,657
2014	14,663		14,249			873			4,389
2015	44,595		46,448			456			6,649
2016	8,152		8,152			(34		)	174
2017	22,267		22,267			2,860			174
2018	61,894		61,894			26,202			166
	$	173,596	$	178,749		$	31,033		74,791

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the Year Ended December 31,
Accident Year			2018
2008 and Prior			$	257
2009			39
2010			119
2011			273
2012			(236		)
2013			1,640
2014			3,958
2015			20,760
2016			—
2017			—
2018			—
			$	26,810
Total outstanding liabilities for unpaid losses and LAE, net of reinsurance			$	151,939

Annual Historical Duration of Claims



	Annual Percentage Payout of Incurred Losses since Year of Acquisition, Net of Reinsurance
Year of Acquisition	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
2009 - All lines of business	1.07	%	7.73	%	10.56	%	2.27	%	8.71	%	6.12	%	3.21	%	7.55	%	3.57	%	4.34	%
2010 - All lines of business	13.72	%	15.73	%	21.40	%	10.67	%	3.61	%	3.69	%	2.25	%	3.79	%	2.07	%
2011 - All lines of business	23.37	%	14.51	%	(1.99	)%	(27.39	)%	(2.48	)%	3.47	%	(3.05	)%	4.01	%
2012 - All lines of business	1.19	%	24.87	%	15.69	%	11.77	%	9.34	%	4.24	%	5.10	%
2013 - All lines of business	25.35	%	21.26	%	15.65	%	10.82	%	5.22	%	3.70	%
2014 - All lines of business	33.66	%	23.78	%	11.07	%	7.00	%	3.75	%
2015 - All lines of business	16.74	%	16.81	%	11.72	%	9.62	%
2015 - Workers' compensation	13.11	%	16.29	%	10.81	%	9.28	%
2016 - All lines of business	7.83	%	9.43	%	8.17	%
2016 - Asbestos	3.59	%	8.90	%	9.37	%
2016 - Environment	6.10	%	12.67	%	9.89	%
2016 - Workers' Compensation	9.71	%	8.41	%	6.63	%
2017 - All lines of business	8.24	%	7.71	%
2017 - Asbestos	2.57	%	4.86	%
2017 - General Casualty	19.44	%	18.48	%
2018 - All lines of business	12.89	%
2018 - General Casualty	13.29	%
2018 - Workers' Compensation	1.84	%
2018 - Marine, Aviation & Transit	24.88	%
2018 - Professional Indemnity/Directors & Officers	21.35	%
2018 - Motor	11.38	%
2018 - Property	15.00	%

AtriumThe table below provides a reconciliation of the beginning and ending liability for losses and LAE for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Balance as at January 1	$	240,873		$	212,122		$	201,017
Less: reinsurance reserves recoverable	40,531			30,009			25,852
Net balance as at January 1	200,342			182,113			175,165
Net incurred losses and LAE:
Current period	83,627			90,359			71,358
Prior periods	(13,817		)	(20,940		)	(12,971		)
Total net incurred losses and LAE	69,810			69,419			58,387
Net paid losses:
Current period	(35,537		)	(24,571		)	(23,582		)
Prior periods	(28,969		)	(31,107		)	(24,416		)
Total net paid losses	(64,506		)	(55,678		)	(47,998		)
Effect of exchange rate movement	(3,130		)	4,488			(3,441		)
Net balance as at December 31	202,516			200,342			182,113
Plus: reinsurance reserves recoverable	38,768			40,531			30,009
Balance as at December 31	$	241,284		$	240,873		$	212,122

Net incurred losses and LAE in the Atrium segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period		Total
Net losses paid	$	28,969		$	35,537	$	64,506		$	31,107		$	24,571	$	55,678		$	24,416		$	23,582	$	47,998
Net change in case and LAE reserves	(10,161		)	16,492		6,331			(13,324		)	21,662		8,338			(13,115		)	12,967		(148		)
Net change in IBNR reserves	(27,507		)	31,598		4,091			(35,650		)	43,329		7,679			(20,543		)	34,243		13,700
Increase (reduction) in estimates of net ultimate losses	(8,699		)	83,627		74,928			(17,867		)	89,562		71,695			(9,242		)	70,792		61,550
Increase in provisions for bad debt	—			—		—			89			70		159			—			—		—
Increase (reduction) in provisions for unallocated LAE	—			—		—			(442		)	727		285			(421		)	566		145
Amortization of fair value adjustments	(5,118		)	—		(5,118		)	(2,720		)	—		(2,720		)	(3,308		)	—		(3,308		)
Net incurred losses and LAE	$	(13,817	)	$	83,627	$	69,810		$	(20,940	)	$	90,359	$	69,419		$	(12,971	)	$	71,358	$	58,387

Disclosures of Incurred and Paid Loss Development, IBNR, Claims Counts and Payout Percentages



	2018
	Gross						Net
	OLR		IBNR		Total		OLR		IBNR		Total
	(in thousands of U.S. dollars)
Marine, Aviation and Transit	$	32,999	$	36,011	$	69,010	$	21,460	$	24,207	$	45,667
Binding Authorities	28,512		59,302		87,814		26,601		57,016		83,617
Reinsurance	18,547		27,653		46,200		15,180		24,823		40,003
Accident and Health	4,972		6,348		11,320		4,225		5,837		10,062
Non-Marine Direct and Facultative	9,855		11,207		21,062		8,529		9,389		17,918
Total	$	94,885	$	140,521	$	235,406	$	75,995	$	121,272	$	197,267
Fair value adjustments					3,476						2,847
ULAE					2,402						2,402
Total					$	241,284					$	202,516



	2017
	Gross						Net
	OLR		IBNR		Total		OLR		IBNR		Total
	(in thousands of U.S. dollars)
Marine, Aviation and Transit	$	24,581	$	46,138	$	70,719	$	20,177	$	28,551	$	48,728
Binding Authorities	26,115		51,896		78,011		24,158		49,486		73,644
Reinsurance	14,381		34,489		48,870		13,815		26,336		40,151
Accident and Health	3,716		5,518		9,234		3,296		4,994		8,290
Non-Marine Direct and Facultative	9,570		12,467		22,037		9,444		9,665		19,109
Total	$	78,363	$	150,508	$	228,871	$	70,890	$	119,032	$	189,922
Fair value adjustments					9,547						7,965
ULAE					2,455						2,455
Total					$	240,873					$	200,342



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of December 31, 2018
Accident Year	2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	500,211		503,236		549,063		538,463		521,835		519,162		515,066		512,187		510,687		499,948		5,514		1,439
2009	27,570		40,073		56,949		51,804		48,592		47,663		45,919		45,197		44,947		54,509		1,112		216
2010			26,676		64,641		57,524		51,433		47,309		45,776		45,293		44,049		43,501		863		280
2011					85,641		84,006		72,297		70,524		68,799		67,505		66,773		66,317		1,487		378
2012							70,040		57,094		55,745		53,582		51,800		50,880		50,399		989		517
2013									58,144		63,518		57,599		54,288		51,534		51,894		2,405		829
2014											68,975		69,230		65,812		60,255		57,384		5,237		1,290
2015													69,347		71,112		63,198		59,906		9,190		2,183
2016															72,753		74,799		69,704		14,229		3,856
2017																	89,814		94,485		27,401		6,287
2018																			84,612		52,845		5,590
																	Total		$	1,132,659	$	121,272	22,865
⁽¹⁾ Total of IBNR plus expected development on reported losses.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2009 (unaudited)		2010 (unaudited)		2011 (unaudited)		2012 (unaudited)		2013 (unaudited)		2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	438,313	$	461,160	$	472,617	$	480,751	$	488,939	$	492,516	$	496,718	$	498,426	$	499,533	$	497,063
2009	11,910		27,487		34,408		37,887		39,882		41,069		41,741		42,023		42,278		43,212
2010			11,425		25,006		32,075		36,349		38,815		39,829		40,416		40,989		41,151
2011					16,991		39,667		51,975		58,114		62,012		63,351		64,631		64,102
2012							11,211		31,366		37,869		42,026		44,308		45,194		46,757
2013									14,552		31,972		40,314		43,375		45,249		45,963
2014											17,524		34,232		41,425		46,663		48,298
2015													11,993		29,562		38,806		44,324
2016															13,665		34,408		43,992
2017																	14,312		47,500
2018																			13,030
																	Total		$	935,392
					Total outstanding liabilities for unpaid losses and LAE, net of reinsurance														$	197,267



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	197,267
Reinsurance recoverable on unpaid losses	38,139
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	235,406

The following is unaudited supplementary information for average annual historical duration of claims within the Atrium segment:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Atrium	22.47	%	32.32	%	14.77	%	8.28	%	4.37	%	1.93	%	1.90	%	0.35	%	0.42	%	1.71	%

StarStoneThe table below provides a reconciliation of the beginning and ending liability for losses and LAE for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Balance as at January 1	$	1,207,743		$	1,059,382		$	933,678
Less: reinsurance reserves recoverable	452,017			357,231			299,783
Net balance as at January 1	755,726			702,151			633,895
Net incurred losses and LAE:
Current period	578,892			341,628			415,829
Prior periods	94,491			(26,822		)	(14,236		)
Total net incurred losses and LAE	673,383			314,806			401,593
Net paid losses:
Current period	(150,778		)	(54,867		)	(52,128		)
Prior periods	(326,352		)	(252,926		)	(199,125		)
Total net paid losses	(477,130		)	(307,793		)	(251,253		)
Effect of exchange rate movement	(9,481		)	15,169			(15,984		)
Acquired on purchase of subsidiaries	192,981			—			—
Assumed business	10,268			31,393			—
Ceded business	—			—			(66,100		)
Net balance as at December 31	1,145,747			755,726			702,151
Plus: reinsurance reserves recoverable	462,950			452,017			357,231
Balance as at December 31	$	1,608,697		$	1,207,743		$	1,059,382

Net incurred losses and LAE in the StarStone segment for the years ended December 31, 2018, 2017 and 2016 were as follows:



	2018								2017								2016
	Prior Period			Current Period		Total			Prior Period			Current Period		Total			Prior Period			Current Period		Total
Net losses paid	$	326,352		$	150,778	$	477,130		$	252,926		$	54,867	$	307,793		$	199,125		$	52,128	$	251,253
Net change in case and LAE reserves	(81,491		)	157,378		75,887			(63,785		)	95,470		31,685			(51,309		)	124,358		73,049
Net change in IBNR reserves	(144,212		)	258,091		113,879			(208,244		)	184,704		(23,540		)	(156,546		)	232,189		75,643
Increase (reduction) in estimates of net ultimate losses	100,649			566,247		666,896			(19,103		)	335,041		315,938			(8,730		)	408,675		399,945
Increase (reduction) in provisions for unallocated LAE	(5,892		)	12,645		6,753			(6,774		)	6,587		(187		)	(3,611		)	7,154		3,543
Amortization of fair value adjustments	(266		)	—		(266		)	(945		)	—		(945		)	(1,895		)	—		(1,895		)
Net incurred losses and LAE	$	94,491		$	578,892	$	673,383		$	(26,822	)	$	341,628	$	314,806		$	(14,236	)	$	415,829	$	401,593



	2018
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Casualty	$	177,432	$	331,432	$	508,864		$	137,828	$	282,026	$	419,854
Marine	185,084		182,453		367,537			163,889		133,426		297,315
Property	317,102		123,511		440,613			151,774		65,522		217,296
Aerospace	67,203		40,416		107,619			45,879		36,167		82,046
Workers' Compensation	49,373		110,082		159,455			33,759		68,969		102,728
Total	$	796,194	$	787,894	$	1,584,088		$	533,129	$	586,110	$	1,119,239
Fair value adjustments					(467		)					1,432
ULAE					25,076							25,076
Total					$	1,608,697						$	1,145,747



	2017
	Gross							Net
	OLR		IBNR		Total			OLR		IBNR		Total
	(in thousands of U.S. dollars)
Casualty	$	139,200	$	282,789	$	421,989		$	98,070	$	188,518	$	286,588
Marine	130,962		118,375		249,337			94,115		69,828		163,943
Property	208,777		89,963		298,740			115,148		39,280		154,428
Aerospace	63,920		26,070		89,990			40,781		17,055		57,836
Workers' Compensation	48,118		82,024		130,142			31,213		41,920		73,133
Total	$	590,977	$	599,221	$	1,190,198		$	379,327	$	356,601	$	735,928
Fair value adjustments					(555		)					1,698
ULAE					18,100							18,100
Total					$	1,207,743						$	755,726



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (Unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	60,044	$	60,046	$	60,119	$	60,041	$	60,077	$	—	2,080
2009	20,026		20,085		20,085		20,089		20,261		3		463
2010	16,173		17,320		17,406		18,085		18,103		171		728
2011	20,969		25,275		25,633		24,861		25,301		816		2,034
2012	56,901		48,179		43,901		40,082		39,468		978		3,121
2013	72,918		66,628		77,630		76,072		78,777		6,811		4,974
2014	91,491		92,600		92,857		90,459		90,685		12,504		5,694
2015			104,603		111,262		110,453		123,529		27,687		4,698
2016					125,456		129,264		140,765		41,362		4,363
2017							137,600		162,707		72,210		4,613
2018									159,331		119,484		2,982
							Total		$	919,004	$	282,026	35,750
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (Unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	60,044	$	60,046	$	60,119	$	60,041	$	60,077
2009	20,026		20,085		20,085		20,089		20,261
2010	15,113		17,320		17,406		18,085		18,103
2011	15,605		20,945		23,612		24,176		24,806
2012	18,348		29,436		32,625		33,873		36,082
2013	23,056		30,400		50,018		54,570		60,273
2014	5,737		21,884		37,575		50,740		64,658
2015			8,121		27,389		49,136		68,363
2016					4,659		42,999		75,019
2017							9,992		50,704
2018									20,804
							Total		$	499,150
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	419,854

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	419,854
Reinsurance recoverable on unpaid losses	89,010
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	508,864

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Casualty	7.1	%	21.4	%	16.7	%	20.8	%	12.6	%	8.3	%	1.7	%	1.6	%	—	%	0.5	%

Marine



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	16,526	$	16,557	$	16,600	$	16,620	$	16,644	$	—	1,361
2009	10,420		10,321		10,294		10,307		10,308		—		629
2010	22,356		19,282		19,123		19,185		19,054		265		1,026
2011	29,616		27,854		27,430		27,469		27,809		392		1,953
2012	48,187		51,686		51,341		50,073		50,877		421		2,414
2013	62,952		55,068		52,846		53,780		57,059		99		2,210
2014	50,259		53,650		48,624		55,074		50,713		601		3,931
2015			71,122		70,134		79,611		81,159		2,640		5,605
2016					82,859		83,670		87,791		14,330		6,679
2017							131,200		159,664		50,006		7,799
2018									168,750		64,672		6,302
							Total		$	729,829	$	133,426	39,909
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	16,518	$	16,557	$	16,600	$	16,620	$	16,644
2009	10,298		10,309		10,291		10,298		10,308
2010	16,307		18,337		18,415		18,386		18,450
2011	24,366		25,419		26,392		26,639		26,748
2012	38,547		42,684		44,509		45,294		45,742
2013	29,186		38,324		42,405		44,863		46,921
2014	10,930		24,933		32,463		36,908		42,560
2015			10,883		30,685		50,222		56,305
2016					12,200		42,041		57,764
2017							25,417		69,437
2018									41,635
							Total		$	432,514
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	297,315

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	297,315
Reinsurance recoverable on unpaid losses	70,222
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	367,537

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Marine	17.9	%	28.4	%	18.2	%	7.9	%	5.7	%	4.8	%	0.5	%	0.1	%	0.2	%	0.1	%

Property



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	84,812	$	84,652	$	84,265	$	84,500	$	82,172	$	—	1,835
2009	28,360		27,824		28,297		28,550		31,831		—		1,060
2010	74,412		72,959		71,600		71,661		71,679		—		1,561
2011	90,707		89,271		89,305		88,991		88,919		—		1,612
2012	65,516		61,422		60,420		61,350		58,443		—		1,495
2013	77,944		64,848		64,509		63,673		61,930		—		1,956
2014	58,855		43,619		42,917		43,308		41,258		846		2,077
2015			78,721		76,362		70,132		70,018		2,064		5,580
2016					87,266		94,995		94,530		4,690		6,710
2017							155,053		171,510		19,966		7,766
2018									164,155		37,956		4,383
							Total		$	936,445	$	65,522	36,035
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	84,362	$	84,594	$	84,265	$	84,278	$	80,906
2009	27,693		27,731		28,088		28,325		31,607
2010	68,605		71,491		71,600		71,661		71,679
2011	86,986		88,197		88,697		88,944		88,919
2012	47,879		51,935		54,072		55,027		55,222
2013	30,763		46,146		50,932		52,982		59,070
2014	5,470		18,727		31,426		34,347		35,868
2015			10,410		28,582		55,204		63,718
2016					26,741		57,761		74,938
2017							37,369		98,107
2018									59,115
							Total		$	719,149
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	217,296

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	217,296
Reinsurance recoverable on unpaid losses	223,317
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	440,613

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Property	22.8	%	31.6	%	28.0	%	8.5	%	3.0	%	4.0	%	0.2	%	0.2	%	0.3	%	0.2	%

Aerospace



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	—	$	—	$	—	$	—	$	—	$	—	—
2009	—		—		—		—		—		—		—
2010	18,516		18,144		18,454		18,956		19,032		78		572
2011	58,771		57,244		57,668		58,102		59,637		215		2,188
2012	55,720		55,418		56,261		56,214		57,506		356		2,410
2013	72,065		70,148		70,475		74,847		77,341		801		2,549
2014	65,227		53,549		53,563		52,342		54,412		1,149		2,830
2015			66,347		69,500		72,503		73,175		1,874		2,922
2016					37,728		44,912		48,093		6,853		2,783
2017							31,257		35,050		1,585		2,809
2018									59,448		23,256		1,682
							Total		$	483,694	$	36,167	20,745
⁽¹⁾ Total of IBNR plus expected development on reported losses
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	—	$	—	$	—	$	—	$	—
2009	—		—		—		—		—
2010	15,471		16,615		17,218		18,274		18,558
2011	53,812		55,170		55,850		56,427		57,020
2012	45,950		49,381		52,191		53,668		54,859
2013	50,856		59,845		63,417		68,735		72,721
2014	17,307		31,165		38,439		40,686		43,805
2015			32,375		52,180		60,813		63,986
2016					11,803		31,798		36,963
2017							10,389		28,200
2018									25,536
							Total		$	401,648
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	82,046

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	82,046
Reinsurance recoverable on unpaid losses	25,573
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	107,619

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Aerospace	34.6	%	31.4	%	11.9	%	4.8	%	4.9	%	3.7	%	2.1	%	3.3	%	1.5	%	—	%

Workers' Compensation



Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,										As of December 31, 2018
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018		IBNR⁽¹⁾		Cumulative Number of Claims
2008 and Prior	$	—	$	—	$	—	$	—	$	—	$	—	—
2009	—		—		—		—		—		—		—
2010	—		—		—		—		—		—		—
2011	—		—		—		—		—		—		—
2012	—		—		—		—		—		—		—
2013	—		—		—		—		—		—		—
2014	15,607		17,199		18,290		15,662		15,202		1,755		1,062
2015			54,977		55,505		50,103		47,338		6,620		2,518
2016					62,942		54,121		54,793		12,404		2,489
2017							43,366		39,089		17,876		2,079
2018									44,615		30,314		2,303
							Total		$	201,037	$	68,969	10,451
⁽¹⁾ Total of IBNR plus expected development on reported losses.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
	For The Years Ended December 31,
Accident Year	2014 (unaudited)		2015 (unaudited)		2016 (unaudited)		2017 (unaudited)		2018
2008 and Prior	$	—	$	—	$	—	$	—	$	—
2009	—		—		—		—		—
2010	—		—		—		—		—
2011	—		—		—		—		—
2012	—		—		—		—		—
2013	—		—		—		—		—
2014	1,491		6,079		9,279		11,431		12,242
2015			6,361		20,194		30,439		35,311
2016					7,953		23,428		32,739
2017							5,477		13,509
2018									4,508
							Total		$	98,309
			Total outstanding liabilities for unpaid losses and LAE, net of reinsurance						$	102,728

The reconciliation of incurred and paid loss development to the liability for unpaid losses and LAE as presented in the tables above for the year ended December 31, 2018 is set forth below:



	2018
Liabilities for unpaid losses and allocated LAE, net of reinsurance	$	102,728
Reinsurance recoverable on unpaid losses	56,727
Gross liability for unpaid losses and LAE before unallocated loss adjustment expenses and fair value adjustments	$	159,455

The following is unaudited supplementary information for average annual historical duration of claims:



	Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Workers' compensation	12.4	%	27.0	%	19.9	%	12.2	%	5.3	%	—	%	—	%	—	%	—	%	—	%

12. POLICY BENEFITS FOR LIFE CONTRACTS

Premiums Written and Earned

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

PREMIUMS WRITTEN AND EARNED

8. REINSURANCE BALANCES RECOVERABLE ON PAID AND UNPAID LOSSESThe following table provides the total reinsurance balances recoverable on paid and unpaid losses as of December 31, 2018 and 2017:



	2018
	Non-life Run-off			Atrium			StarStone			Other		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	901,772		$	18,891		$	263,065		$	—	$	1,183,728
IBNR	609,434			19,247			201,784			—		830,465
Fair value adjustments - acquired companies	(14,344		)	630			(1,899		)	—		(15,613		)
Fair value adjustments - fair value option	(130,739		)	—			—			—		(130,739		)
Total reinsurance reserves recoverable	1,366,123			38,768			462,950			—		1,867,841
Paid losses recoverable	138,265			(256		)	23,813			—		161,822
	$	1,504,388		$	38,512		$	486,763		$	—	$	2,029,663

Reinsurance balances recoverable on paid and unpaid losses	$	764,797		$	38,512		$	486,763		$	—	$	1,290,072
Reinsurance balances recoverable on paid and unpaid losses - fair value option	739,591			—			—			—		739,591
Total	$	1,504,388		$	38,512		$	486,763		$	—	$	2,029,663



	2017
	Non-life Run-off			Atrium			StarStone			Other		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	932,284		$	7,472		$	211,650		$	—	$	1,151,406
IBNR	590,154			31,476			242,620			—		864,250
Fair value adjustments - acquired companies	(12,970		)	1,583			(2,253		)	—		(13,640		)
Fair value adjustments - fair value option	(131,983		)	—			—			—		(131,983		)
Total reinsurance reserves recoverable	1,377,485			40,531			452,017			—		1,870,033
Paid losses recoverable	128,253			(451		)	23,179			16		150,997
	$	1,505,738		$	40,080		$	475,196		$	16	$	2,021,030
Reconciliation to Consolidated Balance Sheet:
Reinsurance balances recoverable on paid and unpaid losses	$	963,514		$	40,080		$	475,196		$	16	$	1,478,806
Reinsurance balances recoverable on paid and unpaid losses - fair value option	542,224			—			—			—		542,224
Total	$	1,505,738		$	40,080		$	475,196		$	16	$	2,021,030



	December 31, 2018												December 31, 2017
	Non-life Run-off		Atrium		StarStone		Other		Total		% of Total		Non-life Run-off		Atrium		StarStone		Other		Total		% of Total
Top ten reinsurers	$	1,124,079	$	25,239	$	263,192	$	—	$	1,412,510	69.6	%	$	1,166,057	$	22,422	$	328,257	$	—	$	1,516,736	75.0	%
Other reinsurers > $1 million	364,098		12,091		220,123		—		596,312		29.4	%	322,722		16,631		144,336		—		483,689		24.0	%
Other reinsurers < $1 million	16,211		1,182		3,448		—		20,841		1.0	%	16,959		1,027		2,603		16		20,605		1.0	%
Total	$	1,504,388	$	38,512	$	486,763	$	—	$	2,029,663	100.0	%	$	1,505,738	$	40,080	$	475,196	$	16	$	2,021,030	100.0	%



	December 31, 2018		December 31, 2017
Information regarding top ten reinsurers:
Number of top 10 reinsurers rated A- or better	7		6
Number of top 10 non-rated reinsurers ⁽¹⁾	3		4

Top 10 rated A- or better reinsurers recoverables	$	1,096,272	$	829,164
Top 10 collaterized non-rated reinsurers recoverables ⁽¹⁾	316,238		687,572
	$	1,412,510	$	1,516,736

Single reinsurers that represent 10% or more of total reinsurance balance recoverables as at September 30, 2018:

Hannover Ruck SE ⁽²⁾	$	279,723	$	320,047
Lloyd's Syndicates ⁽³⁾	$	334,509	$	193,838

⁽²⁾ Hannover Ruck SE is rated AA- by Standard & Poor’s and A+ by A.M. Best.

⁽³⁾ Lloyd's Syndicates are rated A+ by Standard & Poor's and A by A.M. Best. Provisions for Uncollectible Reinsurance Balances Recoverable on Paid and Unpaid Losses

We evaluate and monitor concentration of credit risk among our reinsurers. Provisions are made for amounts considered potentially uncollectible.



	2018								2017
	Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross		Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross
Reinsurers rated A- or above	$	1,612,464	$	51,519	$	1,560,945	3.2	%	$	1,252,887	$	51,115	$	1,201,772	4.1	%
Reinsurers rated below A-, secured	430,852		—		430,852		—	%	771,097		—		771,097		—	%
Reinsurers rated below A-, unsecured	143,079		105,213		37,866		73.5	%	162,259		114,098		48,161		70.3	%
Total	$	2,186,395	$	156,732	$	2,029,663	7.2	%	$	2,186,243	$	165,213	$	2,021,030	7.6	%

13. PREMIUMS WRITTEN AND EARNED

The following tables provide a summary of net premiums written and earned for the years ended December 31, 2018, 2017 and 2016:



	2018						2017						2016
	Premiums Written			Premiums Earned			Premiums Written			Premiums Earned			Premiums Written			Premiums Earned
Non-life Run-off
Gross	$	(8,910	)	$	25,230		$	14,102		$	23,950		$	17,316		$	25,989
Ceded	(307		)	(15,803		)	(7,620		)	(9,788		)	(8,114		)	(9,234		)
Net	$	(9,217	)	$	9,427		$	6,482		$	14,162		$	9,202		$	16,755
Atrium
Gross	$	171,494		$	164,428		$	153,472		$	152,278		$	143,170		$	140,438
Ceded	(18,006		)	(18,113		)	(19,258		)	(17,531		)	(2,733		)	(16,022		)
Net	$	153,488		$	146,315		$	134,214		$	134,747		$	140,437		$	124,416
StarStone
Gross	$	1,121,135		$	1,010,816		$	895,160		$	865,159		$	854,699		$	830,186
Ceded	(315,573		)	(295,857		)	(430,259		)	(405,756		)	(206,663		)	(153,578		)
Net	$	805,562		$	714,959		$	464,901		$	459,403		$	648,036		$	676,608
Other
Gross	$	32,378		$	25,237		$	5,719		$	5,900		$	7,157		$	7,220
Ceded	(311		)	(363		)	(926		)	(1,091		)	(896		)	(1,485		)
Net	$	32,067		$	24,874		$	4,793		$	4,809		$	6,261		$	5,735
Total
Gross	$	1,316,097		$	1,225,711		$	1,068,453		$	1,047,287		$	1,022,342		$	1,003,833
Ceded	(334,197		)	(330,136		)	(458,063		)	(434,166		)	(218,406		)	(180,319		)
Net	$	981,900		$	895,575		$	610,390		$	613,121		$	803,936		$	823,514

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

14. GOODWILL AND INTANGIBLE ASSETSThe following table presents a reconciliation of the beginning and ending goodwill and intangible assets for the years ended December 31, 2018 and 2017:



			Intangible assets
	Goodwill		Intangible assets with a definite life			Intangible assets with an indefinite life		Total			Total
Balance as at December 31, 2016	$	73,071	$	24,753		$	87,031	$	111,784		$	184,855
Acquired during the year	—		—			—		—			—
Amortization	—		(4,266		)	—		(4,266		)	(4,266		)
Balance as at December 31, 2017	$	73,071	$	20,487		$	87,031	$	107,518		$	180,589
Acquired during the year	41,736		—			—		—			41,736
Amortization	—		(3,600		)	—		(3,600		)	(3,600		)
Balance as at December 31, 2018	$	114,807	$	16,887		$	87,031	$	103,918		$	218,725

Goodwill

Goodwill as of December 31, 2018 and 2017, related to our Non-life Run-off, Atrium and StarStone segments, was as follows:



	2018		2017
Non-life Run-Off	$	62,959	$	21,223
Atrium	38,848		38,848
StarStone	13,000		13,000
	$	114,807	$	73,071

The increase in the goodwill balance in the Non-life Run-off segment was due to the acquisition of KaylaRe as discussed in Note 3 - "Acquisitions", which resulted in the recognition of goodwill of $41.7 million, none of which is amortizable for tax purposes. For the year ended December 31, 2018, we completed our assessment for impairment of goodwill and concluded that there had been no impairment of our carried goodwill amount.Intangible Assets

Intangible assets with a definite life includes the distribution channel, technology and brand related to our acquisitions of Atrium and StarStone. These assets are amortized on a straight-line basis over a period ranging from four to fifteen years. The following table provides a summary of the amortization recorded on the intangible assets for the years ended December 31, 2018, 2017 and 2016:



	2018		2017		2016
Intangible asset amortization	$	3,600	$	4,266	$	6,449

Intangible assets with an indefinite life includes assets associated with the Lloyd’s syndicate capacity for StarStone and Atrium, StarStone's U.S. insurance licenses, and Atrium’s management contract with Syndicate 609 in relation to underwriting, actuarial and support services it provides.The gross carrying value, accumulated amortization and net carrying value of intangible assets by type as of December 31, 2018 and 2017 was as follows:



	2018							2017
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets with a definite life:
Distribution channel	$	20,000	$	(6,776	)	$	13,224	$	20,000	$	(5,444	)	$	14,556
Technology	15,000		(14,778		)	222		15,000		(13,210		)	1,790
Brand	7,000		(3,559		)	3,441		7,000		(2,859		)	4,141
Total	$	42,000	$	(25,113	)	$	16,887	$	42,000	$	(21,513	)	$	20,487
Intangible assets with an indefinite life:
Lloyd’s syndicate capacity	$	37,031	$	—		$	37,031	$	37,031	$	—		$	37,031
Licenses	19,900		—			19,900		19,900		—			19,900
Management contract	30,100		—			30,100		30,100		—			30,100
Total	$	87,031	$	—		$	87,031	$	87,031	$	—		$	87,031

The net carrying value of intangible assets by segment and by type as of December 31, 2018 and 2017 was as follows:



	2018						2017
	Atrium		StarStone		Total		Atrium		StarStone		Total
Intangible assets with a definite life:
Distribution channel	$	13,224	$	—	$	13,224	$	14,556	$	—	$	14,556
Technology	—		222		222		—		1,790		1,790
Brand	3,441		—		3,441		4,141		—		4,141
Total	$	16,665	$	222	$	16,887	$	18,697	$	1,790	$	20,487
Intangible assets with an indefinite life:
Lloyd’s syndicate capacity	$	33,031	$	4,000	$	37,031	$	33,031	$	4,000	$	37,031
Licenses	—		19,900		19,900		—		19,900		19,900
Management contract	30,100		—		30,100		30,100		—		30,100
Total	$	63,131	$	23,900	$	87,031	$	63,131	$	23,900	$	87,031

Total intangible assets	$	79,796	$	24,122	$	103,918	$	81,828	$	25,690	$	107,518

The estimated future amortization expense related to our intangible assets with a definite life is as follows:



Year	Atrium		StarStone		Total
2019	$	2,033	$	222	$	2,255
2020	2,033		—		2,033
2021	2,033		—		2,033
2022	2,033		—		2,033
2023	1,975		—		1,975
2024 and thereafter	6,558		—		6,558
Total amortization	$	16,665	$	222	$	16,887

Debt Obligations and Credit Facilities

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Debt Obligations and Credit Facilities

15. DEBT OBLIGATIONS AND CREDIT FACILITIES

We primarily utilize debt facilities for acquisitions and significant new business and, from time to time, for general corporate purposes. Under these facilities, debt obligations as of December 31, 2018 and 2017 were as follows:



Facility	Origination Date	Term	2018		2017
Senior Notes	March 10, 2017	5 years	$	348,054	$	347,516
EGL Revolving Credit Facility	August 16, 2018	5 years	15,000		—
Previous EGL Revolving Credit Facility	September 16, 2014	5 years	—		225,110
2018 EGL Term Loan Facility	December 27, 2018	3 years	498,485		—
2016 EGL Term Loan Facility	November 18, 2016	3 years	—		74,063
Total debt obligations			$	861,539	$	646,689

During the year ended December 31, 2018, we utilized $1,132.5 million and repaid $914.3 million under our facilities. The facilities were primarily utilized for funding acquisitions as described in Note 3 - "Acquisitions", significant new business as described in Note 4 - "Significant New Business", and investing activities.

The table below provides a summary of the total interest expense for the years ended December 31, 2018, 2017 and 2016:



	2018		2017		2016
Interest expense on debt obligations	$	25,742	$	26,035	$	20,349
Funds withheld balances and other	475		2,067		293
Total interest expense	$	26,217	$	28,102	$	20,642

Senior Notes

On March 10, 2017, we issued Senior Notes (the "Notes") for an aggregate principal amount of $350.0 million. The Notes pay 4.5% interest semi-annually and mature on March 10, 2022. The Notes are unsecured and unsubordinated obligations that rank equal to any of our other unsecured and unsubordinated obligations, senior to any future obligations that are expressly subordinated to the Notes, effectively subordinate to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinate to all liabilities of our subsidiaries.

The Notes are rated BBB- and are redeemable at our option on a make whole basis at any time prior to the date that is one month prior to the maturity of the Notes. On or after the date that is one month prior to the maturity of the Notes, the Notes are redeemable at a redemption price equal to 100% of the principal amount of the Notes to be redeemed.

We incurred costs of $2.9 million in issuing the Notes. These costs included underwriters’ fees, legal and accounting fees, and other fees, and are capitalized and presented as a direct deduction from the principal amount of debt obligations in the consolidated balance sheets. These costs are amortized over the term of the Notes and are included in interest expense in our consolidated statements of earnings. The unamortized costs as of December 31, 2018 and 2017 were $1.9 million and $2.5 million, respectively.EGL Revolving Credit Facility

On August 16, 2018, we and certain of our subsidiaries, as borrowers and guarantors, entered into a new five-year unsecured $600.0 million revolving credit agreement. The revolving credit agreement expires in August 2023 and we have the option to increase the commitments under the facility by up to an aggregate amount of $400.0 million from the existing lenders, or through the addition of new lenders subject to the terms of the agreement. Borrowings under the facility will bear interest at a rate based on the Company's long term senior unsecured debt ratings. In connection with our entry into this revolving credit agreement, we terminated and fully repaid our previous revolving credit agreement, which was originated on September 16, 2014 and was most recently amended on July 17, 2018.

As at December 31, 2018, we were permitted to borrow up to an aggregate of $600.0 million under the facility. As at December 31, 2018, there was $585.0 million of available unutilized capacity under the facility. Subsequent to December 31, 2018, we drew down $173.0 million and repaid $46.0 million, bringing the unutilized capacity under this facility to $458.0 million.

Interest is payable at least every three months at either the alternate base rate ("ABR") or LIBOR plus a margin as set forth in the revolving credit agreement. The margin could vary based upon any change in our long term senior unsecured debt rating assigned by S&P or Fitch. We also pay a commitment fee based on the average daily unutilized portion of the facility. During the existence of an event of default, the interest rate may increase and the agent may, and at the request of the required lenders shall, cancel lender commitments and demand early repayment.

Financial and business covenants imposed on us in relation to the new revolving credit facility include certain limitations on mergers and consolidations, acquisitions, indebtedness and guarantees, restrictions as to dispositions of stock and assets, and limitations on liens. Generally, the financial covenants require us to maintain a gearing ratio of consolidated indebtedness to total capitalization of not greater than 0.35 to 1.0 and to maintain a consolidated net worth of not less than the aggregate of (i) $2.3 billion, (ii) 50% of net income available for distribution to our ordinary shareholders at any time after August 16, 2018, and (iii) 50% of the proceeds of any common stock issuance made after August 16, 2018. In addition, we must maintain eligible capital in excess of the enhanced capital requirement imposed on us by the Bermuda Monetary Authority pursuant to the Insurance (Group Supervision) Rules 2011 of Bermuda. We are in compliance with the covenants of the EGL Revolving Credit Facility.

As at December 31, 2018 and December 31, 2017, there were borrowings of €nil ($nil) and €50.0 million (approximately $60.1 million), respectively, under our revolving credit facilities in effect as of such dates that were designated as non-derivative hedges of our net investment in certain subsidiaries whose functional currency is denominated in Euros. These borrowings were repaid in full during the three months ended September 30, 2018 and the non-derivative hedge was replaced by a Euro-denominated foreign currency forward exchange rate contract in a qualifying hedging arrangement. Refer to Note 7 - "Derivatives and Hedging Instruments" for more information on our derivative and non-derivative hedging instruments.2018 EGL Term Loan Facility

On December 27, 2018, we entered into and fully utilized a three-year $500.0 million unsecured term loan (the "2018 EGL Term Loan Facility"). The proceeds were partially used to fund the acquisition of Maiden Re North America. We have the option to increase the principal amount of the term loan credit facility up to an aggregate amount of $150 million from the existing lenders or through the addition of new lenders, subject to the terms of the term loan credit agreement.

Interest is payable at least every three months at either ABR or LIBOR plus a margin set forth in the term loan credit agreement. The margin could vary based upon any change in our long term senior unsecured debt rating assigned by S&P or Fitch. During the existence of an event of default, the interest rate may increase and the agent may, and at the request of the required lenders shall, demand early repayment.

Financial and business covenants imposed on us, in relation to the new term loan credit facility, include certain limitations on mergers, consolidations, acquisitions, indebtedness and guarantees, restrictions on dividends, and limitations on liens. Generally, the financial covenants require us to maintain a gearing ratio of consolidated indebtedness to total capitalization of not greater than 0.35 to 1.0 and to maintain a consolidated net worth of not less than the aggregate of (i) $2.3 billion, (ii) 50% of net income available for distribution to our ordinary shareholders at any time after August 16, 2018, and (iii) 50% of the proceeds of any common stock issuance made after August 16, 2018. In addition, we must maintain eligible capital in excess of the enhanced capital requirement imposed on us by the Bermuda Monetary Authority pursuant to the Insurance (Group Supervision) Rules 2011 of Bermuda. We are in compliance with the covenants of the 2018 EGL Term Loan Facility.

We incurred costs of $1.5 million associated with closing the 2018 EGL Term Loan Facility. These costs included bank, legal and accounting fees, and other fees, and are capitalized and presented as a direct deduction from the principal amount of debt obligations in the consolidated balance sheets. These costs are amortized over the term of the facility and are included in interest expense in our consolidated statements of earnings. The unamortized costs as of December 31, 2018 were $1.5 million.2016 EGL Term Loan FacilityOn November 18, 2016, we entered into and fully utilized a three-year $75.0 million unsecured term loan (the "2016 EGL Term Loan Facility"). We fully repaid this facility in the second quarter of 2018 and subsequently terminated it.

Noncontrolling Interest

12 Months Ended

Dec. 31, 2018

Noncontrolling Interest [Abstract]

Noncontrolling Interest

16. NONCONTROLLING INTEREST We have both redeemable noncontrolling interest and noncontrolling interest on our consolidated balance sheets. Redeemable noncontrolling interest with redemption features that are not solely within our control are classified within temporary equity in the consolidated balance sheets and carried at redemption value, which is fair value. The change in fair value is recognized through retained earnings as if the balance sheet date were also the redemption date. In addition, we also have noncontrolling interest, which does not have redemption features and is classified within equity in the consolidated balance sheets.Redeemable Noncontrolling Interest

Redeemable noncontrolling interest ("RNCI") as of December 31, 2018 and 2017 comprises the ownership interests held by Trident V Funds ("Trident") (39.3%) and Dowling Capital Partners, L.P. ("Dowling") (1.7%) in our subsidiary North Bay Holdings Limited ("North Bay"). North Bay owns our investments in Atrium and StarStone.

The following is a reconciliation of the beginning and ending carrying amount of the equity attributable to the RNCI for the years ended December 31, 2018 and 2017:



	2018			2017
Balance at beginning of year	$	479,606		$	454,522
Capital contributions	55,377			—
Dividends paid	(3,852		)	(27,458		)
Net earnings attributable to RNCI	(64,794		)	19,619
Accumulated other comprehensive income (loss) attributable to RNCI	(240		)	1,945
Change in redemption value of RNCI	(7,554		)	30,978
Balance at end of year	$	458,543		$	479,606

We carried the RNCI at its estimated redemption value, which is fair value, as of December 31, 2018. The fair value is based on tangible book value and a valuation multiple derived from a combination of comparable company market valuations, recent comparable transaction multiples and discounted cash flow models. The decrease in the fair value of the RNCI during 2018 was primarily attributable to a decrease in tangible net assets due to net losses relating to StarStone during 2018 and the distribution of Atrium dividends during the year ended December 31, 2018, which were partially offset by a capital contribution to StarStone and net earnings from Atrium. The valuation multiples did not change significantly.

Refer to Note 2 - "Significant Accounting Policies", Note 21 - "Related Party Transactions" and Note 23 - "Commitments and Contingencies" for additional information regarding RNCI.Noncontrolling InterestAs of December 31, 2018 and 2017, we had $12.1 million and $9.3 million, respectively, of noncontrolling interest ("NCI") primarily related to an external interest in two of our non-life run-off subsidiaries. A reconciliation of the beginning and ending carrying amount of the equity attributable to NCI is included in the Consolidated Statement of Changes in Shareholders Equity.

Share Capital

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Share Capital

17. SHARE CAPITAL

As at December 31, 2018 and 2017, the authorized share capital was 111,000,000 ordinary shares ("Voting Ordinary Shares") and non-voting convertible ordinary shares ("Non-Voting Ordinary Shares"), each of par value $1.00 per share, and 45,000,000 preferred shares of par value $1.00 per share.

Voting Ordinary Shares

The Voting Ordinary Shares are listed and trade on the NASDAQ Global Select Market. Each Voting Ordinary Share entitles the holder thereof to one vote. In accordance with the bye-laws, any U.S. shareholder or direct foreign shareholder group whose shares constitute 9.5% or more of the voting power of the Voting Ordinary Shares is entitled to less than one vote for each Voting Ordinary Share held by it. On May 14, 2018, 1,501,778 Voting Ordinary Shares were issued as consideration for the acquisition of KaylaRe Holdings Ltd, as described in Note 3 - "Acquisitions".Non-Voting Ordinary SharesThe Non-Voting Ordinary Shares are comprised of several different series as of December 31, 2018:•the Series A shares were canceled in June 2016 in an internal reorganization as described below.•the Series C shares were originally issued in connection with investment transactions in April and December of 2011. In addition, there were 66,520 Series C Non-Voting Ordinary Shares issued in March 2017 in connection with the exercise of warrants as described below. The Series C shares: (i) have all of the economic rights (including dividend rights) attaching to Voting Ordinary Shares but are non-voting except in certain limited circumstances; (ii) will automatically convert at a one-for-one exchange ratio (subject to adjustment for share splits, dividends, recapitalizations, consolidations or similar transactions) into Voting Ordinary Shares if the registered holder transfers them in a widely dispersed offering; (iii) may only vote on certain limited matters that would constitute a variation of class rights and as required under Bermuda law, provided that the aggregate voting power of the Series C shares with respect to any merger, consolidation or amalgamation will not exceed 0.01% of the aggregate voting power of our issued share capital; and (iv) require the registered holders’ written consent in order to vary the rights of the shares in a significant and adverse manner. During the three months ended March 31, 2017, 192,485 Series C Non-Voting Ordinary Shares were converted into Voting Ordinary Shares in a widely dispersed offering by their registered holders.•the Series B and Series D shares were created in connection with the 2011 investment transactions, but no shares in these series are issued and outstanding. Holders of the Series C shares have the right to convert such shares, on a share-for-share basis, subject to certain adjustments, into Series D shares at their option. There is no economic difference in Series B, C or D shares, but there are slight differences in the conversion rights and the limited voting rights of each series.•there were 910,010 Series E shares issued and outstanding as of December 31, 2018. There were 714,015 Series E shares originally issued and outstanding in connection with the acquisition of StarStone. During 2015, 309,244 of the previously issued and outstanding Series E shares were converted into Voting Ordinary Shares upon market sales by their registered holders constituting a widely dispersed offering. On May 14, 2018, 505,239 Series E non-voting shares were issued as consideration for the acquisition of KaylaRe Holdings Ltd, as described in Note 3 - "Acquisitions". The Series E shares have substantially the same rights as the Series C shares, except that (i) they are convertible only into Voting Ordinary Shares and (ii) they may only vote as required under Bermuda law. The Series E shares include all other Non-Voting Ordinary Shares authorized under our bye-laws but not classified as Series A, B, C or D Non-Voting Ordinary Shares.Series C Preferred SharesAs of December 31, 2018, there were 388,571 Series C Participating Non-Voting Perpetual Preferred Stock ("Series C Preferred Shares") issued and held by one of our wholly-owned subsidiaries. The Series C Preferred Shares were issued in June 2016 in an internal reorganization transaction that resulted in the cancellation of all of the Series A Shares, which had an equivalent value and were also previously held by our wholly-owned subsidiary. The Series C Preferred Shares (i) upon liquidation, dissolution or winding up of the Company, entitle their holders to a preference over holders of our ordinary voting and non-voting shares of an amount equal to $0.001 per share with respect to surplus assets and (ii) are non-voting except in certain limited circumstances. The Series C Preferred shares have dividend rights equal to those of the ordinary voting shares, subject to certain limitations and in an amount determined by a "participation rate" that is generally reflective of the reduction in the number of Series C Preferred Shares issued in exchange for the previously outstanding Series A Shares. The Series C Preferred Shares otherwise rank on parity with the ordinary voting and non-voting shares, and they rank senior to each other class or series of share capital, unless the terms of any such class or series shall expressly provide otherwise.Series D Preferred Shares

On June 28, 2018, the Company raised $400.0 million of gross proceeds through the public offering of 16,000 shares of its 7.00% non-cumulative fixed-to-floating rate Series D perpetual preferred shares ("Series D Preferred Shares") (equivalent to 16,000,000 depositary shares, each of which represents a 1/1,000th interest in a Series D Preferred Share), $1.00 par value and $25,000 liquidation preference (the "Liquidation Preference") per share (equivalent to $25.00 per depositary share). After underwriting discounts and other expenses, the Company received net proceeds of $389.2 million which was used to repay a portion of amounts outstanding under the EGL Revolving Credit Facility and repay in full the EGL Term Loan Facility. The depositary shares are listed and trade on the NASDAQ Global Select Market.

The Series D Preferred Shares are not redeemable prior to September 1, 2028, except in specified circumstances relating to certain tax, corporate, capital or rating agency events as described in the prospectus supplement relating to the offering. On and after September 1, 2028, the Series D Preferred Shares, represented by the depositary shares, will be redeemable at the Company’s option, in whole or from time to time in part, at a redemption price equal to $25,000 per Series D Preferred Share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends.Series E Preferred Shares

On November 21, 2018, the Company raised $110.0 million of gross proceeds through the public offering of 4,400 shares of its 7.00% fixed rate non-cumulative Series E perpetual preferred shares ("Series E Preferred Shares") (equivalent to 4,400,000 depositary shares, each of which represents a 1/1,000th interest in a Series E Preferred Share), $1.00 par value and $25,000 liquidation preference (the "Series E Liquidation Preference") per share (equivalent to $25.00 per depositary share). After underwriting discounts and other expenses, the Company received net proceeds of $106.1 million which was used to fund operations within our Non-life Run-off segment. The depositary shares are listed and trade on the NASDAQ Global Select Market.

The Series E Preferred Shares are not redeemable prior to March 1, 2024, except in specified circumstances relating to certain tax, corporate, capital or rating agency events as described in the prospectus supplement relating to the offering. On and after March 1, 2024, the Series D Preferred Shares, represented by the depositary shares, will be redeemable at the Company’s option, in whole or from time to time in part, at a redemption price equal to $25,000 per Series D Preferred Share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends.WarrantsAs of December 31, 2018, there were warrants outstanding to acquire 175,901 Series C Non-Voting Ordinary Shares for an exercise price of $115.00 per share, subject to certain adjustments (the "Warrants"). The Warrants were issued in April 2011 and expire in April 2021. The Warrant holder may, at its election, satisfy the exercise price of the Warrants on a cashless basis by surrender of shares otherwise issuable upon exercise of the Warrants in accordance with a formula set forth in the Warrants. During December 2016, 164,919 Warrants were exercised on a cashless basis, resulting in the issuance of 66,520 Series C Non-Voting Ordinary Shares.Dividends

There were no dividends declared or paid on our ordinary shares during the year ended December 31, 2018, 2017 or 2016.

Holders of Series D and Series E Preferred Shares are entitled to receive, only when, as and if declared, non-cumulative cash dividends, paid quarterly in arrears on the 1st day of March, June, September and December of each year, commencing on September 1, 2018 for the Series D Preferred Shares and March 1, 2019 for the Series E Preferred Shares, of 7.00% per annum. Commencing on September 1, 2028, the Series D Preferred Shares will convert to a floating rate basis and dividends will be payable on a non-cumulative basis, when, as and if declared, at three-month LIBOR plus 4.015% per annum. Dividends that are not declared will not accumulate and will not be payable.

The following table presents the dividends that have been declared and payable on our Series D and E Preferred Shares from January 1, 2018 to March 1, 2019:



				Dividend per:
Preferred Share Series	Date Declared	Record Date	Date Payable	Preferred Share		Depositary Share		Total Dividends Paid in 2018
Series D	July 31, 2018	August 15, 2018	September 1, 2018	$	320.83	$	0.32083	$	5,133
Series D	November 6, 2018	November 15, 2018	December 1, 2018	$	437.50	$	0.43750	7,000
Series D	February 21, 2019	February 15, 2019	March 1, 2019	$	437.50	$	0.43750	—
Series E	February 21, 2019	February 15, 2019	March 1, 2019	$	486.11	$	0.48611	—
								$	12,133

Any payment of dividends must be approved by our Board of Directors. Our ability to pay dividends is subject to certain restrictions, as described in Note 22 - "Dividend Restrictions and Statutory Financial Information".

Earnings Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Share

18. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016:



	2018			2017		2016
Numerator:
Net earnings (loss) from continuing operations	$	(162,354	)	$	300,465	$	252,844
Net earnings from discontinued operations, net of income taxes	—			10,993		11,963
Net earnings (loss) attributable to Enstar Group Limited	$	(162,354	)	$	311,458	$	264,807
Denominator:
Weighted-average ordinary shares outstanding — basic	20,698,310			19,388,621		19,299,426
Effect of dilutive securities:
Share-based compensation plans	129,746			62,732		48,428
Warrants	76,120			76,238		99,387
Weighted-average ordinary shares outstanding — diluted	20,904,176			19,527,591		19,447,241
Earnings per share attributable to Enstar Group Limited:
Basic:
Net earnings (loss) from continuing operations	$	(7.84	)	$	15.50	$	13.10
Net earnings from discontinued operations, net of income taxes	—			0.56		0.62
Net earnings (loss) per ordinary share	$	(7.84	)	$	16.06	$	13.72
Diluted⁽¹⁾:
Net earnings (loss) from continuing operations	$	(7.84	)	$	15.39	$	13.00
Net earnings from discontinued operations, net of income taxes	—			0.56		0.62
Net earnings (loss) per ordinary share	$	(7.84	)	$	15.95	$	13.62

⁽¹⁾During a period of loss, the basic weighted average ordinary shares outstanding is used in the denominator of the diluted loss per ordinary share computation as the effect of including potentially dilutive securities would be anti-dilutive.

Share-Based Compensation and Pensions

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation and Pensions

19. SHARE-BASED COMPENSATION AND PENSIONSShare-based compensation

Employee share awards have been granted under the 2016 and 2006 Equity Incentive Plans. The table below provides a summary of the compensation costs for share-based compensation plans for the years ended December 31, 2018, 2017 and 2016:



	2018			2017		2016
Restricted shares and restricted share units	$	7,641		$	7,302	$	2,950
Performance share units	1,968			5,832		—
Cash-settled stock appreciation rights	(3,316		)	8,875		35,626
Total share-based compensation costs	$	6,293		$	22,009	$	38,576

Restricted Shares and Restricted Share Units

Restricted shares and restricted share units are service awards that typically vest over three to four years. These awards are share-settled and are recorded in additional paid-in capital on the consolidated balance sheets. The fair value of these awards is measured at the grant date and expensed over the service period. The following table summarizes the activity related to restricted shares and restricted share awards during 2018:



	Number of Shares		Weighted-Average Share Price of Award
Nonvested — January 1	99,305		$	187.84
Granted	3,991		214.37
Vested	(42,000	)	184.38
Forfeited	(1,360	)	194.16
Nonvested — December 31	59,936		191.89

The unrecognized compensation cost related to our non-vested share awards as at December 31, 2018 was $4.7 million. This cost is expected to be recognized over the next 1.32 years, which is the weighted average contractual life of the awards.Performance Share Units ("PSUs")

PSUs are share-settled and vest on the third anniversary of the grant date. The number of shares to vest will be determined by a performance adjustment based on the change in fully diluted book value per share ("FDBVPS") over three years, based upon the following award terms:



Grant Year	PSUs Granted at Target	Nonvested Units	Change in FDBVPS (3 - year)
Grant Year	PSUs Granted at Target	As of December 31, 2018	Threshold		Target		Maximum
2017	36,321	34,878	20.00	%	30.00	%	40.00	%
2017	91,875	91,875	30.30	%	35.70	%	41.00	%
2018	39,682	32,415	25.00	%	32.50	%	40.00	%
	167,878	159,168

An increase of Target to Maximum or more in FDBVPS results in a settlement of 100% to a maximum of 150% of the units granted, respectively. An increase of Threshold to Target in FDBVPS results in a settlement of 50% to 100% of the units granted, respectively. Straight-line interpolation applies within these ranges and no settlement occurs if the increase in FDBVPS is less than the Threshold. For expense purposes we assume a Target vesting at the initial time of award. As of December 31, 2018, we revised the expected vesting level to Threshold on all PSU awards.

The following table summarizes the activity related to PSUs during 2018:



	Number of Shares		Weighted-Average Share Price of Award
Nonvested — January 1	126,753		$	188.06
Granted	39,682		200.87
Vested	(407	)	199.70
Forfeited	(6,860	)	198.55
Nonvested — December 31	159,168		190.77

The unrecognized compensation cost related to our non-vested share awards as at December 31, 2018 was $7.7 million. This cost is expected to be recognized over the next 1.64 years, which is the weighted average contractual life of the awards.Cash-Settled Stock Appreciation Rights

Cash-settled stock appreciation right awards ("SARs") give the holder the right, upon exercise, to receive in cash the difference between the market price per share of our ordinary shares at the time of exercise and the exercise price of the SARs. The exercise price of each SAR is equal to the market price of our ordinary shares on the date of the grant. Vested SARs are exercisable for periods not to exceed either 4 years or 10 years from the date of grant.

The following table summarizes the activity related to SARs during 2018:



	Number of SARs		Weighted- Average Exercise Price of SARs		Weighted Average Expected Term (in years)	Aggregate Intrinsic Value⁽¹⁾
Balance, beginning of year	310,867		$	141.30
Exercised	(201,786	)	140.72
Balance, end of year	109,081		142.37		2.88	$	3,244

⁽¹⁾The aggregate intrinsic value is calculated as the pre-tax difference between the exercise price of the underlying share awards and the closing price per share of our ordinary shares of $167.57 on December 31, 2018.

Compensation expense for SARs is based on the estimated fair value on the date of grant using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, expected term, expected dividend yield and risk-free interest rate. SARs are liability-classified awards for which compensation expense and the liability are re-measured using the then-current Black Scholes assumptions at each interim reporting date based upon the portion of the requisite service period rendered. The unrecognized compensation cost related to our SARs as at December 31, 2018 was less than $0.1 million.

The following table sets forth the assumptions used to estimate the fair value of the SARs using the Black-Scholes option valuation model as of December 31, 2018, 2017 and 2016:



	2018			2017			2016
Weighted-average fair value per SAR	$	45.85		$	75.38		$	62.39
Weighted-average volatility	18.94		%	19.44		%	19.82		%
Weighted-average risk-free interest rate	2.72		%	1.65		%	1.12		%
Dividend yield	0.00		%	0.00		%	0.00		%

Northshore Incentive Plan

Our subsidiary, Northshore, has long-term incentive plans that award time-based restricted shares of Northshore to certain Atrium employees. Shares generally vest over two to three years. These share awards have been classified as liability awards. The unrecognized compensation cost related to the Northshore incentive plan at December 31, 2018 was $4.1 million. This cost is expected to be recognized over the next 0.87 years, which is the weighted average contractual life of the awards.



	2018		2017		2016
Compensation costs	$	2,792	$	3,156	$	2,827

Deferred Compensation and Ordinary Share Plan for Non-Employee Directors

The following table summarizes the expenses related to restricted share units and the number of units outstanding for the years ended December 31, 2018, 2017 and 2016 under the Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors (the "Deferred Compensation Plan"):



	2018		2017		2016
Restricted share units expense	$	823	$	758	$	696

Restricted share units credited to the accounts of non-employee directors	3,975		3,852		4,298

Employee Share Purchase Plan

The following table summarizes the expenses related to the Employee Share Purchase Plan and the number of shares issued to employees for the years ended December 31, 2018, 2017 and 2016:



	2018		2017		2016
Compensation costs	$	430	$	403	$	306

Number of units issued to employees	14,183		12,401		12,234

Pension Plans

We provide retirement benefits to eligible employees through various plans that we sponsor. Pension expense can be affected by changes in our employee headcount. The table below summarizes the pension expenses related to our Defined Contribution Plans and our Defined Benefit Plan for the years ended December 31, 2018, 2017 and 2016.



	2018		2017		2016
Defined contribution plans	$	11,434	$	12,247	$	10,810
Defined benefit plan	2,243		1,988		2,273
Total pension expense	$	13,677	$	14,235	$	13,083

Defined Benefit PlanDuring 2018, an actuarial review was performed on the defined benefit plan, which determined that the plan’s unfunded liability, as of December 31, 2018 and 2017 was $8.4 million and $9.4 million, respectively. As of December 31, 2018 and 2017, we had an accrued liability of $8.4 million and $9.4 million, respectively, for this plan.

Income Taxation

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxation

20. INCOME TAXATION

Enstar Group Limited is incorporated under the laws of Bermuda and under Bermuda law is not required to pay taxes in Bermuda based upon income or capital gains. The Company, under the Exempted Undertakings Tax Protection Act of 1966, is protected against any legislation that may be enacted in Bermuda which would impose any tax on profits, income, or gain until March 31, 2035.

We have foreign operating subsidiaries and branch operations principally located in the United States, United Kingdom, Continental Europe and Australia that are subject to federal, foreign, state and local taxes in those jurisdictions. Deferred tax liabilities have not been accrued with respect to the undistributed earnings of our foreign subsidiaries. If the earnings were to be distributed, as dividends or other distributions, withholding taxes may be imposed by the jurisdiction of the paying subsidiary. For our U.S. subsidiaries, we have not currently accrued any withholding taxes with respect to unremitted earnings as management has indefinitely reinvested these earnings. For our United Kingdom subsidiaries, there are no withholding taxes imposed. For our other foreign subsidiaries, it would not be practicable to compute such amounts due to a variety of factors, including the amount, timing, and manner of any repatriation. Because we operate in many jurisdictions, our net earnings are subject to risk due to changing tax laws and tax rates around the world. The current, rapidly changing economic environment may increase the likelihood of substantial changes to tax laws in the jurisdictions in which we operate.

The following table presents earnings before taxes by jurisdiction from continuing operations, including earnings (loss) from equity method investments, for the years ended December 31, 2018, 2017 and 2016:



	2018			2017		2016
Domestic (Bermuda)	$	(232,743	)	$	167,263	$	191,647
Foreign	14,347			147,148		135,677
Total earnings (loss) before income tax on continuing operations	$	(218,396	)	$	314,411	$	327,324

The following table presents our current and deferred income tax expense (benefit) from continuing operations by jurisdiction for the years ended December 31, 2018, 2017 and 2016:



	2018			2017			2016
Current:
Domestic (Bermuda)	$	—		$	—		$	—
Foreign	(3,632		)	10,299			21,485
	(3,632		)	10,299			21,485
Deferred:
Domestic (Bermuda)	—			—			—
Foreign	(2,492		)	(16,694		)	13,389
	(2,492		)	(16,694		)	13,389
Total income tax expense (benefit) on continuing operations	$	(6,124	)	$	(6,395	)	$	34,874

The actual income tax rate differs from the amount computed by applying the statutory rate of 0% under Bermuda law to earnings from continuing operations before income taxes, including earnings (loss) from equity method investments for the years ended December 31, 2018, 2017 and 2016 as shown in the following reconciliation:



	2018			2017			2016
Earnings (loss) before income tax	$	(218,396	)	$	314,411		$	327,324
Bermuda income taxes at statutory rate	0.0		%	0.0		%	0.0		%
Foreign income tax rate differential	0.7		%	13.1		%	8.8		%
Change in valuation allowance	(0.3		)%	(34.9		)%	(0.1		)%
Effect of change in foreign (U.S.) tax rate	—		%	20.3		%	—		%
U.S. base erosion and anti-abuse tax	(0.6		)%	—		%	—		%
Other	3.0		%	(0.5		)%	2.0		%
Effective tax rate	2.8		%	(2.0		)%	10.7		%

Our effective tax rate is generally driven by the geographical distribution of our pre-tax net earnings between our taxable and non-taxable jurisdictions.Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities reflect the tax effect of the differences between the financial reporting and income tax bases of assets and liabilities. Significant components of the deferred tax assets and deferred tax liabilities related to our continuing operations as of December 31, 2018 and 2017 were as follows:



	2018			2017
Deferred tax assets:
Net operating loss carryforwards	$	183,633		$	177,695
Insurance reserves	18,677			9,082
Unearned premiums	11,314			1,690
Lloyd's underwriting losses taxable in future periods	6,201			9,131
Provisions for bad debt	2,594			6,371
Unrealized losses on investments	5,160			—
Other deferred tax assets	183			1,944
Gross deferred tax assets	227,762			205,913
Valuation allowance	(212,113		)	(188,300		)
Deferred tax assets	15,649			17,613
Deferred tax liabilities:
Unrealized gains on investments	—			(3,798		)
Other deferred tax liabilities	(16,067		)	(16,076		)
Deferred tax liabilities	(16,067		)	(19,874		)
Net deferred tax liability	$	(418	)	$	(2,261	)

Net Deferred Tax Liability balance for continuing operations by major jurisdiction:



	December 31,
	2018			2017
	Net Deferred Tax Liability			Net Deferred Tax Liability
United States	$	5,151		$	4,947
United Kingdom	(8,377		)	(5,150		)
Other	2,808			(2,058		)
Total	$	(418	)	$	(2,261	)

As of December 31, 2018, we had net operating loss carryforwards that could be available to offset future taxable income, as follows:



Tax Jurisdiction	Loss Carryforwards		Tax effect		Expiration
Operating and Capital Loss Carryforwards:
United States - Net operating loss	$	522,116	$	109,644	2030-2038
United States - Capital loss	15,160		3,191		2021-2023
United Kingdom	248,448		47,205		None
Other	96,418		23,593		None

The U.S. net operating loss carryforwards are also subject to certain utilization limitations based upon their nature and the specific legal entity that holds them.Assessment of Valuation Allowance on Deferred Tax Assets

As of December 31, 2018 and 2017, we had deferred tax asset valuation allowances of $212.1 million and $188.3 million, respectively, related to foreign subsidiaries. We recorded an increase of $23.8 million in our deferred tax valuation allowance for continuing operations during 2018. The deferred tax asset valuation allowances increased primarily due to deferred tax assets acquired during the year.

The realization of deferred tax assets is dependent on generating sufficient taxable income in future periods in which the tax benefits are deductible or creditable. The amount of the deferred tax asset considered realizable, however, could be revised in the future if estimates of future taxable income change. Taxes are determined and assessed jurisdictionally by legal entity or by filing group. Certain jurisdictions require or allow combined or consolidated tax filings. We have estimated future taxable income of our foreign subsidiaries and provided a valuation allowance in respect of those assets where we do not expect to realize a benefit. We have considered all available evidence using a “more likely than not” standard in determining the amount of the valuation allowance. We considered the following evidence: (i) net earnings or losses in recent years; (ii) the future sustainability and likelihood of positive net earnings of our subsidiaries; (iii) the carryforward periods of tax losses including the effect of reversing temporary differences; and (iv) tax planning strategies, in making our determination. The assumptions used in determining future taxable income require significant judgment and any changes in these assumptions could have an impact on earnings.Uncertainty in Income Taxes

During the years ended December 31, 2018, 2017 and 2016, there were no unrecognized tax benefits. There were no accruals for the payment of interest and penalties related to unrecognized tax benefits as at December 31, 2018, 2017 and 2016.

Our operating subsidiaries may be subject to audit by various tax authorities and may have different statutes of limitations expiration dates. Tax authorities may propose adjustments to our income taxes. Listed below are the tax years that remain subject to examination by a major tax jurisdiction as of December 31, 2018:



Major Tax Jurisdiction					Open Tax Years
United States					2015-2018
United Kingdom					2015-2018
Australia					2013-2018

Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions

21. RELATED PARTY TRANSACTIONSStone Point Capital LLCThrough several private transactions occurring from May 2012 to July 2012 and an additional private transaction that closed in May 2018, investment funds managed by Stone Point Capital LLC ("Stone Point") have acquired an aggregate of 1,635,986 of our Voting Ordinary Shares (which now constitutes approximately 9.1% of our outstanding Voting Ordinary Shares). On November 6, 2013, we appointed James D. Carey to our Board of Directors. Mr. Carey is the sole member of an entity that is one of four general partners of the entities serving as general partners for Trident, is a member of the investment committees of such general partners, and is a member and senior principal of Stone Point, the manager of the Trident funds.

In addition, we have entered into certain agreements with Trident with respect to Trident’s co-investments in the Atrium, Arden, and StarStone acquisitions. These include investors’ agreements and shareholders’ agreements, which provide for, among other things: (i) our right to redeem Trident’s equity interest in the Atrium/Arden and StarStone transactions in cash at fair market value within the 90 days following September 6, 2018 and April 1, 2019, respectively, and at any time following September 6, 2020 and April 1, 2021, respectively; and (ii) Trident’s right to have its equity co-investment interests in the Atrium/Arden and StarStone transactions redeemed by us at fair market value (which we may satisfy in either cash or our ordinary shares) following September 6, 2020 and April 1, 2021, respectively. We did not exercise our right to redeem Trident's equity interest in Atrium/Arden during the 90 days following September 6, 2018. Pursuant to the terms of the shareholders’ agreements, Mr. Carey serves as a Trident representative on the boards of the holding companies, including North Bay Holdings Limited ("North Bay"), established in connection with the Atrium/Arden and StarStone co-investment transactions. Trident also has a second representative on these boards who is a Stone Point employee.

On December 26, 2018, the shareholders of North Bay completed a transaction to provide capital support to StarStone in the form of a contribution to its contributed surplus account and a loss portfolio transfer of certain discontinued and discontinuing lines of business. To fund the transaction, the North Bay shareholders contributed an aggregate amount of $135.0 million to North Bay in proportion to their ownership interests. Trident’s proportionate contribution of $53.1 million was temporarily funded by North Bay and is expected to be reimbursed in the first quarter of 2019, subject to the terms and conditions of the reimbursement agreement executed by the parties.

As at December 31, 2018 and December 31, 2017, the RNCI on our balance sheet relating to these Trident co-investment transactions was as follows:



	2018		2017
Redeemable Noncontrolling Interest	$	439,428	$	459,613

As of December 31, 2018, we had the following additional relationships with Stone Point and its affiliates:


•	Investments in funds (carried within other investments) managed by Stone Point, with respect to which we recognized unrealized gains and interest income;


•	Investments in registered investment companies affiliated with entities owned by Trident or otherwise affiliated with Stone Point, with respect to which we recognized unrealized gains and interest income;


•	Separate accounts managed by Eagle Point Credit Management and PRIMA Capital Advisors, which are affiliates of entities owned by Trident, with respect to which we incurred management fees;


•	Investments in funds (carried within other investments) managed by Sound Point Capital, an entity in which Mr. Carey has an indirect minority ownership interest and serves as a director, with respect to which we recognized net unrealized gains;


•	Sound Point Capital has acted as collateral manager for certain of our direct investments in CLO equity securities, with respect to which we recognized net unrealized gains (losses) and interest income; and


•	A separate account managed by Sound Point Capital, with respect to which we incurred management fees.

In the fourth quarter of 2018, we invested $25.0 million in Mitchell International, a claims software provider for workers' compensation and auto insurance business, as a co-investor alongside Stone Point.The following table presents the amounts included in our consolidated balance sheet as of December 31, 2018 and 2017, related to our related party transactions with Stone Point and its affiliated entities:



	2018		2017
Investments in funds managed by Stone Point	$	422,771	$	255,905
Investments in registered investment companies affiliated with entities owned by Trident	32,302		22,060
Investments managed by Eagle Point Credit Management and PRIMA Capital Advisors	176,624		183,448
Investments in funds managed by Sound Point Capital	29,922		27,429
Investments in CLO equity securities with Sound Point Capital as collateral manager	13,449		17,760
Separate account managed by Sound Point Capital	1,079		63,572

The following table presents the amounts included in net earnings for the years ended December 31, 2018, 2017 and 2016, related to our related party transactions with Stone Point and its affiliated entities:



	2018			2017			2016
Net unrealized gains on funds managed by Stone Point	$	1,074		$	22,259		17,271
Net unrealized gains on registered investment companies affiliated with entities owned by Trident or Stone Point	3,886			2,878			377
Interest income on registered investment companies affiliated with entities owned by Trident	3,273			2,478			3,099
Management fees on investments managed by Eagle Point Credit Management and PRIMA Capital Advisors	(486		)	(480		)	(469		)
Net unrealized gains (losses) on investments in funds managed by Sound Point Capital	(442		)	2,043			1,901
Net unrealized losses on investments in CLO equity securities with Sound Point Capital as collateral manager	(4,311		)	(2,496		)	2,086
Interest income on investments in CLO equity securities with Sound Point Capital as collateral manager	4,811			4,292			6,739
Management fees on separate account managed by Sound Point Capital	(174		)	(300		)	(275		)
Total net earnings	$	7,631		$	30,674		$	30,729

KaylaReOn May 14, 2018, the Company completed a transaction to acquire all of the outstanding shares and warrants of KaylaRe, following the receipt of all required regulatory approvals. In consideration for the acquired shares and warrants of KaylaRe, the Company issued an aggregate of 2,007,017 ordinary shares, comprising 1,501,778 voting ordinary shares and 505,239 Series E non-voting ordinary shares to the shareholders of KaylaRe as follows: (i) 1,204,353 voting ordinary shares and 505,239 Series E Shares to a fund managed by Hillhouse Capital Management, Ltd. (together with its affiliates, “Hillhouse Capital”); (ii) 285,986 voting ordinary shares to Trident; and (iii) 11,439 voting ordinary shares to the minority shareholder. In addition, the Shareholders Agreement between Enstar and the other KaylaRe shareholders was effectively terminated. Effective May 14, 2018 we consolidated KaylaRe into our consolidated financial statements and any balances between KaylaRe and Enstar are now eliminated upon consolidation. Refer to Note 2 - "Acquisitions" for additional information.On December 15, 2016, KaylaRe completed an initial capital raise of $620.0 million. We originally owned approximately 48.2% of KaylaRe's common shares and recorded our investment in KaylaRe using the equity method basis of accounting, pursuant to the conclusion that we were not required to consolidate following an analysis based on the guidance in ASC 810 - Consolidation. Our investment in the common shares and warrants of KaylaRe was carried at $320.1 million and $309.8 million in other assets on our consolidated balance sheet as at May 14, 2018 and December 31, 2017, respectively.Our subsidiary, Enstar Limited, acts as insurance and reinsurance manager to KaylaRe's subsidiary, KaylaRe Ltd., for which it receives fee income. Affiliates of Enstar have also entered into various reinsurance agreements with KaylaRe Ltd. We provide administrative services to KaylaRe and KaylaRe Ltd.

Through a Quota Share Agreement dated December 15, 2016 (the "KaylaRe-StarStone QS"), several of our StarStone affiliates entered into a Quota Share Treaty with KaylaRe Ltd. pursuant to which KaylaRe Ltd. reinsures 35% of all business written by these StarStone affiliates for risks attaching from January 1, 2016, net of the StarStone affiliates’ external reinsurance programs. The reinsurance of StarStone's U.S. and U.K. affiliates was non-renewed as of January 1, 2018 and January 1, 2019, respectively.

In addition, Fitzwilliam Insurance Limited ("Fitzwilliam"), one of our non-life run-off subsidiaries, ceded $177.2 million of loss reserves to KaylaRe Ltd. in 2016, on a funds held basis. Under the terms of this reinsurance agreement, Fitzwilliam is entitled to receive a profit commission calculated with reference to reserve savings made during the term of this agreement. Our Non-life Run-off subsidiaries did not cede any new business to KaylaRe Ltd. during years ended December 31, 2018 and 2017.Our consolidated balance sheets as of December 31, 2017 included the following balances related to transactions between us and KaylaRe and KaylaRe Ltd.:



	2017
Reinsurance balances recoverable on paid and unpaid losses	$	357,355
Prepaid reinsurance premiums	116,356
Funds held	174,181
Insurance and reinsurance balances payable	232,884
Ceded acquisition costs	36,070

Our consolidated statement of earnings for the years ended December 31, 2018, 2017 and 2016 included the following balances related to transactions between us and KaylaRe and KaylaRe Ltd. up until May 14, 2018, the date of acquisition:



	2018			2017			2016
Fee income due to Enstar Limited	$	1,453		$	2,679		$	6,799

Transactions under KaylaRe-StarStone QS:
Ceded premium earned	(52,651		)	(234,079		)	(117,561		)
Net incurred losses	31,654			155,433			75,659
Acquisition costs	18,774			99,500			42,516

Transactions under Fitzwilliam reinsurance agreement:
Profit Commission	—			18,843			7,055

Total net earnings (loss)	$	(770	)	$	42,376		$	14,468

HillhouseInvestment funds managed by Hillhouse Capital collectively own approximately 9.7% of Enstar’s voting ordinary shares. These funds also own non-voting ordinary shares and warrants to purchase additional non-voting ordinary shares, which together with their voting ordinary shares, represent an approximate 17.1% economic interest in Enstar. In February 2017, Jie Liu, a Partner of Hillhouse Capital, was appointed to our Board.As of December 31, 2017, KaylaRe had investments in a fund managed by Hillhouse Capital. On May 14, 2018 KaylaRe was acquired (refer to Note 3 - "Acquisitions" for further details), at which point KaylaRe was consolidated and KaylaRe's investment in Hillhouse InRe Fund, L.P. ("InRe Fund") was recorded within other investments on our consolidated balance sheet. As of December 31, 2018, Enhanzed Re had investments in a fund managed by Hillhouse Capital, as described below. As of December 31, 2018, our carrying value of the InRe Fund was $678.4 million and the fund was invested in approximately 35% in fixed income securities, 15% in North American equities, 55% in international equities and (5)% in financing, derivatives and other items.Our consolidated balance sheet as of December 31, 2018 and 2017 included the following balances related to transactions between us and Hillhouse and its affiliated entities:



	2018			2017
Investments in funds managed by Hillhouse Capital, held by equity method investees	$	75,192		$	456,660
Our ownership of equity method investments	47.4		%	48.2		%
Our indirect investment in funds managed by Hillhouse Capital	$	35,641		$	220,247

Investment in funds managed by Hillhouse Capital:
InRe Fund	$	678,420		$	—
Other funds	166,646			—
	$	845,066		$	—

The increase in the investment in funds managed by Hillhouse was primarily due to consolidation of the InRe Fund, which was previously held by KaylaRe, our equity method investment, and additional subscriptions of $445.5 million, partially offset by net unrealized losses on the investments.

We incurred fees of approximately $8.2 million, included within net unrealized gains (losses), for the year ended December 31, 2018 to Hillhouse and its affiliated entities in relation to the management of the funds described above.MonumentMonument was established in October 2016 and Enstar has invested a total of $26.6 million in the common and preferred shares of Monument. We have approximately a 26.6% interest in Monument. In connection with our investment in Monument, we entered into a Shareholders Agreement with the other shareholders. We recorded the investment in Monument using the equity method basis of accounting, as we concluded that we are not required to consolidate based on the guidance in ASC 810 - Consolidation.

On August 29, 2017, we sold our wholly-owned subsidiary, Laguna, to a subsidiary of Monument for a total consideration of €25.6 million (approximately $30.8 million). The total loss recorded on the sale of Laguna, for the year ended December 31, 2017 was $16.3 million, which has been included in earnings from continuing operations before taxes in our consolidated statement of earnings. This loss includes a cumulative currency translation adjustment balance of $6.3 million, which has been reclassified from accumulated other comprehensive income and included in earnings as a component of the loss on sale of Laguna during the year ended December 31, 2017, following the closing of the sale.

On October 10, 2018, we entered into a Business Transfer Agreement between our wholly-owned subsidiary Alpha and a subsidiary of Monument. This agreement will transfer life assurance policies written by Alpha to Monument via a Portfolio Transfer, which is subject to regulatory approval. The transaction is expected to close during 2019.Our investment in the common and preferred shares of Monument, carried in equity method investments on our consolidated balance sheet, as of December 31, 2018 and 2017 was as follows:



	2018		2017
Investment in Monument	$	42,193	$	15,960

Clear Spring (formerly SeaBright)

On January 1, 2017 we sold SeaBright Insurance Company (“SeaBright Insurance”) and its licenses to Delaware Life Insurance Company ("Delaware Life"). Following the sale, SeaBright Insurance was renamed Clear Spring Property and Casualty Company (“Clear Spring”). Clear Spring was subsequently capitalized with $56.0 million of equity, with Enstar retaining a 20% indirect equity interest in Clear Spring.

We have recorded the investment in Clear Spring using the equity method basis of accounting, pursuant to the conclusion that we are not required to consolidate following an analysis based on the guidance in ASC 810 - Consolidation. Our investment in the common shares of Clear Spring, carried in equity method investments on our consolidated balance sheet, as of December 31, 2018 and 2017 was as follows:



	2018		2017
Investment in Clear Spring	$	10,070	$	10,596

Effective January 1, 2017, StarStone National Insurance Company (“StarStone National”) entered into a ceding quota share treaty with Clear Spring pursuant to which Clear Spring reinsures 33.3% of core workers' compensation business written by StarStone National. This agreement was terminated as of December 31, 2018.Effective January 1, 2017, we also entered into an assuming quota share treaty with Clear Spring pursuant to which an Enstar subsidiary reinsures 25% of all workers' compensation business written by Clear Spring. This is recorded as other activities.Our consolidated balance sheet as at December 31, 2018 and 2017 included the following balances between us and Clear Spring:



	2018		2017
Balances under StarStone ceding quota share:
Reinsurance balances recoverable on paid and unpaid losses	$	23,718	$	9,053
Prepaid insurance premiums	13,821		13,747
Ceded payable	14,153		13,964
Ceded acquisition costs	3,233		3,186

Balances under assuming quota share:
Losses and LAE	5,778		2,231
Unearned reinsurance premiums	3,455		3,437
Funds held	10,242		5,095

Our consolidated statement of earnings for the years ended December 31, 2018 and 2017 included the following amounts between us and Clear Spring:



	2018			2017
Amounts under StarStone ceding quota share:
Ceded premium earned	$	(29,520	)	$	(14,256	)
Net incurred losses and LAE	18,143			9,533
Acquisition costs	7,035			6,718

Amounts under assuming quota share:
Premium earned	7,380			3,564
Net incurred losses and LAE	(4,536		)	(1,181		)
Acquisition costs	(1,836		)	(1,753		)

Total net earnings (loss)	$	(3,334	)	$	2,625

AmTrustIn November 2018, pursuant to a Subscription Agreement with Evergreen Parent L.P. ("Evergreen"), K-Z Evergreen, LLC and Trident Pine Acquisition LP ("Trident Pine"), we purchased equity in Evergreen in the aggregate amount of $200.0 million. Evergreen is an entity formed by private equity funds managed by Stone Point and the Karfunkel-Zyskind family that acquired the approximately 45% of the issued and outstanding shares of common stock of AmTrust Financial Services, Inc. ("AmTrust") that the Karfunkel-Zyskind Family and certain of its affiliates and related parties did not already own or control. The equity interest was in the form of three separate classes of equity securities issued at the same price and in the same proportion as the equity interest purchased by Trident Pine. Following the closing of the transaction, Enstar owns approximately 7.5% of the equity interest in Evergreen and Trident Pine owns approximately 21.8%. Evergreen owns all of the equity interest in AmTrust. In addition, upon the successful closing of the transaction we received a fee of $3.5 million, half of which was payable upon closing and the other on the first anniversary of the closing. The fee has been recorded in full in other income within our consolidated statements of earnings for the year ended December 31, 2018.Our indirect investment in the shares of AmTrust, carried in equities on our consolidated balance sheet, as of December 31, 2018 was as follows:



	2018
Investment in AmTrust	$	200,000

During the year ended December 31, 2018 we recorded net investment income of $0.3 million related to our indirect equity investment in AmTrust.CitcoIn June 2018, our subsidiary made a $50.0 million indirect investment in the shares of Citco III Limited ("Citco"), a fund administrator with global operations. Pursuant to an investment agreement and in consideration for participation therein, a related party of Hillhouse Capital provided investment support to our subsidiary. In a private transaction that preceded our co-investment opportunity, certain Citco shareholders, including Trident, agreed to sell all or a portion of their interests in Citco. As of December 31, 2018, Trident owned an approximate 3.4% interest in Citco. Mr. Carey currently serves as an observer to the board of directors of Citco in connection with Trident's investment therein.Our indirect investment in the shares of Citco, carried in equity method investments on our consolidated balance sheet, as of December 31, 2018 was as follows:



	2018
Investment in Citco	50,812

Enhanzed ReEnhanzed Reinsurance Ltd. ("Enhanzed Re") is a joint venture between Enstar, Allianz SE and Hillhouse Capital that was capitalized in December 2018. Enhanzed Re is a Bermuda-based Class 4 and Class E reinsurer and will reinsure life, non-life run-off, and property and casualty insurance business, initially sourced from Allianz SE and Enstar. Enstar, Allianz and Hillhouse Capital affiliates have made equity investment commitments in aggregate of $470.0 million to Enhanzed Re. Enstar owns 47.4% of the entity, Allianz owns 24.9%, and an affiliate of Hillhouse Capital owns 27.7%. As of December 31, 2018, Enstar contributed $94.8 million of its total capital commitment to Enhanzed Re and an uncalled amount of $128.0 million.Enstar acts as the (re)insurance manager for Enhanzed Re, Hillhouse Capital acts as primary investment manager, and an affiliate of Allianz SE provides investment management services. Enhanzed Re intends to write business from affiliates of its operating sponsors, Allianz SE and Enstar. It will seek to underwrite business to maximize diversification by risk and geography.Our investment in the common shares of Enhanzed Re, carried in equity method investments on our consolidated balance sheet, as of December 31, 2018 was as follows:



	2018
Investment in EnhanzedRe	$	94,800

There were no transactions between us and Enhanzed Re in the year ended December 31, 2018.

Dividend Restrictions and Statutory Financial Information

12 Months Ended

Dec. 31, 2018

Insurance [Abstract]

Dividend Restrictions and Statutory Financial Information

22. DIVIDEND RESTRICTIONS AND STATUTORY FINANCIAL INFORMATIONParent Company Dividend Restrictions

There were no significant restrictions on the Parent Company's ability to pay dividends from retained earnings as at December 31, 2018. Bermuda law permits the payment of dividends if (i) we are not, or would not be after payment, unable to pay our liabilities as they become due and (ii) the realizable value of our assets is in excess of our liabilities after taking such payment into account. We have not historically declared a dividend on our ordinary shares. The issuance of our Series D and E Preferred Shares have resulted in the declaration of dividends. Holders of Series D and Series E Preferred Shares are entitled to receive, only when, as and if declared, non-cumulative cash dividends, paid quarterly in arrears on the 1st day of March, June, September and December of each year of 7.0% per annum. Refer to Note 17 - "Share Capital" for details regarding dividends on preferred shares.

The Bermuda Monetary Authority ("BMA") acts as group supervisor to Enstar. On an annual basis, we are required to file group statutory financial statements, a group statutory financial return, a group capital and solvency return, audited group financial statements and a Group Solvency Self-Assessment ("GSSA") with the BMA. The GSSA is designed to document our perspective on the capital resources necessary to achieve our business strategies and remain solvent, and to provide the BMA with insights on our risk management, governance procedures and documentation related to this process. We are required to maintain available group statutory capital and surplus in an amount that is at least equal to the group enhanced capital requirement ("Group ECR"). The BMA has also established a group target capital level equal to 120% of the Group ECR. We are in compliance with these requirements.

Our ability to pay dividends to our shareholders is dependent upon the ability of our insurance and reinsurance subsidiaries to distribute capital and pay dividends to us. Our insurance and reinsurance subsidiaries are subject to certain regulatory restrictions on the distribution of capital and payment of dividends in the jurisdictions in which they operate, as described below. The restrictions are generally based on net income or levels of capital and surplus as determined in accordance with the relevant statutory accounting practices. Failure of these subsidiaries to meet their applicable regulatory requirements could result in restrictions on any distributions of capital or retained earnings or stricter regulatory oversight of the subsidiaries.

Our ability to pay dividends and make other forms of distributions may also be limited by repayment obligations and financial covenants in our outstanding loan facility agreements.Subsidiary Statutory Financial Information and Dividend Restrictions

Our insurance and reinsurance subsidiaries prepare their statutory financial statements in accordance with statutory accounting practices prescribed or permitted by local regulators. Statutory accounting differs from U.S. GAAP, including in the treatment of investments, acquisition costs and deferred income taxes, amongst other items.

The statutory capital and surplus amounts for the years ended December 31, 2018 and 2017 and statutory net income amounts for the years ended December 31, 2018, 2017 and 2016 for our insurance and reinsurance subsidiaries based in Bermuda, the United Kingdom, Australia, the United States and Continental Europe are summarized in the table below which includes information relating to acquisitions from the year of acquisition:



	Statutory Capital and Surplus
	Required				Actual				Statutory Income
	2018		2017		2018		2017		2018			2017			2016
Bermuda	$	1,591,991	$	1,556,644	$	3,701,825	$	2,802,653	$	29,486		$	390,752		$	339,548
U.K.	654,721		453,160		715,448		699,798		(52,936		)	77,900			131,619
U.S.	392,394		195,855		660,470		589,029		(75,005		)	(5,065		)	(1,439		)
Europe	239,582		253,981		431,863		444,870		(17,611		)	(4,245		)	31,075
Australia	22,535		12,521		26,882		27,672		1,761			(874		)	701

As at December 31, 2018, the total amount of net assets of our consolidated subsidiaries that were restricted was $2.9 billion.

Certain material aspects of these laws and regulations as they relate to solvency, dividends and capital and surplus are summarized below.Bermuda

Our Bermuda-based insurance and reinsurance subsidiaries are registered under the Insurance Act 1978 of Bermuda and related regulations, as amended (the "Insurance Act"). The Insurance Act imposes certain solvency and liquidity standards and auditing and reporting requirements and grants the BMA powers to supervise, investigate, require information and the production of documents and intervene in the affairs of insurance companies.

The Insurance Act requires that our Bermuda-based insurance and reinsurance subsidiaries maintain certain solvency and liquidity standards. The minimum liquidity ratio requires that the value of relevant assets not be less than 75% of the amount of relevant liabilities. The minimum solvency margin, which varies depending on the class of the insurer, is determined as a percentage of either net reserves for losses and LAE or premiums or pursuant to a risk-based capital measure. Our Bermuda subsidiaries with commercial insurance licenses are required to maintain a minimum statutory capital and surplus (Enhanced Capital Requirement or "ECR") at least equal to the greater of a minimum solvency margin or the Bermuda Solvency Capital Requirement ("BSCR"). The BSCR is calculated based on a standardized risk-based capital model.

Each of our regulated Bermuda insurance and reinsurance subsidiaries would be prohibited from declaring or paying any dividends if it were in breach of their minimum solvency margin (which is a function of outstanding losses) or liquidity ratio (which is a function of relevant assets) or if the declaration or payment of such dividends would cause it to fail to meet such margin or ratio. In addition, each of our regulated Bermuda insurance and reinsurance subsidiaries is prohibited, without the prior approval of the BMA, from reducing by 15% or more its total statutory capital as set out in its previous year’s statutory financial statements. Our Bermuda insurance companies that manage portfolios in run-off are required to seek regulatory approval for any dividends or distributions.

As of December 31, 2018 and 2017, each of our Bermuda-based insurance and reinsurance subsidiaries exceeded their respective minimum solvency and liquidity requirements. The Bermuda insurance and reinsurance subsidiaries in aggregate exceeded minimum solvency requirements by $2.1 billion as of December 31, 2018 (2017: $1.2 billion) and were in compliance with their liquidity requirements.United KingdomU.K. Insurance Companies (non-Lloyd's)

Our U.K. based insurance subsidiaries are regulated by the U.K. Prudential Regulatory Authority (the "PRA") and the Financial Conduct Authority (the "FCA", together with the PRA, the "U.K. Regulator").

Our U.K.-based insurance subsidiaries are required to maintain adequate financial resources in accordance with the requirements of the U.K. Regulator. Insurers must comply with a Solvency Capital Requirement ("SCR"), which is calculated using either the Solvency II standard formula or a bespoke internal model. Our non-Lloyd's U.K. companies use the standard formula.

The calculation of the minimum capital resources requirements in any particular case depends on, among other things, the type and amount of insurance business written and claims paid by the insurance company. As at December 31, 2018 and 2017, all of our U.K. insurance subsidiaries maintained capital in excess of the minimum capital resources requirements and complied with the relevant U.K. Regulator requirements. The U.K.-based insurance subsidiaries, in aggregate, maintained capital in excess of the minimum capital resources requirements by $60.7 million and $246.6 million as of December 31, 2018 and 2017, respectively.

The U.K. Regulator’s rules require our U.K. insurance subsidiaries to obtain regulatory approval for any proposed or actual payment of a dividend. The U.K. Regulator uses the SCR, among other tests, when assessing requests to make distributions.Lloyd’s

As of December 31, 2018, we participated in the Lloyd’s market through our interests in: (i) Atrium’s Syndicate 609, which is managed by Atrium Underwriters Limited, a Lloyd's managing agent, and the Atrium corporate member; (ii) StarStone’s Syndicate 1301, which is managed by StarStone Underwriting Limited ("SUL"), a Lloyd’s managing agent, and the StarStone corporate member; and (iii) Syndicate 2008, a wholly aligned syndicate that has permission to underwrite RITC business and other run-off or discontinued business type transactions with other Lloyd’s syndicates, and its corporate member. During 2015, SUL assumed the role of managing agent for Syndicate 2008 in place of Shelbourne Syndicate Services Limited as we streamlined our organizational structure and combined Shelbourne and StarStone resources into one agency. For the 2018 underwriting year, participation in all three syndicates has been through a common corporate member.

The underwriting capacity of a member of Lloyd’s is supported by providing Funds at Lloyd’s, as described in Note 6 - "Investments". Business plans, including maximum underwriting capacity, for Lloyd’s syndicates requires annual approval by the Lloyd’s Franchise Board, which may require changes to any business plan or additional capital to support underwriting plans.

The Lloyd’s market has applied the Solvency II internal model under Lloyd’s supervision, and our Lloyd’s operations are required to meet Solvency II standards. Lloyd's has the approval of the PRA to use its internal model under the Solvency II regime.United States

Our U.S. non-life run-off and active underwriting insurance and reinsurance subsidiaries are subject to the insurance laws and regulations of the states in which they are domiciled, licensed and/or eligible to conduct business. These laws restrict the amount of dividends the subsidiaries can pay to us. The restrictions are generally based on statutory net income and/or certain levels of statutory surplus as determined in accordance with the relevant statutory accounting requirements of the individual domiciliary states or states in which any of the insurance or reinsurance subsidiaries are domiciled. Generally, prior regulatory approval must be obtained before an insurer may pay a dividend or make a distribution above a specified level.

The U.S. insurance and reinsurance subsidiaries are also required to maintain minimum levels of solvency and liquidity as determined by law, and to comply with Risk-Based Capital ("RBC") requirements and licensing rules as specified by the National Association of Insurance Commissioners ("NAIC"). RBC is used to evaluate the adequacy of capital and surplus maintained by our life company in relation to risks associated with: (i) asset risk; (ii) insurance risk; (iii) interest rate risk and (iv) business risk. For all of our U.S. insurance and reinsurance subsidiaries, with the exception of one subsidiary which has a permitted accounting practice to treat an adverse development cover reinsurance agreement as prospective reinsurance, there are no prescribed or permitted statutory accounting practices that differ significantly from the statutory accounting principles established by NAIC.

As of December 31, 2018, all of our U.S. non-life insurance and reinsurance subsidiaries exceeded their required levels of risk-based capital. On an aggregate basis, our U.S. non-life insurance and reinsurance subsidiaries exceeded their minimum levels of risk-based capital as of December 31, 2018 by $359.6 million (December 31, 2017: $385.4 million).Europe

Harper Insurance Limited, is regulated by the Swiss Financial Market Supervisory Authority ("FINMA") pursuant to the Insurance Supervisory Act 2004. This subsidiary is obligated to maintain a minimum solvency margin based on the Swiss Solvency Test regulations ("SST") as stipulated by the Insurance Supervisory Act. From January 1, 2016, Switzerland was granted full Solvency II equivalence by the European Commission. As of December 31, 2018 and 2017, this subsidiary exceeded the SST requirements by $58.0 million (2017: $44.0 million). The amount of dividends that this subsidiary is permitted to distribute is restricted to freely distributable reserves, which consist of retained earnings, the current year profit and legal reserves. Any dividend exceeding the current year profit requires FINMA’s approval. The solvency and capital requirements must continue to be met following any distribution. With effect from January 1, 2019, Harper Insurance Limited redomesticated to Bermuda and is now regulated by the BMA.

Our Liechtenstein insurance subsidiary (StarStone Insurance SE) is regulated by the Liechtenstein Financial Market Authority ("FMA") pursuant to the Liechtenstein Insurance Supervisory Act. This subsidiary is obligated to maintain a minimum solvency margin based on the Solvency II regulations. As of December 31, 2018, this subsidiary exceeded the Solvency II requirements by $133.9 million (2017: $146.8 million). The amount of dividends that this subsidiary is permitted to distribute is restricted to freely distributable reserves, which consist of retained earnings, the current year profit and legal reserves. Any dividend exceeding the current year profit requires the FMA’s approval. Solvency and capital requirements for this subsidiary are based on the Solvency II framework and must continue to be met following any distribution.

Our Belgian life insurance subsidiary files financial statements and returns with the National Bank of Belgium. This subsidiary was in compliance with its solvency and capital requirements under Solvency II.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

23. COMMITMENTS AND CONTINGENCIESConcentration of Credit Risk

We believe that there are no significant concentrations of credit risk associated with our cash and cash equivalents, fixed maturity investments, or other investments. Cash, cash equivalents and fixed maturity investments are managed pursuant to guidelines that follow prudent standards of diversification and limit the allowable holdings of a single issue and issuers. Other investments are managed pursuant to guidelines that emphasize diversification and liquidity. Pursuant to these guidelines, we manage and monitor risk across a variety of investment funds and vehicles, markets and counterparties. We are also subject to custodial credit risk on our investments, which we manage by diversifying our holdings amongst large financial institutions that are highly regulated.

We have exposure to credit risk on certain of our assets pledged to ceding companies under insurance contracts. In addition, we are potentially exposed should any insurance intermediaries be unable to fulfill their contractual obligations with respect to payments of balances owed to and by us.

Credit risk exists in relation to our insurance and reinsurance balances recoverable on paid and unpaid losses. We remain liable to the extent that counterparties do not meet their contractual obligations and, therefore, we evaluate and monitor concentration of credit risk among our insurers and reinsurers. Amounts recoverable from reinsurers are described Note 8 - "Reinsurance Balances Recoverable on Paid and Unpaid Losses".

We are also subject to credit risk in relation to funds held by reinsured companies. Under funds held arrangements, the reinsured company has retained funds that would otherwise have been remitted to our reinsurance subsidiaries. The funds may be placed into trust or subject to other security arrangements. The funds balance is credited with investment income and losses payable are deducted. We are subject to credit risk if the reinsured company is unable to honor the value of the funds held balances, such as in the event of insolvency. However, we generally have the contractual ability to offset any shortfall in the payment of the funds held balances with amounts owed by us to the reinsured for losses payable and other amounts contractually due. We routinely monitor the creditworthiness of reinsured companies with whom we have funds held arrangements. We have a significant funds held concentration of $1.0 billion to one reinsured company which has financial strength credit ratings of A+ from A.M. Best and AA from S&P.

We limit the amount of credit exposure to any one counterparty and none of our counterparty credit exposures, excluding U.S. Government instruments and the counterparty noted above, exceeded 10% of shareholders’ equity as of December 31, 2018. Our credit exposure to the U.S. government was $1,136.6 million as at December 31, 2018.Operating Leases

We lease office space under operating leases expiring in various years through 2028. The leases are renewable at our option under certain circumstances. The following is a schedule of future minimum rental payments on non-cancelable leases as of December 31, 2018:



2019	$	9,510
2020	10,754
2021	9,772
2022	7,500
2023	6,592
2024 and beyond	21,276
	$	65,404

Rent expense for the years ended December 31, 2018, 2017 and 2016 was $11.3 million, $9.5 million and $9.7 million, respectively.Legal ProceedingsWe are, from time to time, involved in various legal proceedings in the ordinary course of business, including litigation and arbitration regarding claims. Estimated losses relating to claims arising in the ordinary course of business, including the anticipated outcome of any pending arbitration or litigation are included in the liability for losses and LAE in our consolidated balance sheets. In addition to claims litigation, we may be subject to other lawsuits and regulatory actions in the normal course of business, which may involve, among other things, allegations of underwriting errors or omissions, employment claims or regulatory activity. We do not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material effect on our business, results of operations or financial condition. We anticipate that, similar to the rest of the insurance and reinsurance industry, we will continue to be subject to litigation and arbitration proceedings in the ordinary course of business, including litigation generally related to the scope of coverage with respect to asbestos and environmental and other claims.Unfunded Investment CommitmentsAs at December 31, 2018, we had unfunded commitments of $228.2 million and $167.2 million to private equity funds and equity method investments, respectively.GuaranteesAs at December 31, 2018 and 2017, parental guarantees and capital instruments supporting subsidiaries' insurance obligations were $614.5 million and $630.7 million, respectively. We also have a FAL facility, which subsequent to year end, on February 12, 2019, we increased to issue up to $375.0 million of letters of credit, and maintained the provision to increase the facility up to $400.0 million. The FAL Facility is available to satisfy our Funds at Lloyd’s requirements and expires in 2022. As at December 31, 2018 there were $295.0 million letters of credit issued under this facility which have a parental guarantee.Significant New BusinessWe have entered into transaction agreements that are expected to become effective subsequent to December 31, 2018. Refer to Note 4 - "Significant New Business" New Business above.Asbestos Personal Injury Liabilities

We acquired DCo on December 30, 2016, as described in Note 3 - "Acquisitions". DCo continues to process asbestos personal injury claims in the normal course of business and is separately managed.

Other liabilities on our consolidated balance sheets include amounts for indemnity and defense costs for pending and future claims, determined using standard actuarial techniques for asbestos-related exposures. Other liabilities also include amounts for environmental liabilities associated with DCo's properties.

Other assets on our consolidated balance sheets include estimated insurance recoveries relating to these liabilities. The recorded asset represents our assessment of the capacity of the insurance agreements to provide for the payment of anticipated defense and indemnity costs for pending claims and projected future demands. The recognition of these recoveries is based on an assessment of the right to recover under the respective contracts and on the financial strength of the insurers. The recorded asset does not represent the limits of our insurance coverage, but rather the amount we would expect to recover if the accrued indemnity and defense costs were paid in full.

Included within other assets and other liabilities are the fair value adjustments that were initially recognized when DCo was acquired. These fair value adjustments continue to be amortized in proportion to the original expected payout patterns for the future claims and recoveries. The carrying value of the asbestos and environmental liabilities, insurance recoveries, future estimated expenses and the fair value adjustments related to DCo, as of December 31, 2018 and 2017 was as follows:



	2018			2017
Other liabilities:
Direct asbestos liabilities	$	265,975		$	282,369
Direct environmental liabilities	2,152			2,379
Estimated future expenses	19,843			19,843
Fair value adjustments	(84,650		)	(85,427		)
	203,320			219,164
Other assets:
Insurance recoveries related to direct asbestos and environmental liabilities	183,676			170,726
Fair value adjustments	(47,868		)	(48,400		)
	135,808			122,326

Net liabilities relating to direct asbestos and environmental exposures	$	67,512		$	96,838

Redeemable Noncontrolling InterestWe have the right to purchase the RNCI interests from the RNCI holders at certain times in the future (each such right, a "call right") and the RNCI holders have the right to sell their RNCI interests to us at certain times in the future (each such right, a "put right"). The RNCI rights held by Trident are described in Note 21 - "Related Party Transactions". Dowling has a right to participate if Trident exercises its put right.

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment Information

24. SEGMENT INFORMATION

We have three reportable segments of business that are each managed, operated and separately reported: (i) Non-life Run-off; (ii) Atrium; and (iii) StarStone. Our other activities, which do not qualify as a reportable segment, include our corporate expenses, debt servicing costs, holding company income and expenses, foreign exchange, our remaining life business and other miscellaneous items. These segments are described in Note 1 - "Description of Business".

The Non-life Run-off segment comprises the operations and financial results of those insurance and reinsurance companies and portfolios in run-off that have been acquired by us.

Atrium and StarStone, our active underwriting operations, are reported as separate segments because they are managed and operated in separate and distinct manners. Atrium’s senior management runs its day-to-day operations with limited involvement of our senior management, whereas our senior management and employees are involved in StarStone’s day-to-day operations. Atrium employees are not involved in the management or strategy of StarStone, nor are StarStone employees involved in the management or strategy of Atrium. Atrium and StarStone are monitored and reported upon separately and distinctly and their strategies and business plans are determined independently of each other.The following tables set forth selected and consolidated statement of earnings results by segment for the years ended December 31, 2018, 2017, 2016:



	2018
	Non-Life Run-Off			Atrium			StarStone			Other			Total
Gross premiums written	$	(8,910	)	$	171,494		$	1,121,135		$	32,378		$	1,316,097

Net premiums written	$	(9,217	)	$	153,488		$	805,562		$	32,067		$	981,900

Net premiums earned	$	9,427		$	146,315		$	714,959		$	24,874		$	895,575
Net incurred losses and LAE	306,067			(69,810		)	(673,383		)	(16,899		)	(454,025		)
Life and Annuity Policy Benefits	—			—			—			(1,003		)	(1,003		)
Acquisition costs	(4,006		)	(50,646		)	(135,452		)	(2,686		)	(192,790		)
Operating expenses	(158,731		)	(17,777		)	(156,726		)	—			(333,234		)
Underwriting income (loss)	152,757			8,082			(250,602		)	4,286			(85,477		)
Net investment income	226,287			5,686			35,973			2,725			270,671
Net realized and unrealized losses	(381,712		)	(3,251		)	(17,672		)	(10,249		)	(412,884		)
Fees and commission income	16,466			18,622			—			—			35,088
Other income (losses)	35,978			162			(541		)	(514		)	35,085
Corporate expenses	(39,093		)	(6,921		)	—			(28,127		)	(74,141		)
Interest income (expense)	(30,616		)	—			(624		)	5,023			(26,217		)
Net foreign exchange gains (losses)	2,534			(3,394		)	(2,856		)	1,048			(2,668		)
EARNINGS (LOSS) BEFORE INCOME TAXES	(17,399		)	18,986			(236,322		)	(25,808		)	(260,543		)
Income tax benefit (expense)	3,581			(3,732		)	6,327			(52		)	6,124
Earnings from equity method investments	42,147			—			—			—			42,147
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS	28,329			15,254			(229,995		)	(25,860		)	(212,272		)
Net loss (earnings) attributable to noncontrolling interest	(3,107		)	(6,257		)	71,415			—			62,051
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED	25,222			8,997			(158,580		)	(25,860		)	(150,221		)
Dividends on preferred shares	—			—			—			(12,133		)	(12,133		)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$	25,222		$	8,997		$	(158,580	)	$	(37,993	)	$	(162,354	)

Underwriting ratios:
Loss ratio⁽¹⁾				47.7		%	94.2		%
Acquisition expense ratio ⁽¹⁾				34.6		%	18.9		%
Operating expense ratio⁽¹⁾				12.2		%	22.0		%
Combined ratio ⁽¹⁾				94.5		%	135.1		%

⁽¹⁾Refer to "Underwriting Ratios" for a description of how these ratios are calculated.



	2017
	Non-Life Run-Off			Atrium			StarStone			Other			Total
Gross premiums written	$	14,102		$	153,472		$	895,160		$	5,719		$	1,068,453

Net premiums written	$	6,482		$	134,214		$	464,901		$	4,793		$	610,390

Net premiums earned	$	14,162		$	134,747		$	459,403		$	4,809		$	613,121
Net incurred losses and LAE	190,674			(69,419		)	(314,806		)	—			(193,551		)
Life and Annuity Policy Benefits	—			—			—			(4,015		)	(4,015		)
Acquisition costs	(328		)	(47,688		)	(48,012		)	(878		)	(96,906		)
Operating expenses	(132,235		)	(17,444		)	(135,558		)	—			(285,237		)
Underwriting income (loss)	72,273			196			(38,973		)	(84		)	33,412
Net investment income	166,678			4,218			27,706			10,187			208,789
Net realized and unrealized gains (losses)	179,545			1,117			16,613			(6,941		)	190,334
Fees and commission income (expense)	43,849			22,788			632			(1,166		)	66,103
Other income	21,157			230			570			648			22,605
Corporate expenses	(101,592		)	(12,142		)	—			(37,014		)	(150,748		)
Interest income (expense)	(28,970		)	(559		)	(1,902		)	3,329			(28,102		)
Net foreign exchange losses	(7,347		)	(5,060		)	(926		)	(4,204		)	(17,537		)
Loss on sale of subsidiary	—			—			—			(16,349		)	(16,349		)
EARNINGS (LOSS) BEFORE INCOME TAXES	345,593			10,788			3,720			(51,594		)	308,507
Income tax benefit (expense)	6,990			(1,593		)	988			10			6,395
Earnings from equity method investments	5,904			—			—			—			5,904
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS	358,487			9,195			4,708			(51,584		)	320,806
Net earnings from discontinued operations, net of income taxes	—			—			—			10,993			10,993
NET EARNINGS (LOSS)	358,487			9,195			4,708			(40,591		)	331,799
Net earnings attributable to noncontrolling interest	(14,687		)	(3,772		)	(1,882		)	—			(20,341		)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$	343,800		$	5,423		$	2,826		$	(40,591	)	$	311,458

Underwriting ratios:
Loss ratio⁽¹⁾				51.5		%	68.5		%
Acquisition expense ratio ⁽¹⁾				35.4		%	10.5		%
Operating expense ratio⁽¹⁾				13.0		%	29.5		%
Combined ratio ⁽¹⁾				99.9		%	108.5		%

⁽¹⁾Refer to "Underwriting Ratios" for a description of how these ratios are calculated.



	2016
	Non-Life Run-Off			Atrium			StarStone			Other			Total
Gross premiums written	$	17,316		$	143,170		$	854,699		$	7,157		$	1,022,342

Net premiums written	$	9,202		$	140,437		$	648,036		$	6,261		$	803,936

Net premiums earned	$	16,755		$	124,416		$	676,608		$	5,735		$	823,514
Net incurred losses and LAE	285,881			(58,387		)	(401,593		)	—			(174,099		)
Life and Annuity Policy Benefits	—			—			—			2,038			2,038
Acquisition costs	(4,198		)	(44,670		)	(138,822		)	1,121			(186,569		)
Operating expenses	(151,316		)	(14,233		)	(124,239		)	—			(289,788		)
Underwriting income	147,122			7,126			11,954			8,894			175,096
Net investment income	145,237			2,940			22,221			15,065			185,463
Net realized and unrealized gains (losses)	77,685			(601		)	5,728			(4,994		)	77,818
Fees and commission income (expense)	17,447			18,189			5,102			(1,374		)	39,364
Other income	7,897			206			740			1,393			10,236
Corporate expenses	(61,583		)	(10,899		)	—			(61,464		)	(133,946		)
Interest income (expense)	(22,268		)	(198		)	(47		)	1,871			(20,642		)
Net foreign exchange gains (losses)	1,684			(3,310		)	754			207			(665		)
EARNINGS (LOSS) BEFORE INCOME TAXES	313,221			13,453			46,452			(40,402		)	332,724
Income tax expense	(28,577		)	(2,573		)	(3,693		)	(31		)	(34,874		)
Losses from equity method investments	(5,400		)	—			—			—			(5,400		)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS	279,244			10,880			42,759			(40,433		)	292,450
Net earnings from discontinued operations, net of income taxes	—			—			—			11,963			11,963
NET EARNINGS (LOSS)	279,244			10,880			42,759			(28,470		)	304,413
Net earnings attributable to noncontrolling interest	(17,600		)	(4,464		)	(17,542		)	—			(39,606		)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$	261,644		$	6,416		$	25,217		$	(28,470	)	$	264,807

Underwriting ratios:
Loss ratio⁽¹⁾				46.9		%	59.4		%
Acquisition expense ratio ⁽¹⁾				35.9		%	20.5		%
Operating expense ratio⁽¹⁾				11.5		%	18.3		%
Combined ratio ⁽¹⁾				94.3		%	98.2		%

⁽¹⁾Refer to "Underwriting Ratios" for a description of how these ratios are calculated.Gross Premiums Written by Geographical Area

The following table summarizes our gross premiums written for the year ended December 31, 2018 by geographic area. Geographic distribution in future years is subject to variation based upon market conditions and business strategies.



	Non-life Run-off					Atrium				StarStone				Other				Total
	Total			%		Total		%		Total		%		Total		%		Total		%
	(In thousands of U.S. dollars, except percentages)
United States	$	(1,819	)	20.4	%	$	95,152	55.5	%	$	708,763	63.2	%	$	28,506	88.0	%	$	830,602	63.1	%
United Kingdom	1,134			(12.7	)%	10,905		6.4	%	54,057		4.8	%	—		—	%	66,096		5.0	%
Europe	(8,225		)	92.3	%	11,661		6.8	%	192,156		17.1	%	3,872		12.0	%	199,464		15.2	%
Asia	—			—	%	5,113		3.0	%	67,229		6.0	%	—		—	%	72,342		5.5	%
Rest of World	—			—	%	48,663		28.3	%	98,930		8.8	%	—		—	%	147,593		11.2	%
Total	$	(8,910	)	100.0	%	$	171,494	100.0	%	$	1,121,135	99.9	%	$	32,378	100.0	%	$	1,316,097	100.0	%

Assets by Segment

Invested assets are managed on a subsidiary by subsidiary basis, and investment income and realized and unrealized gains on investments are recognized in each segment as earned. Our total assets as of December 31, 2018 and 2017 by segment were as follows:



	2018			2017
Assets by Segment:
Non-life Run-off	$	13,362,749		$	10,368,105
Atrium	591,722			556,637
StarStone	3,416,132			3,128,725
Other	(814,333		)	(447,045		)
Total assets	$	16,556,270		$	13,606,422

Unaudited Condensed Quarterly Financial Data

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Unaudited Condensed Quarterly Financial Data

25. UNAUDITED CONDENSED QUARTERLY FINANCIAL DATA



	December 31,						September 30,						June 30,						March 31,
	2018			2017			2018			2017			2018			2017			2018			2017
INCOME
Net premiums earned	$	231,947		$	160,627		$	264,597		$	148,025		$	228,812		$	155,571		$	170,219		$	148,898
Fees and commission income	11,455			19,627			6,950			15,895			8,352			18,667			8,331			11,914
Net investment income	68,453			58,605			69,430			52,028			66,469			49,417			66,319			48,739
Net realized and unrealized gains (losses)	(158,213		)	50,637			(57,223		)	29,301			(54,418		)	51,877			(143,030		)	58,519
Other income (losses)	34,267			13,763			8,226			1,734			(9,351		)	(5,090		)	1,943			12,198
	187,909			303,259			291,980			246,983			239,864			270,442			103,782			280,268
EXPENSES
Net incurred losses and loss adjustment expenses	187,698			30,327			153,974			75,712			92,819			9,620			19,534			77,892
Life and annuity policy benefits	786			(1,033		)	423			1,060			(160		)	4,289			(46		)	(301		)
Acquisition costs	55,106			21,449			54,242			24,281			53,334			30,355			30,108			20,821
General and administrative expenses	106,950			126,702			102,553			100,325			102,612			106,490			95,260			102,468
Interest expense	4,644			7,251			4,640			6,410			8,922			7,573			8,011			6,868
Net foreign exchange losses (gains)	1,279			1,925			1,040			4,775			(5,519		)	7,122			5,868			3,715
Loss on sale of subsidiary	—			—			—			6,740			—			9,609						—
	356,463			186,621			316,872			219,303			252,008			175,058			158,735			211,463
EARNINGS (LOSS) BEFORE INCOME TAXES	(168,554		)	116,638			(24,892		)	27,680			(12,144		)	95,384			(54,953		)	68,805
Income tax benefit (expense)	10,688			9,629			(746		)	(1,432		)	(3,646		)	(4,731		)	(172		)	2,929
Earnings (losses) from equity method investments	8,488			(4,460		)	3,317			(5,582		)	15,645			15,946			14,697			—
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS	(149,378		)	121,807			(22,321		)	20,666			(145		)	106,599			(40,428		)	71,734
Net earnings (loss) from discontinued operations, net of income taxes	—			11,998			—			3,495			—			(4,871		)	—			371
NET EARNINGS (LOSS)	(149,378		)	133,805			(22,321		)	24,161			(145		)	101,728			(40,428		)	72,105
Net loss (earnings) attributable to noncontrolling interest	42,955			(6,206		)	11,489			14,832			8,389			(11,542		)	(782		)	(17,425		)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED	(106,423		)	127,599			(10,832		)	38,993			8,244			90,186			(41,210		)	54,680
Dividends on preferred shares	(7,000		)	—			(5,133		)	—			—			—			—			—
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$	(113,423	)	$	127,599		$	(15,965	)	$	38,993		$	8,244		$	90,186		$	(41,210	)	$	54,680

Earnings per ordinary share attributable to Enstar Group Limited:
Basic:
Net earnings (loss) from continuing operations	$	(5.29	)	$	5.96		$	(0.74	)	$	1.83		$	0.40		$	4.90		$	(2.12	)	$	2.80
Net earnings (loss) from discontinued operations, net of income taxes	—			0.62			—			0.18			—			(0.25		)	—			0.02
Net earnings (loss) per ordinary share	$	(5.29	)	$	6.58		$	(0.74	)	$	2.01		$	0.40		$	4.65		$	(2.12	)	$	2.82
Diluted⁽¹⁾:
Net earnings (loss) from continuing operations	$	(5.29	)	$	5.90		$	(0.74	)	$	1.81		$	0.40		$	4.87		$	(2.12	)	$	2.78
Net earnings (loss) from discontinued operations, net of income taxes	—			0.61			—			0.18			—			(0.25		)	—			0.02
Net earnings (loss) per ordinary share	$	(5.29	)	$	6.51		$	(0.74	)	$	1.99		$	0.40		$	4.62		$	(2.12	)	$	2.80

Schedule I - Summary of Investments Other Than Investments in Related Parties

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract]

Schedule I - Summary of Investments Other Than Investments in Related Parties

SCHEDULE I

ENSTAR GROUP LIMITED

SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES

As of December 31, 2018

(Expressed in thousands of U.S. Dollars)



Type of investment	Cost ⁽¹⁾		Fair Value		Amount at which shown in the balance sheet⁽²⁾
Fixed maturity securities and short-term investments — Trading and fixed maturity investments within funds held - directly managed:
U.S. government and agency	$	511,784	$	509,672	$	509,672
U.K. government	301,749		300,631		300,631
Other government	741,803		720,625		720,625
Corporate	4,943,483		4,764,481		4,764,481
Municipal	130,429		127,785		127,785
Residential mortgage-backed	772,445		773,545		773,545
Commercial mortgage-backed	729,232		713,063		713,063
Asset-backed	642,618		636,481		636,481
Total	8,773,543		8,546,283		8,546,283
Fixed maturity securities and short-term investments — Available-for-sale:
U.S. government and agency	576		573		573
Other government	72,811		73,185		73,185
Corporate	75,535		75,359		75,359
Municipal	2,499		2,480		2,480
Residential mortgage-backed	12		12		12
Total	151,433		151,609		151,609
Equities⁽³⁾	108,070		109,823		109,823
Other investments, at fair value⁽⁴⁾	659,995		659,995		659,995
Total	$	9,693,041	$	9,467,710	$	9,467,710


⁽¹⁾	Original cost of fixed maturity securities is reduced by repayments and adjusted for amortization of premiums or accretion of discounts.


⁽²⁾	The table above excludes businesses held for sale. Refer to Note 5 - "Divestitures, Held-for-Sale Businesses and Discontinued Operations" of the notes to the consolidated financial statements.

⁽³⁾

The difference in the amount of equities shown at fair value and the equities shown in our consolidated balance sheet relates to the fair value of $32.3 million as of December 31, 2018 for our investment in a registered investment company affiliated with entities owned by Trident, $25.0 million as a co-investor alongside Stone Point and a $200.0 million investment in AmTrust. Refer to Note 21 - "Related Party Transactions" of the notes to the consolidated financial statements.

⁽⁴⁾

The difference in the amount of other investments shown at fair value and the other investments shown in our consolidated balance sheet relates to the fair value of $1,297.8 million as of December 31, 2018 for our other investments in funds or companies owned by or affiliated with certain related parties. Refer to Note 21 - "Related Party Transactions" of the notes to the consolidated financial statements.

Schedule II - Condensed Financial Statements

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Schedule II - Condensed Financial Statements

SCHEDULE II

ENSTAR GROUP LIMITED

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Balance Sheets - Parent Company Only

As of December 31, 2018 and 2017



	2018			2017
	(in thousands of U.S. dollars, except share data)
ASSETS
Cash and cash equivalents	$	15,213		$	2,458
Balances due from subsidiaries	25,091			23,635
Investments in subsidiaries	4,843,913			3,917,830
Other assets	8,596			2,877
TOTAL ASSETS	$	4,892,813		$	3,946,800
LIABILITIES
Debt obligations	$	861,539		$	646,689
Balances due to subsidiaries	120,397			148,410
Other liabilities	8,944			15,017
TOTAL LIABILITIES	990,880			810,116
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Ordinary shares (par value $1 each, issued and outstanding 2018: 21,459,997; 2017: 19,406,722):
Voting Ordinary Shares (issued and outstanding 2018: 17,950,315; 2017: 16,402,279)	17,950			16,402
Non-voting convertible ordinary Series C Shares (issued and outstanding 2018 and 2017: 2,599,672)	2,600			2,600
Non-voting convertible ordinary Series E Shares (issued and outstanding 2018: 910,010; 2017: 404,771)	910			405
Preferred Shares:
Series C Preferred Shares (issued and held in treasury 2018 and 2017: 388,571)	389			389
Series D Preferred Shares (issued and outstanding 2018: 16,000)	400,000			—
Series E Preferred Shares (issued and outstanding 2018: 4,400)	110,000			—
Treasury shares, at cost (Series C Preferred Shares 2018 and 2017: 388,571)	(421,559		)	(421,559		)
Additional paid-in capital	1,804,664			1,395,067
Accumulated other comprehensive income	10,440			10,468
Retained earnings	1,976,539			2,132,912
Total Enstar Group Limited Shareholders’ Equity	3,901,933			3,136,684
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,892,813		$	3,946,800

See accompanying notes to the Condensed Financial Information of RegistrantSCHEDULE II

ENSTAR GROUP LIMITED

CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CONTINUED

Statements of Earnings - Parent Company Only

For the Years Ended December 31, 2018, 2017 and 2016



	2018			2017		2016
	(in thousands of U.S. dollars)
INCOME
Net investment income	$	142		$	80	$	44
Other income	—			1,050		—
Dividend income from subsidiaries	—			249,055		361,675
	142			250,185		361,719
EXPENSES
General and administrative expenses	68,977			87,596		59,755
Interest expense	27,353			23,138		10,109
Net foreign exchange losses (gains)	7,655			6,135		(318		)
	103,985			116,869		69,546
EARNINGS (LOSSES) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES	(103,843		)	133,316		292,173
Equity in undistributed earnings (losses) of subsidiaries - continuing operations	(46,378		)	167,149		(39,329		)
Equity in undistributed earnings (losses) of subsidiaries - discontinued operations	—			10,993		11,963
NET EARNINGS	(150,221		)	311,458		264,807
Dividends on preferred shares	(12,133		)	—		—
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR GROUP LIMITED ORDINARY SHAREHOLDERS	$	(162,354	)	$	311,458	$	264,807

See accompanying notes to the Condensed Financial Information of RegistrantStatements of Comprehensive Income - Parent Company Only

For the Years Ended December 31, 2018, 2017 and 2016



	2018			2017		2016
	(in thousands of U.S. dollars)
NET EARNINGS	$	(150,221	)	$	311,458	$	264,807
OTHER COMPREHENSIVE INCOME (LOSS) RELATING TO SUBSIDIARIES, NET OF TAX	(27		)	34,016		11,613
COMPREHENSIVE INCOME	$	(150,248	)	$	345,474	$	276,420

See accompanying notes to the Condensed Financial Information of RegistrantSCHEDULE II

ENSTAR GROUP LIMITED

CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CONTINUED

Statements of Cash Flows - Parent Company Only

For the Years Ended December 31, 2018, 2017 and 2016



	2018			2017			2016
	(in thousands of U.S. dollars)
OPERATING ACTIVITIES:
Net cash flows provided by (used in) operating activities	$	(128,382	)	$	97,898		$	39,185
INVESTING ACTIVITIES:
Dividends and return of capital from subsidiaries	101,000			217,450			250,117
Contributions to subsidiaries	(660,339		)	(465,650		)	(295,268		)
Net cash flows used in investing activities	(559,339		)	(248,200		)	(45,151		)
FINANCING ACTIVITIES:
Net proceeds from the issuance of preferred shares	495,357			—			—
Dividends on preferred shares	(12,133		)	—			—
Repayment of loans	(898,633		)	(696,640		)	(426,750		)
Receipt of loans	1,115,885			844,516			433,048
Net cash flows provided by financing activities	700,476			147,876			6,298
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	12,755			(2,426		)	332
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	2,458			4,884			4,552
CASH AND CASH EQUIVALENTS, END OF YEAR	$	15,213		$	2,458		$	4,884

See accompanying notes to the Condensed Financial Information of RegistrantNotes to the Condensed Financial Information of Registrant

The Condensed Financial Information of Registrant should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in Part II - Item 8 of this Annual Report on Form 10-K. Our wholly owned and majority owned subsidiaries are recorded based upon our proportionate share of our subsidiaries' net assets (similar to presenting them on the equity method).

Investing activities in the Condensed Statements of Cash Flows primarily represents the flow of funds to and from subsidiaries to provide cash on hand to fund acquisitions and significant new business. Net investment income relates to interest on loans to subsidiaries. For the years ended December 31, 2018, 2017, and 2016, interest paid was $25.1 million, $17.6 million, and $15.0 million, respectively. During the years ended December 31, 2018, 2017, and 2016, non-cash investing activities included $nil, $31.6 million, and $111.6 million, respectively, for dividends and return of capital from subsidiaries and $414.8 million, $148.1 million, and $452.1 million, respectively, for contributions to subsidiaries. In 2018, these transactions represented the contribution of the acquired outstanding shares and warrants of KaylaRe Holdings, Ltd to another subsidiary company. In 2017 and 2016, these transactions were to settle intercompany balances, resulting in a net reduction in balances due from subsidiaries and an increase in investments in subsidiaries.

As of December 31, 2018, parental guarantees and capital support instruments supporting subsidiaries' insurance obligations were $614.5 million. In addition, as of December 31, 2018 there were $295.0 million of unsecured letters of credit for Funds at Lloyd's which have a parental guarantee.

As of December 31, 2018 and 2017, retained earnings were $1,976.5 million and $2,132.9 million, respectively, a decrease of $156.4 million. This decrease was primarily attributable to the net loss of $162.4 million.

Schedule III - Supplementary Insurance Information

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract]

Schedule III - Supplementary Insurance Information

SCHEDULE III

ENSTAR GROUP LIMITED

SUPPLEMENTARY INSURANCE INFORMATION

(Expressed in thousands of U.S. Dollars)



	As of December 31,								Year ended December 31,
	Deferred Acquisition Costs		Reserves for Losses and Loss Adjustment Expenses		Unearned Premiums		Policy Benefits for Life and Annuity Contracts		Net Premiums Earned		Net Investment Income		Losses and Loss Expenses and Policy Benefits			Amortization of Deferred Acquisition Costs			Other Operating Expenses		Net Premiums Written
2018
Non-life run-off	$	4,378	$	7,540,662	$	136,023	$	—	$	9,427	$	226,287	$	(306,067	)	$	4,006		$	197,824	$	(9,217	)
Atrium	20,355		241,284		70,429		—		146,315		5,686		69,810			50,646			24,698		153,488
StarStone	96,004		1,608,697		619,164		—		714,959		35,973		673,383			135,452			156,726		805,562
Other	364		18,861		17,002		105,080		24,874		2,725		17,902			2,686			28,127		32,067
Total	$	121,101	$	9,409,504	$	842,618	$	105,080	$	895,575	$	270,671	$	455,028		$	192,790		$	407,375	$	981,900
2017
Non-life run-off	$	655	$	5,949,472	$	14,275	$	—	$	14,162	$	166,678	$	(190,674	)	$	328		$	233,827	$	6,482
Atrium	18,385		240,873		64,877		—		134,747		4,218		69,419			47,688			29,586		134,214
StarStone	45,944		1,207,743		504,045		—		459,403		27,706		314,806			48,012			135,558		464,901
Other	—		—		—		117,207		4,809		10,187		4,015			878			37,014		4,793
Total	$	64,984	$	7,398,088	$	583,197	$	117,207	$	613,121	$	208,789	$	197,566		$	96,906		$	435,985	$	610,390
2016
Non-life run-off	$	1,081	$	4,716,363	$	15,107	$	—	$	16,755	$	145,237	$	(285,881	)	$	4,198		$	212,899	$	9,202
Atrium	16,964		212,122		61,862		—		124,416		2,940		58,387			44,670			25,132		140,437
StarStone	40,069		1,059,382		471,374		—		676,608		22,221		401,593			138,822			124,239		648,036
Other	—		—		—		112,095		5,735		15,065		(2,038		)	(1,121		)	61,464		6,261
Total	$	58,114	$	5,987,867	$	548,343	$	112,095	$	823,514	$	185,463	$	172,061		$	186,569		$	423,734	$	803,936

Schedule IV - Reinsurance

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]

Schedule IV - Reinsurance

SCHEDULE IV

ENSTAR GROUP LIMITED

REINSURANCE

For the Years Ended December 31, 2018, 2017 and 2016

(Expressed in thousands of U.S. Dollars)



	Gross		Ceded to Other Companies			Assumed from Other Companies		Net Amount		Percentage of Amount Assumed to Net
2018
Life insurance in force	$	855,366	$	(84,603	)	$	—	$	770,763	—	%
Premiums earned:
Property and casualty	985,637		(330,110		)	236,182		891,709		26.5	%
Life and annuities	3,892		(26		)	—		3,866		—	%
Total premiums earned	$	989,529	$	(330,136	)	$	236,182	$	895,575
2017
Life insurance in force	$	979,291	$	(100,189	)	$	—	$	879,102	—	%
Premiums earned:
Property and casualty	899,226		(433,075		)	142,161		608,312		23.4	%
Life and annuities	5,900		(1,091		)	—		4,809		—	%
Total premiums earned	$	905,126	$	(434,166	)	$	142,161	$	613,121
2016
Life insurance in force	$	2,317,567	$	(585,575	)	$	—	$	1,731,992	—	%
Premiums earned:
Property and casualty	804,141		(178,834		)	192,472		817,779		23.5	%
Life and annuities	7,220		(1,485		)	—		5,735		—	%
Total premiums earned	$	811,361	$	(180,319	)	$	192,472	$	823,514

Schedule V - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule V - Valuation and Qualifying Accounts

SCHEDULE V

ENSTAR GROUP LIMITED

VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended December 31, 2018, 2017 and 2016

(Expressed in thousands of U.S. Dollars)



	Balance at Beginning of Year	Charged to costs and expenses		Charged to other accounts ⁽¹⁾		Deductions ⁽²⁾		Balance at End of Year
December 31, 2018
Reinsurance balances recoverable on paid and unpaid losses:
Provisions for bad debt	165,213	—		(1,837	)	(6,644	)	156,732
Valuation allowance for deferred tax assets	188,300	(2,492	)	18,000		8,305		212,113

December 31, 2017
Reinsurance balances recoverable on paid and unpaid losses:
Provisions for bad debt	174,516	(1,536	)	(4,191	)	(3,576	)	165,213
Valuation allowance for deferred tax assets	290,861	(16,694	)	—		(85,867	)	188,300

December 31, 2016
Reinsurance balances recoverable on paid and unpaid losses:
Provisions for bad debt	210,327	(13,822	)	(19,255	)	(2,734	)	174,516
Valuation allowance for deferred tax assets	291,280	13,389		—		(13,808	)	290,861


⁽¹⁾	These amounts are credited to net incurred losses and there is an offsetting debit within the same line, resulting in no impact on earnings. Valuation allowance for deferred tax asset charged to other accounts is related to acquisitions in 2018.

⁽²⁾

Credited to the related asset account.

Schedule VI - Supplementary Information Concerning Property/Casualty Insurance Operations

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract]

Schedule VI - Supplementary Information Concerning Property/Casualty Insurance Operations

SCHEDULE VI

ENSTAR GROUP LIMITED

SUPPLEMENTARY INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS

As of and for the years ended December 31, 2018, 2017 and 2016

(Expressed in thousands of U.S. Dollars)



	As of December 31,						Year ended December 31,
Affiliation with Registrant	Deferred Acquisition Costs		Reserves for Unpaid Losses and Loss Adjustment Expenses		Unearned Premiums		Net Premiums Earned		Net Investment Income		Net Losses and Loss Expenses Incurred					Net Paid Losses and Loss Expenses			Amortization of Deferred Acquisition Costs		Net Premiums Written
Affiliation with Registrant	Deferred Acquisition Costs		Reserves for Unpaid Losses and Loss Adjustment Expenses		Unearned Premiums		Net Premiums Earned		Net Investment Income		Current Year		Prior Year			Net Paid Losses and Loss Expenses			Amortization of Deferred Acquisition Costs		Net Premiums Written
Consolidated Subsidiaries
2018	$	121,101	$	9,409,504	$	842,618	$	891,708	$	269,093	$	689,782	$	(235,757	)	$	(1,384,545	)	$	192,790	$	978,037
2017	64,984		7,398,088		583,197		608,312		198,602		437,853		(244,302		)	(945,194		)	96,028		605,597
2016	58,114		5,987,867		548,343		817,779		170,398		493,016		(318,917		)	(833,057		)	187,690		797,675

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Preparation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Basis of Consolidation

The consolidated financial statements include our assets, liabilities and results of operations as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016. Results of operations for acquired subsidiaries are included from the date of acquisition. All significant intercompany transactions and balances have been eliminated.

Use of Estimates


•	liability for losses and loss adjustment expenses ("LAE");


•	liability for policy benefits for life and annuity contracts;


•	reinsurance balances recoverable on paid and unpaid losses;


•	valuation allowances on reinsurance balances recoverable and deferred tax assets;


•	impairment charges, including other-than-temporary impairments on investment securities classified as available-for-sale, and impairments on goodwill, intangible assets and deferred charge assets;


•	gross and net premiums written and net premiums earned;


•	fair value measurements of investments;


•	fair value estimates associated with accounting for acquisitions;


•	fair value estimates associated with loss portfolio transfer reinsurance agreements for which we have elected the fair value option; and

•

redeemable noncontrolling interests.

Premiums

Non-Life

Life and Annuities

Premiums receivable

Unearned premiums and prepaid reinsurance premiums

Acquisition Costs

Losses and LAE

Non-life Run-off

Atrium and StarStone

Components of Net Incurred Losses and LAE

Included within the total net incurred losses and LAE on our consolidated statement of earnings are the following items:


•	Net losses paid: paid losses and LAE, net of related reinsurance recoveries.


•	Net change in case and LAE reserves: the change in case reserves and associated LAE, net of related reinsurance recoveries.


•	Net change in IBNR reserves: the change in IBNR reserves, net of related reinsurance recoveries.


•	Increase (reduction) in estimates of net ultimate losses: the total of net loses paid, net change in case and LAE reserves and the net change in IBNR.


•	Increase (reduction) in provisions for unallocated LAE: the net change in our provision for unallocated LAE.


•	Amortization of deferred charge assets: the amortization of the deferred charge assets associated with the retroactive reinsurance contracts which we assumed, where the estimated ultimate losses at inception were greater than the premiums received.


•	Amortization of fair value adjustments: the amortization of the fair value adjustments associated with the acquisitions of companies, where the acquired reserves and recoveries were fair valued upon acquisition.

•

Net incurred losses and LAE: the total of increase (reduction) in estimates of net ultimate losses, increase (reduction) in provisions for unallocated LAE, amortization of deferred charge assets, amortization of fair value adjustments and changes in fair value - fair value option.

Policy Benefits for Life and Annuity Contracts

Reinsurance Balances Recoverable, Funds Held, and Retroactive Reinsurance

Under funds held arrangements, the reinsured company has retained funds that would otherwise have been remitted to our reinsurance subsidiaries. The funds balance is credited with investment income and losses payable are deducted. Funds held are shown under two categories on the consolidated balance sheets, where funds held upon which we receive the underlying portfolio economics are shown as "Funds held - directly managed", and funds held where we receive a fixed crediting rate are shown as "Funds held by reinsured companies". Funds held by reinsured companies are carried at cost. Funds held - directly managed, carried at fair value, represents the aggregate of funds held at cost and the value of an embedded derivative. The embedded derivative relates to our contractual right to receive the return on the underlying investment portfolio economics. The investment returns on both categories of funds held are recognized in net investment income and net realized and unrealized gains (losses). The revaluation of the embedded derivative is included in net unrealized gains (losses).Amounts billed to, and due from, reinsurers resulting from paid movements in the underlying business are calculated in accordance with the terms of the individual reinsurance contracts. Similarly, reinsurance balances recoverable on paid and unpaid losses related to our case reserves are calculated by applying the terms of any applicable reinsurance coverage to movements in the underlying case reserves. Our estimate of reinsurance balances recoverable on paid and unpaid losses related to IBNR reserves is recognized on a basis consistent with the underlying IBNR reserves.Our reinsurance balances recoverable on paid and unpaid losses are presented net of a provision for uncollectible amounts, reflecting the amount deemed not collectible due to credit quality, collection problems due to the location of the reinsurer, contractual disputes with reinsurers over individual contentious claims, contract language or coverage issues.Retroactive reinsurance policies provide indemnification of losses and LAE with respect to past loss events. In our Non-life Run-off segment we use the balance sheet accounting approach for assumed loss portfolio transfers, whereby at the inception of the contract there are no premiums or losses recorded in earnings.

Deferred Charge Assets

Fair Value Option

Investments

Short-term investments and fixed maturity investments

Investment purchases and sales are recorded on a trade-date basis. Realized gains and losses on the sale of investments are based upon specific identification of the cost of investments.

Other-Than-Temporary Impairments

Equities

Other investments, at fair value

Other investments, at cost

Cash and cash equivalents

Cash equivalents includes money market funds, fixed interest deposits and all highly liquid debt instruments purchased with an original maturity of three months or less.

Fees and Commission Income

Foreign Exchange

Our reporting currency is the U.S. dollar. Assets and liabilities of entities whose functional currency is not the U.S. dollar are translated at period end exchange rates. Revenues and expenses of such foreign entities are translated at average exchange rates during the year. The effect of the currency translation adjustments for these foreign entities is included in accumulated other comprehensive income (loss).Other foreign currency assets and liabilities that are considered monetary items are translated at exchange rates in effect at the balance sheet date. Foreign currency revenues and expenses are translated at transaction date exchange rates. These exchange gains and losses are recognized in net earnings.

Share-based Compensation

Derivative Instruments

Income Taxes

Certain of our subsidiaries and branches operate in jurisdictions where they are subject to taxation. Current and deferred tax expense or benefit is charged or credited to net earnings (loss), or, in certain cases, to other comprehensive income (loss), based upon enacted tax laws and rates applicable in the relevant jurisdiction in the period in which the tax becomes accruable or realizable. Deferred taxes are provided for temporary differences between the bases of assets and liabilities used in the financial statements and those used in the various jurisdictional tax returns. When our assessment indicates that all or some portion of deferred tax assets will not be realized, a valuation allowance is recorded against the deferred tax assets to reduce the assets to the amount more likely than not to be realized.We recognize the benefit relating to tax positions only where the position is more likely than not to be sustained assuming examination by tax authorities. A recognized tax benefit is measured as the largest amount that is greater than 50 percent likely of being realized. A liability or other adjustment is recognized for any tax benefit (along with any interest and penalty, if applicable) claimed in a tax return in excess of the amount allowed to be recognized in the financial statements under U.S. GAAP. Any changes in amounts recognized are recorded in the period in which they are determined.

Earnings Per Share

Acquisitions

The acquisition method is used to account for all business acquisitions. This method requires that we record the acquired assets and liabilities at their estimated fair value. The fair values of each of the acquired reinsurance assets and liabilities are derived from probability-weighted ranges of the associated projected cash flows, based on actuarially prepared information and management’s run-off strategy. Our run-off strategy, as well as that of other run-off market participants, is expected to be different from the seller's as generally sellers are not specialized in running off insurance and reinsurance liabilities whereas we and other market participants do specialize in such run-offs.The key assumptions used by us and, we believe, by other run-off market participants in the fair valuation of acquired companies are (i) the projected payout, timing and amount of claims liabilities; (ii) the related projected timing and amount of reinsurance collections; (iii) an appropriate discount rate, which is applied to determine the present value of the future cash flows; (iv) the estimated unallocated LAE to be incurred over the life of the run-off; (v) the impact of any accelerated run-off strategy; and (vi) an appropriate risk margin.

Acquisitions, Fair Value Adjustment

Goodwill

Intangible Assets

Redeemable Noncontrolling Interest

Internal-use Software

Held-for-sale Business and Discontinued Operations

New Accounting Standards Adopted and Recently Issued Accounting Pronouncements Not Yet Adopted

New Accounting Standards Adopted in 2018