Everest Re Group Ltd. (RE) 2014年年度報告「NYSE」.pdf

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1、Everest Re Group,Ltd.2 0 14 A N N U A L R E P O R TEverest Re Group,Ltd.(RE)NINETEEN YEAR COMPARATIVE RETURN*RE VS.S&P 500 INDEXSINCE RE IPO0*Including Stock Appreciation&Dividends12/9712/9612/9512/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14200%

2、400%600%1,000%800%S&P 500 IndexRE SharesS&P 500RE2014 Annual Report 199198_TXT.indd 14/9/15 5:13 PMEVEREST REINSURANCE COMPANYProvides reinsurance to property and casualty insurers in both the United States and international markets.EVEREST REINSURANCE(BERMUDA),LTD.Including its United Kingdom branc

3、h,provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers.EVEREST REINSURANCE COMPANY(IRELAND),LIMITEDProvides reinsurance to non-life insurers in Europe.EVEREST NATIONAL INSURANCE COMPANY,EVEREST SECURITY INSURANCE COMPANY AND EVEREST INDEMNITY

4、 INSURANCE COMPANYProvide property and casualty insurance to policyholders in the United States on admitted and excess and surplus lines bases.EVEREST INSURANCE COMPANY OF CANADAProvides property and casualty insurance to policyholders in Canada.MT.LOGAN RE,LTD.A segregated cell company,capitalized

5、by the Company and third party investors,to provide worldwide property catastrophe reinsurance.Everest Re Group,Ltd.is a Bermuda holding company that operates through the following subsidiariesAscending to the top.Shareholder value is created when a company continually strives to build on its streng

6、ths.Everest Re Group,Ltd.(RE)NINETEEN YEAR COMPARATIVE RETURN*RE VS.S&P 500 INDEXSINCE RE IPO0*Including Stock Appreciation&Dividends12/9712/9612/9512/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14200%400%600%1,000%800%S&P 500 IndexRE SharesS&P 500

7、RE2014 Annual Report 1Top line momentum continues with gross written premiums up 10%,or$530 million,to$5.7 billion in 2014.$5.7 billion9596979899000102030405060708091011121413$19.39$21.66$26.21$30.10$29.32$35.39$38.46$48.14$58.79$68.44$66.83$81.92$95.74$88.00$112.02$126.52$125.98$145.87$163.67$187.0

8、5Shareholder Value CreationGrowth in Book Value+Dividends Per ShareBook Value per ShareDividends to ShareholdersCompound Annual Growth of 13%per YearInsurance Operations2014 Gross Written Premium by Line of BusinessInsurance Operations2012 Gross Written Premium by Line of BusinessReinsurance Operati

9、ons2014 Gross Written Premium by RegionReinsurance Operations2012 Gross Written Premium by Region49%United States20%Latin America/S.America16%Europe(including UK)6%Asia/Australia4%Middle East/Africa3%Canada2%Worldwide32%Workers Comp22%Other Short Tail15%Professional Liability13%Crop11%Other Liabilit

10、y7%Accident&HealthReinsurance Operations2014 Gross Written Premium by RegionReinsurance Operations2012 Gross Written Premium by Region49%United States20%Latin America/S.America16%Europe(including UK)6%Asia/Australia4%Middle East/Africa3%Canada2%Worldwide32%Workers Comp22%Other Short Tail15%Professio

11、nal Liability13%Crop11%Other Liability7%Accident&Health2 Everest Re Group,Ltd.Financial HighlightsFive-Year Financial Performance(in millions,except per share data)20142013201220112010BALANCE SHEETTotal assets$20,817.8$19,808.0$19,777.9$18,893.6$18,384.2Shareholders equity7,451.16,968.36,733.56,071.

12、46,283.5Book value per common share166.75146.57130.96112.99115.45RESULTSGross written premiums$5,749.0$5,218.6$4,310.5$4,286.2$4,200.7Net pre-tax investment income530.6548.5600.2620.0653.5Net after-tax investment income437.7456.7510.3535.2570.5After-tax operating income(loss),excluding realized gain

13、s(losses)*$1,143.7$1,062.6$715.2$(93.6)$518.1 per basic common share24.9521.6613.67(1.73)9.11 per diluted common share24.7121.4713.62(1.73)9.08Net income(loss)$1,199.2$1,259.4$829.0$(80.5)$610.8 per basic common share26.1625.6715.85(1.49)10.73 per diluted common share25.9125.4415.79(1.49)10.70FINANC

14、IAL RATIOSCombined ratio82.8%84.5%93.8%118.5%102.8%After-tax operating return*on average adjusted equity16.3%16.5%12.2%(1.6)%8.9%Net income return on average adjusted equity17.1%19.5%14.1%(1.4)%10.4%(Compound Annual Growth Rate and Averages 2010 to 2014)Shareholders equity4.1%Book value per share10.

15、1%Shareholder value(book value per share adjusted for dividends)11.6%Average operating return*on equity10.5%Average net income return on equity11.9%Combined ratio*95.4%*The Company generally uses after-tax operating income(loss),a non-GAAP financial measure,to evaluate its performance.After-tax oper

16、ating income(loss)consists of net income(loss)excluding after-tax net realized capital gains(losses).Further explanation and a reconciliation of net income(loss)to after-tax operating income(loss)can be found at the back of the 10-K insert.*Weighted Average2014 Annual Report 34 Everest Re Group,Ltd.

17、Everest enjoyed yet another successful year in 2014 with$1.2 billion of net income and a 17%return on equity,out-pacing most in our industry.In fact,despite a challenging business environment,Dom and our team delivered record operating earnings of$24.71 per diluted common share,providing for a 14%in

18、crease in book value per share and propelling shareholders equity to new levels at$7.5 billion.These achievements reflect the essence of Everest and its strategies,which are focused on delivering the highest value to its shareholders through sound underwriting fun-damentals and efficient capital man

19、agement.This means that we will balance profitable growth with our capital strategies.In 2014,we returned close to$650 million to our shareholders,in the form of dividends and share repurchases,while at the same time,growing the business.As Dom will discuss in his letter,alternative third party capi

20、tal has significantly added to the industrys capacity.As efficient managers of capital,we took advantage of this phenomenon to lower our own cost of capital thereby improving the net margins on our growing book,despite noted rate declines.This is a testament to the strength,grit and determination of

21、 the Everest team,which has a long track record of successfully identifying and executing on opportunities.While Everest is beginning its 20th year as a listed com-pany on the NYSE,its long history actually dates back more than forty years,having established leading posi-tions around the globe.Indee

22、d,during 2014,we hosted a celebration in Singapore for our Asia Pacific clients,bro-kers,and employees to recognize their contribution to Everests success in this region over the last thirty-five years.Our Board of Directors,in addition to senior execu-tives of the Company,joined in this milestone e

23、vent.Also during the year,we welcomed Gerri Losquadro to our Board.Gerri brings a wealth of industry experience and a unique perspective that complements the other members LETTER FROM THE ChairmanThe Everest franchise,represented by its innovative culture and strong discipline,will continue to provi

24、de differentiated performance making Everest a clear winner in this evolving market.2014 Annual Report 5of our Board.Already she is making a positive impact and is a welcome addition.We have a high quality Board with a diverse level of experiences across various disciplines.Collectively,their counse

25、l is invaluable to Everests man-agement team as they navigate through the challenges of today and tomorrow.Looking ahead,we are pleased with our position and believe that the Everest franchise,represented by its inno-vative culture and strong discipline,will continue to pro-vide differentiated perfo

26、rmance making Everest a clear winner in this evolving market.Thank you for your continued support,Joseph V.TarantoChairman of the BoardReturn on EquityEverest enjoyed yet another successful year in 2014 with$1.2 billion of net income and a 17%return on equity,outpacing most in our industry.17%It was

27、 another terrific year for Everest,helped in part by the low level of catastrophe losses in 2014.More importantly though,it speaks to the success of our dynamically focused business strategies that seek out opportunities to provide the best long term value to our shareholders and continually evolve

28、in response to prevailing market conditions.This flexi-bility and adaptability to the market has been one of our hallmarks.During 2014,we delivered a 16%growth in book value per share,adjusted for dividends.This is the measure on which we base shareholder value creation and when viewed over the last

29、 10 years,we have seen this almost triple.In fact,since our initial public offering in 1995,Everests shares have provided a 13%compound annual growth in dividend-ad-justed book value per share to its shareholders.Over this same period,Everest has produced,on average,a 12%operating ROE,with last year

30、 coming in at 16%.This represents a double digit return over the risk free rate,which is a very attractive return and well in excess of our cost of capital.Considering the cyclicality of our business,the impact of severe natural catastrophe loss events,and the prolonged low interest rate environment

31、,these returns are particularly gratifying and point to the strength of Everests underwriting platform.With the continuing challenges posed by the financial mar-kets,including persistently low reinvestment rates,driving underwriting margin is critical to sustaining this strong perfor-mance and assur

32、ing the Companys long term success.We are diligent underwriters of risk with the ability to execute quickly and in size.These traits coupled with our strong bal-ance sheet,market longevity and diversified product offering provide significant advantage in a competitive market.REINSURANCE&ALTERNATIVE

33、CAPITAL THE NEW PARADIGM?While others contracted in the face of an increasingly chal-lenging marketplace,Everest saw opportunities and grew its gross written reinsurance premium by$580 million,or 15%,6 Everest Re Group,Ltd.A MESSAGE FROM THE ChiefExecutiveOfficerEverest sets new records again in 201

34、4$5.7 billion of gross written premium;+10%$887 million of underwriting income;+20%$1.1 billion of operating income;+8%$7.5 billion of shareholders equity;+7%to$4.5 billion during 2014.Net written reinsurance premium,however,was up only 7%as we sought to take advantage of the abundant capacity that

35、has flowed into the industry from alternative markets to improve the capital efficiency of our portfolio.For 2014,our reinsurance book,including Mt.Logan Re,gen-erated$935 million of underwriting profit.Excluding catastro-phe losses and prior year favorable loss development,the reinsurance underwrit

36、ing operations generated a 23%profit margin on premium;only modestly lower than 2013 despite the much publicized rate reductions.We continually strive to rebalance our risk portfolio and focus on achieving the best risk adjusted returns.We recognize the secular change that is occurring in our market

37、place,particularly for catastrophe risks,and have adapted our strategy to embrace this new paradigm.Having established Mt.Logan Re,our capital markets platform,in 2013,we grew its assets under management to almost$690 million by 1/1/15.In addition,during 2014,Everest sponsored three catastrophe bond

38、 issues that further added$950 mil-lion of multi-year collateralized capacity.These alternative capital ventures,coupled with the purchase of Industry Loss Warranties(ILWs)and other forms of traditional reinsurance,added substantially to Everests capacity allowing it to write catastrophe risk at bet

39、ter margins,while keeping its net exposure to peak zone events in check.Alternative reinsurance capital for the industry is estimated to be$60 billion today and growing.These investors are seek-ing responsible underwriting partners to originate,aggregate,and package a diversified risk portfolio.Ever

40、est,with more than forty years of experience is therefore a natural partner.This was evidenced by the demand for our last sponsored catastrophe bond,which was significantly upsized from its initial offering,as well as the additional significant funding we received from investors into Mt.Logan.It is

41、to our advantage to incorporate and manage this lower cost underwriting capi-tal into our strategy to build an optimal portfolio with better risk-return characteristics,while decreasing or hedging our peak exposures.Catastrophe risk excess of loss premium,which is the market much of the alternative

42、capital is focused on,however,is only part of Everests success as it represents less than one quar-ter of our business.We have a well-diversified portfolio across both product and geography and we are a respected market known to provide creative and innovative client-focused solu-tions.With reinsura

43、nce buyers consolidating their panels to a few high quality reinsurers,we remain one of the go to mar-kets.Our deep client/broker relationships and our ability to offer a broad range of solutions have provided opportunities outside of the mainstream.These unique situations are not broadly marketed a

44、nd added meaningfully to our top and bottom line in 2014.A significant and measurable advantage that Everest has is its low cost operating platform,which adds,on average,almost 7 points of underwriting margin to the business we write as compared to our peers.This advantage equates to roughly 3.5 poi

45、nts of ROE,which has not been lost on our competitors as several have announced initiatives to consolidate,streamline,flatten,and improve their own oper-ating cost structures.While providing a cost advantage,our streamlined structure also has the added benefits of being quick to market with decision

46、s and minimizing customer con-flict across operations.Everest will continue to reinvent itself to remain competitive and relevant in this evolving reinsurance marketplace.However,we believe traditional reinsurance will continue to have a valued place in companies risk management pro-grams as it offe

47、rs stability and certainty.Everest is a top tier reinsurer with strong ratings and balance sheet and the ability to nimbly deploy both rated and unrated capacity across its business.We will continue to leverage these strengths to be the reinsurer of choice for our customers.IMPROVING FUNDAMENTALS OF

48、 INSURANCE Our insurance operations generated$1.2 billion of premium,which was down 4%from last year,but had significantly improved underwriting performance.Excluding crop busi-ness,which had another challenging year,premium was up 12%and the combined ratio was 98.3%.The crop business was impacted b

49、y the continuing decline in commodity prices,particularly corn and soybeans,which given the unique structure of this government supported pro-gram,resulted in a lower premium base for 2014.Losses on this book were triggered by below-average crop yields,signif-icant losses in crop hail due to an unus

50、ual number of hail-storms during the year in the Midwest,and higher expenses associated with IT initiatives.Over the last number of years,we have detailed our strate-gies for improving the underwriting profitability of the insur-ance segment through a repositioning of this book.While masked by the p

51、oor results of the crop book and a modest,though declining,level of prior year loss development,the underlying insurance business has made a dramatic turn-around.Since 2011,the accident year combined ratio,excluding catastrophe losses and crop,has improved 10.3 points from 105.3%to 95.0%in 2014.$1.1

52、 billion2014 Annual Report 7Everest generated record operating earnings of$1.1 billion for 2014,driven by its ability to balance nimbleness with discipline.California workers compensation,the largest segment of the insurance book,has achieved compounded rate increases of 70%+since 2009 and in 2014 h

53、ad an underwriting profit on both a calendar year and accident year basis.New initiatives focused on short tail and specialty lines businesses,including financial institution professional liability,contingency risks,California DIC,property,non-standard auto and accident&health,have all contributed g

54、reatly to the improvement in this book.Notwithstanding severe widespread weather activity,we anticipate improved results for our crop book in 2015,with a larger and more diversified geographic footprint,and increased operating efficiencies derived from an updated systems infrastructure.We would expe

55、ct that this will add to the profitability of the insurance segment.In addition,we con-tinue to invest in talent and resources as we focus on expand-ing our product offerings and direct distribution capabilities to better position ourselves for future organic growth.SOUND FINANCIAL MANAGEMENT Our ba

56、lance sheet remains strong supported by a well-diver-sified,high quality investment portfolio and a very solid reserve position.During 2014,our investment portfolio gener-ated an overall pretax total return of 3.8%on beginning assets and provided$531 million of investment income,contributing to the

57、growth in our book value.The macroeconomic environment continues to be challeng-ing though as governments around the world target low inter-est rates and expansive monetary policy to stimulate economic recovery.Against these headwinds,investment returns remain under pressure with our current pretax

58、portfo-lio book yield now at 3.0%.As a result,we have allocated a portion of our investments to equities and limited partner-ships investments as a buffer to declining yields.We are also keeping our duration low to safeguard against the risk of ris-ing interest rates and our fixed income investment

59、strategy remains partly defensive as we focus on minimizing risk while preserving liquidity and yield.Given the low interest rate environment,we did find an oppor-tunity to issue$400 million of 4.868%30-year senior notes in 2014,with a portion of these proceeds utilized to redeem the$250 million 5.4

60、%senior notes that matured in October last year.Also,as previously noted,we sponsored three multi-year catastrophe bond issues raising$950 million of collater-alized capacity through our special purpose reinsurer,Kilimanjaro Re,at favorable rates.We are responsible stewards of capital and while we c

61、ontinue to pursue new opportunities for profitable growth,we are successfully leveraging alternative sources of lower cost cap-ital.Consequently,this frees up capital at Everest that can be returned to our shareholders.In 2014,we repurchased 3.2 million shares and increased our quarterly dividend by

62、 27%resulting in a return of almost$650 million of capital to share-holders.Since 2006,Everest has repurchased 36%of its out-standing shares and returned$3.41 billion of capital to its shareholders,both through dividends and share repurchases.At the same time,shareholders equity grew 46%from$5.1 bil

63、lion to$7.5 billion at year end 2014.Total capital grew 8.5%to$8.1 billion during 2014.Recently there has been a rash of announced M&A transactions;all focused on achieving greater scale and diversification,and improving expense efficiencies.Everest already possesses these attributes.Furthermore,whe

64、n considering the addi-tional capital available to Everest through Mt.Logan Re and the catastrophe bond issues,we have significant scale,oper-ating like a company with$10 billion of capacity.Everest can therefore focus its energies on the market and potential dislo-cation opportunities that may aris

65、e from consolidation.LOOKING AHEADOver our long history,Everest has generated strong returns for its shareholders through a variety of market challenges.As we look at 2015 and beyond,we are confident that we can continue to do so.Everest distinguishes itself through its peo-ple and the long standing

66、 relationships it holds with both its clients and its brokers.Able to balance nimbleness with disci-pline,Everest finds opportunities not readily apparent or available to many of our competitors.These attributes posi-tion Everest very well to continue to build on its successful track record.I would

67、like to thank our employees,whose dedication and diligence in executing our strategies is paramount to success,our Board of Directors for their invaluable insights and guid-ance,and our shareholders for their continued support.Sincerely,Dominic J.AddessoPresident and Chief Executive Officer8 Everest

68、 Re Group,Ltd.When considering the additional capital available to Everest through Mt.Logan Re and the catastrophe bond issues,we have significant scale,operating like a company with$10 billion of capacity.$10 billionEverest Reinsurance CompanyEverest National Insurance CompanyEverest Indemnity Insu

69、rance CompanyEverest Global Services,Inc.477 Martinsville RoadPO Box 830Liberty Corner,NJ 07938-0830Telephone:(908)604-3000Fax:(908)604-3322ATLANTAEverest National Insurance CompanyGlenridge Highlands One5555 Glenridge Connector,Suite 485Atlanta,GA 30342Phone:404-479-2000Fax:404-479-2100CHICAGOEvere

70、st Reinsurance CompanyEverest National Insurance Company250 South Wacker Drive,Suite 410Chicago,IL 60606Telephone:(312)660-0012Fax:(312)660-0032HARTFORDEverest National Insurance Company30 Tower Lane,4th FloorAvon,CT 06001Phone:860-321-7900Fax:860-404-5208INDIANAPOLISEverest Specialty Insurance Grou

71、pThe Congressional Building111 Congressional Boulevard,Suite 220Carmel,IN 46032Telephone:(317)853-7050Fax:(317)853-7052MIAMIEverest Reinsurance Company777 Brickell Avenue,Suite 700Miami,FL 33131Telephone:(305)371-8200Fax:(305)789-3936NEW YORKEverest Reinsurance CompanyEverest National Insurance Comp

72、any461 5th Avenue,4th&5th FloorsNew York,NY 10017-6234Telephone:(646)746-2700Fax:(646)746-2750NEW YORKEverest Specialty Underwriters,LLC 461 5th Avenue,20th FloorNew York,NY 10017-6234Telephone:(646)746-1990Fax:(646)746-1991OAKLANDEverest Reinsurance CompanyEverest National Insurance Company1111 Bro

73、adway,Suite 2050Oakland,CA 94607-4011Telephone:(510)273-4660Fax:(510)267-0751ORANGE COUNTYEverest National Insurance Company725 Town and Country Road,Suite 400Orange,CA 92868Telephone:(714)371-9600Fax:(714)371-9677TAMPAEverest Indemnity Insurance Company Highland Oaks Two10210 Highland Manor Drive,S

74、uite 200Tampa,FL 33610Telephone:(813)269-6970Fax:(813)269-6980TOPEKAHeartland Crop Insurance,Inc.PO Box 330120 SE 6th Avenue,Suite 2-210Topeka,KS 66601Telephone:(785)235-5566Fax:(785)235-5577BERMUDAEverest Re Group,Ltd.Everest Reinsurance(Bermuda),Ltd.Everest International Reinsurance,Ltd.Mt.Logan R

75、e,Ltd.Seon Place141 Front Street,4th FloorP.O.Box HM 845Hamilton,HM DX BermudaTelephone:(441)295-0006Fax:(441)295-4828BRUSSELSEverest Advisors(UK),Ltd.19 Avenue Emile De Mot Bte 5B-1000 Brussels,BelgiumTelephone:(32)2-639-6310Fax:(32)2-644-2457DUBLINEverest Reinsurance Company(Ireland),Limited5th Fl

76、oor,Hainault House69-71 St.Stephens GreenDublin 2,IrelandTelephone:(353)1-418-0300LONDONEverest Reinsurance(Bermuda),Ltd.Everest Advisors(UK),Ltd.40 Lime StreetLondon EC3M 5BS,EnglandTelephone:(44)207-450-4282Fax:(44)207-623-5967SO PAULOEverest Reinsurance CompanyEscritrio de Representao No Brasil L

77、tda.Av.Naes Unidas,12.3997 andarcj.75A04578-000-Brooklin PaulistaSo Paulo/SPBrasil04578-000Telephone:(55)11-5111-8292 SINGAPOREEverest Reinsurance Company1 Raffles Place#55-00One Raffles PlaceSingapore 048616Telephone:(65)6535-1121Fax:(65)6535-3363TORONTOEverest Reinsurance CompanyEverest Insurance

78、Company of CanadaThe Exchange Tower130 King Street West,Suite 2520Toronto,Ontario,Canada M5X 1E3Telephone:(416)862-1228Fax:(416)366-5899TORONTOEverest Insurance Company of CanadaPremiere Insurance Underwriting Services130 Bloor Street West,Suite 602Toronto,Ontario,Canada M5S 1N5Telephone:(416)487-39

79、00Fax:(416)487-0311United States&International OfficesEverest Re Group,Ltd.2014 form 10-K3-Everest_30717_14AR-FN.indd 13/19/15 2:06 PMUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10FORM 10-K K Annual Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act o

80、f 1934 For the fiscal year ended December 31,2014 Commission file number 1-15731 EVEREST RE GROUP,LTD.EVEREST RE GROUP,LTD.(Exact name of registrant as specified in its charter)BermudaBermuda 9898-03654320365432 (State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identifica

81、tion No.)Wessex House 2nd Floor 45 Reid Street PO Box HM 845 Hamilton HM DX,Bermuda 441-295-0006 (Address,including zip code,and telephone number,including area code,of registrants principal executive office)Securities registered pursuant to Section 12(b)of the Act:Title of Each Class Common Shares,

82、$.01 par value per share Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.YES X NO Indicate by check m

83、ark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.YES NO X Indicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or

84、for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.YES X NO Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Dat

85、a File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regul

86、ation S-K is not contained herein,and will not be contained,to the best of the registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accel

87、erated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company in Rule 12b-2 of the Exchange Act.Large accelerated filer X Accelerated filer Non-accelerated filer Smaller report

88、ing company (Do not check if smaller reporting company)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).YES NO X The aggregate market value on June 30,2014,the last business day of the registrants most recently completed second quarter,of

89、 the voting shares held by non-affiliates of the registrant was$7,332,951 thousand.At February 1,2015,the number of shares outstanding of the registrants common shares was 44,473,459.DOCUMENTS INCORPORATED BY REFERENCE Certain information required by Items 10,11,12,13 and 14 of Form 10-K is incorpor

90、ated by reference into Part III hereof from the registrants proxy statement for the 2014 Annual General Meeting of Shareholders,which will be filed with the Securities and Exchange Commission within 120 days of the close of the registrants fiscal year ended December 31,2014.EVEREST RE GROUP,LTDEVERE

91、ST RE GROUP,LTD TABLE OF CONTENTSTABLE OF CONTENTS FORM 10FORM 10-K K PagePage PART IPART I Item 1.Business 1 Item 1A.Risk Factors 27 Item 1B.Unresolved Staff Comments 39 Item 2.Properties 39 Item 3.Legal Proceedings 39 Item 4.Mine Safety Disclosures 39 PART IIPART II Item 5.Market for Registrants C

92、ommon Equity,Related Shareholder Matters and Issuer Purchases of Equity Securities 39 Item 6.Selected Financial Data 42 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A.Quantitative and Qualitative Disclosures About Market Risk 77 Item 8.Financia

93、l Statements and Supplementary Data 77 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 77 Item 9A.Controls and Procedures 77 Item 9B.Other Information 78 PART IIIPART III Item 10.Directors,Executive Officers and Corporate Governance 78 Item 11.Executive Co

94、mpensation 78 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 78 Item 13.Certain Relationships and Related Transactions,and Director Independence 78 Item 14.Principal Accountant Fees and Services 79 PART IVPART IV Item 15.Exhibits and Financial

95、Statement Schedules 79 PART IPART I Unless otherwise indicated,all financial data in this document have been prepared using accounting principles generally accepted in the United States of America(“GAAP”).As used in this document,“Group”means Everest Re Group,Ltd.;“Holdings Ireland”means Everest Und

96、erwriting Group(Ireland)Limited;“Ireland Re”means Everest Reinsurance Company(Ireland),Limited;“Holdings”means Everest Reinsurance Holdings,Inc.;“Everest Re”means Everest Reinsurance Company and its subsidiaries(unless the context otherwise requires);and the“Company”,“we”,“us”,and“our”means Everest

97、Re Group,Ltd.and its subsidiaries.ITEM 1.BUSINESSITEM 1.BUSINESS The Company.The Company.Group,a Bermuda company,was established in 1999 as a wholly-owned subsidiary of Holdings.On February 24,2000,a corporate restructuring was completed and Group became the new parent holding company of Holdings.Ho

98、ldings continues to be the holding company for the Companys U.S.based operations.Holders of shares of common stock of Holdings automatically became holders of the same number of common shares of Group.Prior to the restructuring,Group had no significant assets or capitalization and had not engaged in

99、 any business or prior activities other than in connection with the restructuring.In connection with the February 24,2000 restructuring,Group established a Bermuda-based reinsurance subsidiary,Everest Reinsurance(Bermuda),Ltd.(“Bermuda Re”),which commenced business in the second half of 2000.Group a

100、lso formed Everest Global Services,Inc.,a Delaware subsidiary,to perform administrative functions for Group and its U.S.based and non-U.S.based subsidiaries.On December 30,2008,Group contributed Holdings to its Irish holding company,Holdings Ireland.Holdings Ireland is a direct subsidiary of Group a

101、nd was established to serve as a holding company for the U.S.and Irish reinsurance and insurance subsidiaries.Holdings,a Delaware corporation,was established in 1993 to serve as the parent holding company of Everest Re,a Delaware property and casualty reinsurer formed in 1973.Until October 6,1995,Ho

102、ldings was an indirect wholly-owned subsidiary of The Prudential Insurance Company of America(“The Prudential”).On October 6,1995,The Prudential sold its entire interest in Holdings in an initial public offering.Effective February 27,2013,the Company established a new subsidiary,Mt.Logan Re Ltd.(“Mt

103、.Logan Re”)and effective July 1,2013,Mt.Logan Re established separate segregated accounts and issued non-voting redeemable preferred shares to capitalize the segregated accounts.Accordingly,the financial position and operating results for Mt.Logan Re are consolidated with the Company and the non-con

104、trolling interests in Mt.Logan Res operating results and equity are presented as separate captions in the Companys financial statements.The Companys principal business,conducted through its operating segments,is the underwriting of reinsurance and insurance in the U.S.,Bermuda and international mark

105、ets.The Company had gross written premiums,in 2014,of$5.7 billion with approximately 79%representing reinsurance and 21%representing insurance.Shareholders equity at December 31,2014 was$7.5 billion.The Company underwrites reinsurance both through brokers and directly with ceding companies,giving it

106、 the flexibility to pursue business based on the ceding companys preferred reinsurance purchasing method.The Company underwrites insurance principally through general agent relationships,brokers and surplus lines brokers.Groups active operating subsidiaries,excluding Mt.Logan Re and Mt.McKinley Insu

107、rance Company(“Mt.McKinley”),which is in run-off,are each rated A+(“Superior”)by A.M.Best Company(“A.M.Best”),a leading provider of insurer ratings that assigns financial strength ratings to insurance companies based on their ability to meet their obligations to policyholders.1 Following is a summar

108、y of the Companys principal operating subsidiaries:Bermuda Re,a Bermuda insurance company and a direct subsidiary of Group,is registered in Bermuda as a Class 4 insurer and long-term insurer and is authorized to write property and casualty and life and annuity business.Bermuda Re commenced business

109、in the second half of 2000.Bermuda Res UK branch writes property and casualty reinsurance to the United Kingdom and European markets.At December 31,2014,Bermuda Re had shareholders equity of$3.0 billion.Everest International Reinsurance,Ltd.(“Everest International”),a Bermuda insurance company and a

110、 direct subsidiary of Group,is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business.Through 2014,all of Everest Internationals business has been inter-affiliate quota share reinsurance assumed from Everest Re,the UK branch of Bermuda Re and Ireland Re.

111、At December 31,2014,Everest International had shareholders equity of$417.6 million.Mt.Logan Re,a Bermuda insurance company and a direct subsidiary of Group,is registered in Bermuda as a Class 3 insurer and is authorized to write property and casualty reinsurance.Through 2014,all of Mt.Logan Res busi

112、ness has been inter-affiliate reinsurance assumed from Everest Re,the UK branch of Bermuda Re and Ireland Re,and all business has been written through segregated cells.At December 31,2014,Mt.Logan Re had shareholders equity of$487.8 million.Ireland Re,an Ireland reinsurance company and an indirect s

113、ubsidiary of Group,is licensed to write non-life reinsurance,both directly and through brokers,for the London and European markets.Everest Re,a Delaware insurance company and a direct subsidiary of Holdings,is a licensed property and casualty insurer and/or reinsurer in all states,the District of Co

114、lumbia and Puerto Rico and is authorized to conduct reinsurance business in Canada,Singapore and Brazil.Everest Re underwrites property and casualty reinsurance for insurance and reinsurance companies in the U.S.and international markets.At December 31,2014,Everest Re had statutory surplus of$2.9 bi

115、llion.Everest Insurance Company of Canada(“Everest Canada”),a Canadian insurance company and direct subsidiary of Holdings Ireland,is licensed to write property and casualty insurance in all Canadian provinces.Everest National Insurance Company(“Everest National”),a Delaware insurance company and a

116、direct subsidiary of Everest Re,is licensed in 50 states and the District of Columbia and is authorized to write property and casualty insurance on an admitted basis in the jurisdictions in which it is licensed.The majority of Everest Nationals business is reinsured by its parent,Everest Re.Everest

117、Indemnity Insurance Company(“Everest Indemnity”),a Delaware insurance company and a direct subsidiary of Everest Re,writes excess and surplus lines insurance business in the U.S.on a non-admitted basis.Excess and surplus lines insurance is specialty property and liability coverage that an insurer no

118、t licensed to write insurance in a particular jurisdiction is permitted to provide to insureds when the specific specialty coverage is unavailable from admitted insurers.Everest Indemnity is licensed in Delaware and is eligible to write business on a non-admitted basis in all other states,the Distri

119、ct of Columbia and Puerto Rico.The majority of Everest Indemnitys business is reinsured by its parent,Everest Re.Everest Security Insurance Company(“Everest Security”),a Georgia insurance company and a direct subsidiary of Everest Re,writes property and casualty insurance on an admitted basis in Geo

120、rgia and Alabama.The majority of Everest Securitys business is reinsured by its parent,Everest Re.Mt.McKinley,a Delaware insurance company and a direct subsidiary of Holdings,was acquired by Holdings in September 2000 from The Prudential.In 1985,Mt.McKinley ceased writing new and renewal insurance a

121、nd commenced a run-off operation to service claims arising from its previously written business.Effective September 19,2000,Mt.McKinley and Bermuda Re entered into a loss portfolio transfer reinsurance agreement,whereby Mt.McKinley transferred,for arms-length consideration,all of its net insurance e

122、xposures and reserves to Bermuda Re.2 Heartland Crop Insurance,Inc.(“Heartland”),a Kansas based managing general agent and a direct subsidiary of Holdings,was acquired on January 2,2011.Heartland specializes in crop insurance,which is written mainly through Everest National.ReinsurReinsurance Indust

123、ry Overview.ance Industry Overview.Reinsurance is an arrangement in which an insurance company,the reinsurer,agrees to indemnify another insurance or reinsurance company,the ceding company,against all or a portion of the insurance risks underwritten by the ceding company under one or more insurance

124、contracts.Reinsurance can provide a ceding company with several benefits,including a reduction in its net liability on individual risks or classes of risks,catastrophe protection from large and/or multiple losses and/or a reduction in operating leverage as measured by the ratio of net premiums and r

125、eserves to capital.Reinsurance also provides a ceding company with additional underwriting capacity by permitting it to accept larger risks and write more business than would be acceptable relative to the ceding companys financial resources.Reinsurance does not discharge the ceding company from its

126、liability to policyholders;rather,it reimburses the ceding company for covered losses.There are two basic types of reinsurance arrangements:treaty and facultative.Treaty reinsurance obligates the ceding company to cede and the reinsurer to assume a specified portion of a type or category of risks in

127、sured by the ceding company.Treaty reinsurers do not separately evaluate each of the individual risks assumed under their treaties,instead,the reinsurer relies upon the pricing and underwriting decisions made by the ceding company.In facultative reinsurance,the ceding company cedes and the reinsurer

128、 assumes all or part of the risk under a single insurance contract.Facultative reinsurance is negotiated separately for each insurance contract that is reinsured.Facultative reinsurance,when purchased by ceding companies,usually is intended to cover individual risks not covered by their reinsurance

129、treaties because of the dollar limits involved or because the risk is unusual.Both treaty and facultative reinsurance can be written on either a pro rata basis or an excess of loss basis.Under pro rata reinsurance,the ceding company and the reinsurer share the premiums as well as the losses and expe

130、nses in an agreed proportion.Under excess of loss reinsurance,the reinsurer indemnifies the ceding company against all or a specified portion of losses and expenses in excess of a specified dollar amount,known as the ceding companys retention or reinsurers attachment point,generally subject to a neg

131、otiated reinsurance contract limit.In pro rata reinsurance,the reinsurer generally pays the ceding company a ceding commission.The ceding commission generally is based on the ceding companys cost of acquiring the business being reinsured(commissions,premium taxes,assessments and miscellaneous admini

132、strative expense and may contain profit sharing provisions,whereby the ceding commission is adjusted based on loss experience).Premiums paid by the ceding company to a reinsurer for excess of loss reinsurance are not directly proportional to the premiums that the ceding company receives because the

133、reinsurer does not assume a proportionate risk.There is usually no ceding commission on excess of loss reinsurance.Reinsurers may purchase reinsurance to cover their own risk exposure.Reinsurance of a reinsurers business is called a retrocession.Reinsurance companies cede risks under retrocessional

134、agreements to other reinsurers,known as retrocessionaires,for reasons similar to those that cause insurers to purchase reinsurance:to reduce net liability on individual or classes of risks,protect against catastrophic losses,stabilize financial ratios and obtain additional underwriting capacity.Rein

135、surance can be written through intermediaries,generally professional reinsurance brokers,or directly with ceding companies.From a ceding companys perspective,the broker and the direct distribution channels have advantages and disadvantages.A ceding companys decision to select one distribution channe

136、l over the other will be influenced by its perception of such advantages and disadvantages relative to the reinsurance coverage being placed.3 Business Strategy.Business Strategy.The Companys business strategy is to sustain its leadership position within targeted reinsurance and insurance markets,pr

137、ovide effective management throughout the property and casualty underwriting cycle and thereby achieve an attractive return for its shareholders.The Companys underwriting strategies seek to capitalize on its i)financial strength and capacity,ii)global franchise,iii)stable and experienced management

138、team,iv)diversified product and distribution offerings,v)underwriting expertise and disciplined approach,vi)efficient and low-cost operating structure and vii)effective enterprise risk management practices.The Company offers treaty and facultative reinsurance and admitted and non-admitted insurance.

139、The Companys products include the full range of property and casualty reinsurance and insurance coverages,including marine,aviation,surety,errors and omissions liability(“E&O”),directors and officers liability(“D&O”),medical malpractice,other specialty lines,accident and health(“A&H”)and workers com

140、pensation.The Companys underwriting strategies emphasizes underwriting profitability over premium volume.Key elements of this strategy include careful risk selection,appropriate pricing through strict underwriting discipline and adjustment of the Companys business mix in response to changing market

141、conditions.The Company focuses on reinsuring companies that effectively manage the underwriting cycle through proper analysis and pricing of underlying risks and whose underwriting guidelines and performance are compatible with its objectives.The Companys underwriting strategies emphasize flexibilit

142、y and responsiveness to changing market conditions.The Company believes that its existing strengths,including its broad underwriting expertise,global presence,strong financial ratings and substantial capital,facilitate adjustments to its mix of business geographically,by line of business and by type

143、 of coverage,allowing it to participate in those market opportunities that provide the greatest potential for underwriting profitability.The Companys insurance operations complement these strategies by accessing business that is not available on a reinsurance basis.The Company carefully monitors its

144、 mix of business across all operations to avoid unacceptable geographic or other risk concentrations.Marketing.Marketing.The Company writes business on a worldwide basis for many different customers and lines of business,thereby obtaining a broad spread of risk.The Company is not substantially depen

145、dent on any single customer,small group of customers,line of business or geographic area.For the 2014 calendar year,no single customer(ceding company or insured)generated more than 3%of the Companys gross written premiums.The Company believes that a reduction of business from any one customer would

146、not have a material adverse effect on its future financial condition or results of operations.Approximately 65%,21%and 14%of the Companys 2014 gross written premiums were written in the broker reinsurance,insurance markets and direct reinsurance,respectively.The broker reinsurance market consists of

147、 several substantial national and international brokers and a number of smaller specialized brokers.Brokers do not have the authority to bind the Company with respect to reinsurance agreements,nor does the Company commit in advance to accept any portion of a brokers submitted business.Reinsurance bu

148、siness from any ceding company,whether new or renewal,is subject to acceptance by the Company.Brokerage fees are generally paid by reinsurers.The Companys ten largest brokers accounted for an aggregate of approximately 60%of gross written premiums in 2014.The largest broker,Marsh and McLennan,accoun

149、ts for approximately 23%of gross written premiums.The second largest broker,Aon Benfield Re,accounted for approximately 20%of gross written premiums.The Company believes that a reduction of business assumed from any one broker would not have a material adverse effect on the Company.The direct reinsu

150、rance market remains an important distribution channel for reinsurance business written by the Company.Direct placement of reinsurance enables the Company to access clients who prefer to place their reinsurance directly with reinsurers based upon the reinsurers in-depth understanding of the ceding c

151、ompanys needs.4 The Companys insurance business writes direct business targeting commercial,property and casualty.It also writes business through general agents,brokers and surplus lines brokers.In 2014,Arrowhead General Insurance Agency accounted for approximately 5%of the Companys gross written pr

152、emium.No other single general agent generated more than 3%of the Companys gross written premiums.The Company continually evaluates each business relationship,including the underwriting expertise and experience brought to bear through the involved distribution channel,performs analyses to evaluate fi

153、nancial security,monitors performance and adjusts underwriting decisions accordingly.Segment Results.Segment Results.The U.S.Reinsurance operation writes property and casualty reinsurance and specialty lines of business,including Marine,Aviation,Surety and A&H business,on both a treaty and facultati

154、ve basis,through reinsurance brokers,as well as directly with ceding companies primarily within the U.S.The International operation writes foreign property and casualty reinsurance through Everest Res branches in Canada and Singapore and through offices in Brazil,Miami and New Jersey.The Bermuda ope

155、ration provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re.The Insurance operation writes property and

156、casualty insurance directly and through general agents,brokers and surplus lines brokers within the U.S.and Canada.The Mt.Logan Re segment represents business written for the segregated accounts of Mt.Logan Re,which were formed on July 1,2013.The Mt.Logan Re business represents a diversified set of

157、catastrophe exposures,diversified by risk/peril and across different geographical regions globally.These segments,with the exception of Mt.Logan Re,are managed independently,but conform with corporate guidelines with respect to pricing,risk management,control of aggregate catastrophe exposures,capit

158、al,investments and support operations.Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.The Mt.Logan Re segment is managed independently and seeks to write a diverse portfolio of catastrophe risks for each segregat

159、ed account to achieve desired risk and return criteria.Underwriting results include earned premium less losses and loss adjustment expenses(“LAE”)incurred,commission and brokerage expenses and other underwriting expenses.We measure our underwriting results using ratios,in particular loss,commission

160、and brokerage and other underwriting expense ratios,which,respectively,divide incurred losses,commissions and brokerage and other underwriting expenses by premiums earned.Mt.Logan Res business is sourced through operating subsidiaries of the Company;however,the activity is only reflected in the Mt.L

161、ogan Re segment.For other inter-affiliate reinsurance,business is generally reported within the segment in which the business was first produced,consistent with how the business is managed.Except for Mt.Logan Re,the Company does not maintain separate balance sheet data for its operating segments.Acc

162、ordingly,the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.Underwriting results include earned premium less losses and loss adjustment expenses(“LAE”)incurred,commission and brokerage expenses and other underwriting expenses.Underw

163、riting results are measured using ratios,in particular loss,commission and brokerage and other underwriting expense ratios,which,respectively,divide incurred losses,commissions and brokerage and other underwriting expenses by premiums earned.The Company utilizes inter-affiliate reinsurance,although

164、such reinsurance does not materially impact segment results,as business is generally reported within the segment in which the business was first produced.For selected financial information regarding these segments,see ITEM 8,“Financial Statements and Supplementary Data”-Note 20 of Notes to Consolida

165、ted Financial Statements and ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operation-Segment Results”.5 Underwriting Operations.Underwriting Operations.The following five year table presents the distribution of the Companys gross written premiums by its segments:U

166、.S.Reinsurance,International,Bermuda,Insurance and Mt.Logan Re.The premiums for each segment are further split between property and casualty business and,for reinsurance business,between pro rata or excess of loss business:Gross Written Premiums by SegmentYears Ended December 31,(Dollars in millions

167、)20142013201220112010U.S.ReinsuranceU.S.ReinsurancePropertyPro Rata(1)665.7$11.6%631.2$12.1%313.2$7.3%594.9$13.9%698.2$16.6%Excess772.6 13.4%631.7 12.1%534.8 12.4%380.6 8.9%315.9 7.5%CasualtyPro Rata(1)382.4 6.7%342.5 6.6%273.6 6.3%215.5 5.0%200.0 4.8%Excess218.8 3.8%204.4 3.9%189.1 4.4%155.8 3.6%18

168、1.3 4.3%Total(2)2,039.6 35.5%1,809.7 34.7%1,310.7 30.4%1,346.8 31.4%1,395.4 33.2%International International PropertyPro Rata(1)846.0 14.7%673.4 12.9%630.9 14.6%713.0 16.6%701.6 16.7%Excess467.0 8.1%426.5 8.2%365.9 8.5%315.7 7.4%291.6 6.9%CasualtyPro Rata(1)152.9 2.7%134.4 2.6%102.6 2.4%122.2 2.9%12

169、0.3 2.9%Excess116.5 2.0%111.5 2.1%92.9 2.2%87.6 2.0%93.4 2.2%Total(2)1,582.4 27.5%1,345.8 25.8%1,192.3 27.7%1,238.4 28.9%1,207.0 28.7%BermudaBermudaPropertyPro Rata(1)252.4 4.4%244.6 4.7%208.3 4.8%213.2 5.0%226.1 5.4%Excess167.7 2.9%161.5 3.1%145.1 3.4%162.6 3.8%173.5 4.1%CasualtyPro Rata(1)178.5 3.

170、1%213.9 4.1%228.9 5.3%204.9 4.8%205.0 4.9%Excess171.7 3.0%154.2 3.0%152.1 3.5%144.5 3.4%128.4 3.1%Total(2)770.3 13.5%774.3 14.9%734.4 17.1%725.3 17.0%733.0 17.5%Total ReinsuranceTotal ReinsurancePropertyPro Rata(1)1,764.1 30.7%1,549.2 29.7%1,152.4 26.7%1,521.1 35.5%1,625.9 38.7%Excess1,407.3 24.5%1,

171、219.7 23.4%1,045.8 24.3%858.9 20.0%781.0 18.6%CasualtyPro Rata(1)713.8 12.4%690.7 13.2%605.1 14.0%542.6 12.7%525.3 12.5%Excess507.0 8.8%470.1 9.0%434.1 10.1%387.9 9.0%403.1 9.6%Total(2)4,392.3 76.4%3,929.7 75.3%3,237.4 75.1%3,310.6 77.2%3,335.3 79.4%InsuranceInsurancePropertyPro Rata(1)414.0 7.2%545

172、.6 10.5%459.2 10.7%341.9 8.0%130.1 3.1%Excess-0.0%-0.0%-0.0%-0.0%-0.0%CasualtyPro Rata(1)804.4 14.0%723.2 13.9%613.9 14.2%633.8 14.8%735.4 17.5%Excess-0.0%-0.0%-0.0%-0.0%-0.0%Total(2)1,218.4 21.2%1,268.7 24.3%1,073.1 24.9%975.6 22.8%865.4 20.6%Mt.Logan ReMt.Logan RePropertyPro Rata(1)-0.0%-0.0%-Exce

173、ss138.4 2.4%20.2 0.4%-CasualtyPro Rata(1)-0.0%-0.0%-Excess-0.0%-0.0%-Total(2)138.4 2.4%20.2 0.4%-Total CompanyTotal CompanyPropertyPro Rata(1)2,178.1 37.9%2,094.8 40.1%1,611.6 37.4%1,863.0 43.5%1,756.0 41.8%Excess1,545.6 26.9%1,239.9 23.8%1,045.8 24.3%858.9 20.0%781.0 18.6%CasualtyPro Rata(1)1,518.2

174、 26.4%1,413.9 27.1%1,219.1 28.3%1,176.3 27.4%1,260.6 30.0%Excess507.0 8.8%470.1 9.0%434.1 10.1%387.9 9.1%403.1 9.6%Total(2)5,749.0$100.0%5,218.6$100.0%4,310.5$100.0%4,286.2$100.0%4,200.7$100.0%_(1)For purposes of the presentation above,pro rata includes all insurance and reinsurance attaching to the

175、 first dollar of loss incurred by the ceding company.(2)Certain totals and subtotals may not reconcile due to rounding.U.S.Reinsurance Segment.The Companys U.S.Reinsurance segment writes property and casualty reinsurance and specialty lines of business,including Marine,Aviation,Surety and A&H busine

176、ss,on both a treaty and facultative basis,through reinsurance brokers,as well as directly with ceding companies within the U.S.The marine and aviation business is written primarily through brokers and contains a significant international component.Surety business consists mainly of reinsurance of co

177、ntract surety bonds.The Company targets certain brokers and,through the broker market,specialty companies and small to medium sized standard lines companies.The Company also targets companies that place their business predominantly in the direct market,including small to medium sized regional ceding

178、 companies,and seeks 6 to develop long-term relationships with those companies.In addition,the U.S.Reinsurance segment writes portions of reinsurance programs for large,national insurance companies.In 2014,$1,229.7 million of gross written premiums were attributable to U.S.treaty property business,o

179、f which 55.1%was written on an excess of loss basis and 44.9%was written on a pro rata basis.The Companys property underwriters utilize sophisticated underwriting methods to analyze and price property business.The Company manages its exposures to catastrophe and other large losses by limiting exposu

180、res on individual contracts and limiting aggregate exposures to catastrophes in any particular zone and across contiguous zones.U.S.treaty casualty business accounted for$518.7 million of gross written premiums in 2014,of which 69.0%was written on a pro rata basis and 31.0%was written on an excess o

181、f loss basis.The treaty casualty business consists of professional liability,D&O liability,workers compensation,excess and surplus lines and other liability coverages.As a result of the complex technical nature of most of these risks,the Companys casualty underwriters tend to specialize by line of b

182、usiness and work closely with the Companys pricing actuaries.The Companys facultative unit conducts business both through brokers and directly with ceding companies,and consists of three underwriting units representing property,casualty,and national brokerage lines of business.Business is written fr

183、om a facultative headquarters office in New York and satellite offices in Chicago and Oakland.In 2014,$55.1 million,$39.2 million and$16.2 million of gross written premiums were attributable to the casualty,property and national brokerage lines of business,respectively.The marine and aviation units

184、2014 gross written premiums totaled$105.4 million,substantially all of which was written on a treaty basis and sourced through reinsurance brokers.Of the marine and aviation gross written premiums in 2014,marine treaties represented 73.9%and consisted mainly of hull and cargo coverage.In 2014,the ma

185、rine units premiums were written 57.4%on a pro rata basis and 42.6%on an excess of loss basis.Of the marine and aviation gross written premiums in 2014,aviation premiums accounted for 26.1%and included reinsurance of airline and general aviation risks.In 2014,the aviation units premiums were written

186、 89.7%on a pro rata basis and 10.3%on an excess of loss basis.In 2014,gross written premiums of the surety unit totaled$48.7 million,88.6%of which was written on a pro rata basis.Most of the portfolio is reinsurance of contract surety bonds written directly with ceding companies,with the remainder b

187、eing trade credit reinsurance,mostly in international markets.In 2014,gross written premium of the A&H reinsurance unit totaled$26.5 million,written through brokers.In 2014,95.2%and 4.8%of the U.S.Reinsurance segments gross written premiums were written in the broker reinsurance and direct reinsuran

188、ce markets,respectively.International Segment.The Companys International segment focuses on opportunities in the international reinsurance markets.The Company targets several international markets,including:Canada,with a branch in Toronto;Asia,with a branch in Singapore;and Latin America,Brazil,Afri

189、ca and the Middle East,which business is serviced from Everest Res Miami and New Jersey offices.The Company also writes from New Jersey“home-foreign”business,which provides reinsurance on the international portfolios of U.S.insurers.Of the Companys 2014 international gross written premiums,83.0%repr

190、esented property business,while 17.0%represented casualty business.As with its U.S.operations,the Companys International segment focuses on financially sound companies that have strong management and underwriting discipline and expertise.Of the Companys international business,60.1%was written throug

191、h brokers,with 39.9%written directly with ceding companies.Gross written premiums of the Companys Canadian branch totaled$154.6 million in 2014 and consisted of 40.4%of excess property business,35.3%of excess casualty business,14.3%of pro rata casualty business and 10.0%of pro rata property business

192、.Of the Canadian gross written premiums,83.8%consisted of treaty reinsurance,while 16.2%was facultative reinsurance.7 The Companys Singapore branch covers the Asian markets and accounted for$227.9 million of gross written premiums in 2014 and consisted of 49.0%of excess property business,48.1%of pro

193、 rata property business,1.6%of pro rata casualty business and 1.3%of excess casualty business.International business written out of Everest Res Miami and New Jersey offices accounted for$1,199.9 million of gross written premiums in 2014 and consisted of 59.9%of pro rata treaty property business,21.0

194、%of excess treaty property business,10.6%of pro rata treaty casualty business,2.6%of excess treaty casualty business and 5.9%of facultative property and casualty business.Of this international business,74.3%was sourced from Latin America,11.2%was sourced from the Middle East,5.9%was sourced from Afr

195、ica and 8.6%was home-foreign business.Bermuda Segment.The Companys Bermuda segment writes property and casualty reinsurance through Bermuda Re and property and casualty reinsurance through its UK branch as well as through Ireland Re.In 2014,Bermuda Re had gross written premiums of$392.4 million,virt

196、ually all of which was treaty reinsurance.In 2014,the UK branch of Bermuda Re wrote$257.4 million of gross treaty reinsurance premium consisting of 43.2%of excess casualty business,12.3%of pro rata casualty business,25.0%of excess property business and 19.5%of pro rata property business.In 2014,Irel

197、and Re wrote$120.5 million of gross treaty reinsurance premium consisting of 39.7%of pro rata property business,30.9%of excess property business,19.6%of pro rata casualty business and 9.8%of excess casualty business.Insurance Segment.The Insurance segment writes property and casualty insurance,inclu

198、ding medical stop loss insurance,directly and through general agents,brokers and surplus lines brokers within the U.S.and Canada.In 2014,the Companys Insurance segment wrote$1,218.4 million of gross written premiums,of which 66.0%was casualty and 34.0%was property,principally targeting commercial pr

199、operty and casualty business.Business written through general agents with program administrators represented 44.0%of the premium with the remainder written directly through the Companys offices.Workers compensation business accounted for$384.5 million,or 31.6%of the total business written,which incl

200、uded$307.5 million,or 80%,of workers compensation business written in California.In addition,professional liability business written was$240.9 million,crop insurance business written was$163.7 million;other short-tail/package business written was$144.3 million;other liability business written was$12

201、9.2 million;A&H insurance business written was$81.2 million;and non-standard auto insurance business written through retail agents was$74.6 million.With respect to insurance written through general agents and surplus lines brokers,the Company supplements the initial underwriting process with periodi

202、c claims,underwriting and operational reviews and ongoing monitoring.Mt.Logan Re Segment.The Mt.Logan Re segment represents business written for the segregated accounts of Mt.Logan Re,which were formed on July 1,2013.The Mt.Logan Re business represents a diversified set of catastrophe exposures,dive

203、rsified by risk/peril and across different geographical regions globally.Mt.Logan Res business is sourced through operating subsidiaries of the Company;however,the activity is only reflected in the Mt.Logan Re segment.For other inter-affiliate reinsurance,business is generally reported within the se

204、gment in which the business was first produced,consistent with how the business is managed.Gross written premium for 2014 was$138.4 million.Geographic Areas.The Company conducts its business in Bermuda,the U.S.and a number of foreign countries.For select financial information about geographic areas,

205、see ITEM 8,“Financial Statements and Supplementary Data”-Note 20 of Notes to the Consolidated Financial Statements.Risks attendant to the foreign operations of the Company parallel those attendant to the U.S.operations of the Company,with the primary exception of foreign exchange risks.For more info

206、rmation about the risks,see ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Safe Harbor Disclosure”.8 Underwriting.Underwriting.One of the Companys strategies is to lead as many of the reinsurance treaties it underwrites as possible.The Company leads on a

207、pproximately two-thirds of its treaty reinsurance business as measured by premium.The lead reinsurer on a treaty generally accepts one of the largest percentage shares of the treaty and is in the strongest position to negotiate price,terms and conditions.Management believes this strategy enables it

208、to obtain more favorable terms and conditions on the treaties on which it participates.When the Company does not lead the treaty,it may still suggest changes to any aspect of the treaty.The Company may decline to participate on a treaty based upon its assessment of all relevant factors.The Companys

209、treaty underwriting process involves a team approach among the Companys underwriters,actuaries and claim staff.Treaties are reviewed for compliance with the Companys general underwriting standards and most larger treaties are subjected to detailed actuarial analysis.The actuarial models used in such

210、 analyses are tailored in each case to the subject exposures and loss experience.The Company does not separately evaluate each of the individual risks assumed under its treaties.The Company does,however,evaluate the underwriting guidelines of its ceding companies to determine their adequacy prior to

211、 entering into a treaty.The Company may also conduct underwriting,operational and claim audits at the offices of ceding companies to monitor adherence to underwriting guidelines.Underwriting audits focus on the quality of the underwriting staff,pricing and risk selection and rate monitoring over tim

212、e.Claim audits may be performed in order to evaluate the clients claims handling abilities and practices.The Companys facultative underwriters operate within guidelines specifying acceptable types of risks,limits and maximum risk exposures.Specified classes of large premium U.S.risks are referred to

213、 Everest Res New York facultative headquarters for specific review before premium quotations are given to clients.In addition,the Companys guidelines require certain types of risks to be submitted for review because of their aggregate limits,complexity or volatility,regardless of premium amount on t

214、he underlying contract.Non-U.S.risks exhibiting similar characteristics are reviewed by senior managers within the involved operations.In addition to its own underwriting staff,the Companys insurance operations write casualty coverages for homogeneous risks through select program managers.These prog

215、rams are evaluated based upon actuarial analysis and the program managers capabilities.The Companys rates,forms and underwriting guidelines are tailored to specific risk types.The Companys underwriting,actuarial,claim and financial functions work closely with its program managers to establish approp

216、riate underwriting and processing guidelines as well as appropriate performance monitoring mechanisms.Risk Management oRisk Management of Underwriting and Retrocession Arrangementsf Underwriting and Retrocession Arrangements Underwriting Risk and Accumulation Controls.Each segment and business unit

217、manages its underwriting risk in accordance with established guidelines.These guidelines place dollar limits on the amount of business that can be written based on a variety of factors,including ceding company profile,line of business,geographic location and risk hazards.In each case,the guidelines

218、permit limited exceptions,which must be authorized by the Companys senior management.Management regularly reviews and revises these guidelines in response to changes in business unit market conditions,risk versus reward analyses and the Companys enterprise and underwriting risk management processes.

219、The operating results and financial condition of the Company can be adversely affected by catastrophe and other large losses.The Company manages its exposure to catastrophes and other large losses by:selective underwriting practices;diversifying its risk portfolio by geographic area and by types and

220、 classes of business;limiting its aggregate catastrophe loss exposure in any particular geographic zone and contiguous zones;purchasing reinsurance and/or retrocessional protection to the extent that such coverage can be secured cost-effectively.See“Reinsurance and Retrocession Arrangements”.9 Like

221、other insurance and reinsurance companies,the Company is exposed to multiple insured losses arising out of a single occurrence,whether a natural event,such as a hurricane or an earthquake,or other catastrophe,such as an explosion at a major factory.A large catastrophic event can be expected to gener

222、ate insured losses to multiple reinsurance treaties,facultative certificates and direct insurance policies across various lines of business.The Company focuses on potential losses that could result from any single event or series of events as part of its evaluation and monitoring of its aggregate ex

223、posures to catastrophic events.Accordingly,the Company employs various techniques to estimate the amount of loss it could sustain from any single catastrophic event or series of events in various geographic areas.These techniques range from deterministic approaches,such as tracking aggregate limits

224、exposed in catastrophe-prone zones and applying reasonable damage factors,to modeled approaches that attempt to scientifically measure catastrophe loss exposure using sophisticated Monte Carlo simulation techniques that forecast frequency and severity of potential losses on a probabilistic basis.No

225、single computer model,or group of models,is currently capable of projecting the amount and probability of loss in all global geographic regions in which the Company conducts business.In addition,the form,quality and granularity of underwriting exposure data furnished by ceding companies is not unifo

226、rmly compatible with the data requirements for the Companys licensed models,which adds to the inherent imprecision in the potential loss projections.Further,the results from multiple models and analytical methods must be combined to estimate potential losses by and across business units.Also,while m

227、ost models have been updated to incorporate claims information from recent catastrophic events,catastrophe model projections are still inherently imprecise.In addition,uncertainties with respect to future climatic patterns and cycles could add further uncertainty to loss projections from models base

228、d on historical data.Nevertheless,when combined with traditional risk management techniques and sound underwriting judgment,catastrophe models are a useful tool for underwriters to price catastrophe exposed risks and for providing management with quantitative analyses with which to monitor and manag

229、e catastrophic risk exposures by zone and across zones for individual and multiple events.Projected catastrophe losses are generally summarized in terms of the probable maximum loss(“PML”).The Company defines PML as its anticipated loss,taking into account contract terms and limits,caused by a singl

230、e catastrophe affecting a broad contiguous geographic area,such as that caused by a hurricane or earthquake.The PML will vary depending upon the modeled simulated losses and the make-up of the in force book of business.The projected severity levels are described in terms of“return periods”,such as“1

231、00-year events”and“250-year events”.For example,a 100-year PML is the estimated loss to the current in-force portfolio from a single event which has a 1%probability of being exceeded in a twelve month period.In other words,it corresponds to a 99%probability that the loss from a single event will fal

232、l below the indicated PML.It is important to note that PMLs are estimates.Modeled events are hypothetical events produced by a stochastic model.As a result,there can be no assurance that any actual event will align with the modeled event or that actual losses from events similar to the modeled event

233、s will not vary materially from the modeled event PML.From an enterprise risk management perspective,management sets limits on the levels of catastrophe loss exposure the Company may underwrite.The limits are revised periodically based on a variety of factors,including but not limited to the Company

234、s financial resources and expected earnings and risk/reward analyses of the business being underwritten.The Company may purchase reinsurance to cover specific business written or the potential accumulation or aggregation of exposures across some or all of its operations.Reinsurance purchasing decisi

235、ons consider both the potential coverage and market conditions including the pricing,terms,conditions and availability of coverage,with the aim of securing cost effective protection.The amount of reinsurance purchased has varied over time,reflecting the Companys view of its exposures and the cost of

236、 reinsurance.10 Management estimates that the projected net economic loss from its largest 100-year event in a given zone represents approximately 11%of its projected 2015 shareholders equity.Economic loss is the PML exposure,net of third party reinsurance and the noncontrolling interests of Mt.Loga

237、n Re,reduced by estimated reinstatement premiums to renew coverage and estimated income taxes.The impact of income taxes on the PML depends on the distribution of the losses by corporate entity,which is also affected by inter-affiliate reinsurance.Management also monitors and controls its largest PM

238、Ls at multiple points along the loss distribution curve,such as loss amounts at the 20,50,100,250,500 and 1,000 year return periods.This process enables management to identify and control exposure accumulations and to integrate such exposures into enterprise risk,underwriting and capital management

239、decisions.The Companys catastrophe loss projections,segmented by risk zones,are updated quarterly and reviewed as part of a formal risk management review process.The table below reflects the Companys PML exposure,net of third party reinsurance and the noncontrolling interests of Mt.Logan Re,at vario

240、us return periods for its top three zones/perils(as ranked by the largest 1 in 100 year events)based on loss projection data as of January 1,2015:Return Periods(in years)1 in 201 in 501 in 1001 in 2501 in 5001 in 1,000Exceeding Probability5.0%2.0%1.0%0.4%0.2%0.1%(Dollars in millions)Zone/PerilSouthe

241、ast U.S.,Wind665$1,075$1,371$1,799$2,045$2,258$California,Earthquake142 473 864 1,256 1,615 1,939 Texas,Wind139 402 743 1,450 1,934 2,190 The projected net economic losses for the top three zones/perils scheduled above are as follows:Return Periods(in years)1 in 201 in 501 in 1001 in 2501 in 5001 in

242、 1,000Exceeding Probability5.0%2.0%1.0%0.4%0.2%0.1%(Dollars in millions)Zone/PerilSoutheast U.S.,Wind408$638$852$1,083$1,243$1,396$California,Earthquake116 350 596 846 1,080 1,291 Texas,Wind107 296 509 952 1,260 1,438 The Company believes that its methods of monitoring,analyzing and managing catastr

243、ophe exposures provide a credible risk management framework,which is integrated with its enterprise risk management,underwriting and capital management plans.However,there is much uncertainty and imprecision inherent in the catastrophe models and the catastrophe loss estimation process generally.As

244、a result,there can be no assurance that the Company will not experience losses from individual events that exceed the PML or other return period projections,perhaps by a material amount.Nor can there be assurance that the Company will not experience events impacting multiple zones,or multiple severe

245、 events that could,in the aggregate,exceed the Companys PML expectations by a significant amount.Terrorism Risk.While the Company writes some reinsurance contracts covering terrorism,the Companys risk management philosophy is to limit the amount of exposure by geographic region,and to strictly manag

246、e coverage for properties in areas that may be considered a target for terrorists.Providing terrorism coverage on reinsurance contracts is negotiable,and many,but not all,treaties exclude this coverage.Most insurance policies however mandate inclusion of terrorism coverage.As a result,the Company is

247、 exposed to losses from terrorism on both its reinsurance and its insurance book of business,particularly its workers compensation and property policies.However,the insurance book generally does not insure large corporations or corporate locations that represent large concentrations of risk.The U.S.

248、Terrorism Risk Insurance Program Reauthorization Act of 2015 could provide some protection to the insurance book of business.It might also provide indirect protection to exposed reinsurance treaties.However,the Company is still exposed to risk of loss from terrorism due to deductibles,co-pays and un

249、covered lines of business.11 Reinsurance and Retrocession Arrangements.The Company may purchase reinsurance to cover specific business written or the potential accumulation or aggregation of exposures across some or all of its operations.Reinsurance purchasing decisions consider both the potential c

250、overage and market conditions including the pricing,terms,conditions and availability of coverage,with the aim of securing cost effective protection.The amount of reinsurance purchased has varied over time,reflecting the Companys view of its exposures and the cost of reinsurance.In recent years,the

251、Company has increased its use of reinsurance offered through capital market facilities.The Company participates in“common account”retrocessional arrangements for certain reinsurance treaties whereby a ceding company purchases reinsurance for the benefit of itself and its reinsurers under one or more

252、 of its reinsurance treaties.Common account retrocessional arrangements reduce the effect of individual or aggregate losses to all participating companies,including the ceding company,with respect to the involved treaties.All of the Companys reinsurance and retrocessional agreements transfer signifi

253、cant reinsurance risk and therefore,are accounted for as reinsurance in accordance with the Financial Accounting Standards Board(“FASB”)guidance.At December 31,2014,the Company had$670.9 million in reinsurance receivables with respect to both paid and unpaid losses ceded.Of this amount,$102.3 millio

254、n,or 15.2%,was receivable from C.V.Starr(Bermuda)(“C.V.Starr”);$75.0 million,or 11.2%,was receivable from Resolution Group Reinsurance(Barbados)Limited(“Resolution Group”);$64.6 million,or 9.6%,was receivable from Federal Crop Insurance Company(“FCIC”);$60.7 million,or 9.0%,was receivable from Zuric

255、h Vericherungs Gesellschaft(“Zurich”);$39.5 million,or 5.9%,was receivable from Transatlantic Reinsurance Company(“Transatlantic”);$37.2 million,or 5.5%,was receivable from Hannover Rueck SE(“Hannover”);$35.2 million,or 5.2%,was receivable from Axis Reinsurance Company(“Axis”)and$33.9 million,or 5.1

256、%,was receivable from Axa Seguros Gen SA De Seguros Y Reaseguros(“Axa Seguros”).The receivables from C.V.Starr and Resolution Group are fully collateralized by individual trust agreements.No other retrocessionaire accounted for more than 5%of our receivables.Although management carefully selects its

257、 reinsurers,the Company is subject to credit risk with respect to its reinsurance because the ceding of risk to reinsurers does not relieve the Company of its liability to insureds or ceding companies.See ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Fi

258、nancial Condition”.Claims.Claims.Reinsurance claims are managed by the Companys professional claims staff whose responsibilities include reviewing initial loss reports and coverage issues,monitoring claims handling activities of ceding companies,establishing and adjusting proper case reserves and ap

259、proving payment of claims.In addition to claims assessment,processing and payment,the claims staff selectively conducts comprehensive claim audits of both specific claims and overall claim procedures at the offices of selected ceding companies.Insurance claims,except those relating to Mt.McKinleys b

260、usiness,are generally handled by third party claims service providers who have limited authority and are subject to oversight by the Companys professional claims staff.The Company intensively manages its asbestos and environmental(“A&E”)exposures through dedicated,centrally managed claim staffs for

261、Mt.McKinley and Everest Re.Both are staffed with experienced claim and legal professionals who specialize in the handling of such exposures.These units actively manage each individual insured and reinsured account,responding to claim developments with evaluations of the involved exposures and adjust

262、ment of reserves as appropriate.Specific or general claim developments that may have material implications for the Company are regularly communicated to senior management,actuarial,legal and financial areas.Senior management and claim management personnel meet at least quarterly to review the Compan

263、ys overall reserve positions and make changes,if appropriate.The Company continually reviews its internal processing,communications and analytics,seeking to enhance the management of its A&E exposures,in particular in regard to changes in asbestos claims and litigation.12 Reserves for Unpaid Propert

264、y and Casualty Losses and LAE.Reserves for Unpaid Property and Casualty Losses and LAE.Significant periods of time may elapse between the occurrence of an insured loss,the reporting of the loss to the insurer and the reinsurer and the payment of that loss by the insurer and subsequent payments to th

265、e insurer by the reinsurer.To recognize liabilities for unpaid losses and LAE,insurers and reinsurers establish reserves,which are balance sheet liabilities representing estimates of future amounts needed to pay reported and unreported claims and related expenses for losses that have already occurre

266、d.Actual losses and LAE paid may deviate,perhaps substantially,from such reserves.To the extent reserves prove to be insufficient to cover actual losses and LAE after taking into account available reinsurance coverage,the Company would have to recognize such reserve shortfalls and incur a charge to

267、earnings,which could be material in the period such recognition takes place.See ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Loss and LAE Reserves”.As part of the reserving process,insurers and reinsurers evaluate historical data and trends and make ju

268、dgments as to the impact of various factors such as legislative and judicial developments that may affect future claim amounts,changes in social and political attitudes that may increase loss exposures and inflationary and general economic trends.While the reserving process is difficult and subjecti

269、ve for insurance companies,the inherent uncertainties of estimating such reserves are even greater for the reinsurer,due primarily to the longer time between the date of an occurrence and the reporting of any attendant claims to the reinsurer,the diversity of development patterns among different typ

270、es of reinsurance treaties or facultative contracts,the necessary reliance on the ceding companies for information regarding reported claims and differing reserving practices among ceding companies.In addition,trends that have affected development of liabilities in the past may not necessarily occur

271、 or affect liability development in the same manner or to the same degree in the future.As a result,actual losses and LAE may deviate,perhaps substantially,from estimates of reserves reflected in the Companys consolidated financial statements.Like many other property and casualty insurance and reins

272、urance companies,the Company has experienced adverse loss development for prior accident years,which has led to increases in losses and LAE reserves and corresponding charges to income(loss)in the periods in which the adjustments were made.There can be no assurance that adverse development from prio

273、r years will not continue in the future or that such adverse development will not have a material adverse effect on net income(loss).Changes in HistoricalChanges in Historical Reserves.Reserves.The following table shows changes in historical loss reserves for the Company for 2004 and subsequent year

274、s.The table is presented on a GAAP basis except that the Companys loss reserves for its Canadian branch operations are presented in Canadian dollars,the impact of which is not material.The top line of the table shows the estimated reserves for unpaid losses and LAE recorded at each year end date.The

275、 upper(paid)portion of the table presents the related cumulative amounts paid through each subsequent year end.The lower(liability re-estimated)portion shows the re-estimated amount of the original reserves as of the end of each succeeding year.The reserve estimates have been revised as more informa

276、tion became known about the actual claims for which the reserves were carried.The cumulative(deficiency)/redundancy line represents the cumulative change in estimates since the initial reserve was established.It is equal to the initial reserve less the latest estimate of the ultimate liability.Since

277、 the Company has international operations,some of its loss reserves are established in foreign currencies and converted to U.S.dollars for financial reporting.Changes in conversion rates from period to period impact the U.S.dollar value of carried reserves and correspondingly,the cumulative deficien

278、cy line of the table.However,unlike other reserve development that affects net income(loss),the impact of currency translation is a component of other comprehensive income(loss).To differentiate these two reserve development components,the translation impacts for each calendar year are reflected in

279、the table of Effects on Pre-tax Income Resulting from Reserve Re-estimates.13 Each amount other than the original reserves in the top half of the table below includes the effects of all changes in amounts for prior periods.For example,if a loss settled in 2007 for$100,000,was first reserved in 2004

280、at$60,000 and remained unchanged until settlement,the$40,000 deficiency(actual loss minus original estimate)would affect the cumulative deficiency for each of the years in 2004 through 2006.Conditions and trends that have affected development of the ultimate liability in the past are not indicative

281、of future developments.Accordingly,it is not appropriate to extrapolate future redundancies or deficiencies based on this table.Ten Year GAAP Loss Development Table Presented Net of Reinsurance with Supplemental Gross Data(1)(2)(Dollars in millions)20042005200620072008200920102011201220132014Net Res

282、erves for unpaidloss and LAE6,766.9$8,175.4$8,078.9$8,324.7$8,214.7$8,315.9$8,650.7$9,553.0$9,464.6$9,235.3$9,164.7$Paid(cumulative)as of:One year later1,553.1 2,116.9 1,915.4 1,816.4 1,997.2 1,988.7 2,008.3 2,220.2 2,353.8 2,089.7 Two years later2,412.3 3,447.8 3,192.8 3,182.2 3,405.8 3,231.2 3,238

283、.9 3,852.4 3,798.7 Three years later3,181.4 4,485.2 4,246.3 4,191.7 4,335.1 4,043.9 4,352.7 4,987.1 Four years later3,854.8 5,306.5 5,036.3 4,791.8 4,914.8 4,903.9 5,089.6 Five years later4,459.5 5,950.6 5,446.9 5,206.8 5,601.3 5,545.0 Six years later4,952.9 6,281.7 5,745.7 5,777.5 6,126.5 Seven yea

284、rs later5,190.5 6,523.7 6,211.7 6,175.5 Eight years later5,387.3 6,920.0 6,554.0 Nine years later5,726.3 7,210.7 Ten years later5,958.0 Net Liability re-estimated as of:One year later6,633.7 8,419.8 8,356.7 8,112.9 8,461.9 8,229.4 8,648.2 9,572.4 9,424.1 9,059.9 Two years later6,740.5 8,609.2 8,186.

285、3 8,307.6 8,382.7 8,273.9 8,657.3 9,558.7 9,261.4 Three years later7,059.9 8,489.7 8,398.7 8,267.1 8,426.5 8,274.1 8,663.2 9,584.2 Four years later6,996.7 8,683.8 8,401.8 8,298.4 8,408.3 8,248.0 8,683.7 Five years later7,162.2 8,729.6 8,427.4 8,272.5 8,416.5 8,353.3 Six years later7,246.3 8,752.3 8,

286、399.8 8,317.8 8,553.8 Seven years later7,256.8 8,750.3 8,467.3 8,467.9 Eight years later7,272.2 8,829.8 8,621.6 Nine years later7,323.8 8,977.1 Ten years later7,466.9 Cumulative(deficiency)/redundancy(700.0)$(801.7)$(542.7)$(143.1)$(339.1)$(37.4)$(33.0)$(31.2)$203.2$175.4$Gross liability-end of year

287、7,886.6$9,175.1$8,888.0$9,032.2$8,905.9$8,957.4$9,340.1$10,134.0$10,067.5$9,709.3$9,792.5$Reinsurance receivable1,119.6 999.7 809.1 707.4 691.2 641.5 689.4 581.1 602.8 474.0 627.8 Net liability-end of year6,766.9$8,175.4$8,078.9$8,324.7$8,214.7$8,315.9$8,650.7$9,553.0$9,464.6$9,235.3$9,164.7$Gross r

288、e-estimated liabilityat December 31,20148,727.0$10,107.0$9,478.8$9,207.8$9,339.3$9,163.4$9,488.6$10,230.2$9,974.6$9,695.0$Re-estimated receivableat December 31,20141,260.1 1,129.9 857.1 739.9 785.5 810.1 804.9 646.0 713.2 635.1 Net re-estimated liabilityat December 31,20147,466.9$8,977.1$8,621.6$8,4

289、67.9$8,553.8$8,353.3$8,683.7$9,584.2$9,261.4$9,059.9$Gross cumulative(deficiency)/redundancy(840.4)$(931.9)$(590.8)$(175.7)$(433.4)$(206.1)$(148.5)$(96.2)$92.9$14.2$(1)The Canadian Branch reserves are reflected in Canadian dollars.(2)Some amounts may not reconcile due to rounding.There has been mini

290、mal development in reserves since 2006.Two classes of business were the principal contributors to the deficiencies through 2006:1)the run-off of asbestos claims for both direct and reinsurance business has significantly contributed to the cumulative deficiencies for all years presented through 2006

291、and 2)property catastrophe adverse development contributed to the deficiency for 2005.In the professional liability reinsurance class,the early 2000s saw a proliferation of claims relating to bankruptcies and other corporate,financial and/or management improprieties.This resulted in an increase in t

292、he frequency and severity of claims under the professional liability policies reinsured by the Company.In the general casualty area,the Company has experienced claim frequency and severity greater than expected in the Companys pricing and initial reserving assumptions.14 In the workers compensation

293、insurance class,the majority of which was written in California,the Company has experienced adverse development primarily for accident year 2002 due to higher than expected claim frequency and severity.As a result of significant growth in this book of business in a challenging business environment,t

294、he Companys writings in this class were subject to more relative variability than in some of its established and/or stable lines of business.Although cumulative results through 2014 continue to be profitable for this book of business,there was some deterioration in claim frequency and severity relat

295、ed to older accident years.The adverse development on the 2008 outstanding reserves was primarily attributable to foreign exchange rate movements resulting in an increase in the U.S.dollar reserves.In addition,the Company experienced adverse development on liability exposures for sub-prime for accid

296、ent years 2006-2008 and contractors liability exposures for accident years 2004-2005.The contractor liability exposures are currently in run-off.The Company also experienced adverse development on property lines but was offset by favorable development on other casualty lines.The Companys loss and LA

297、E reserves represent managements best estimate of the ultimate liability.While there can be no assurance that these reserves will not need to be increased in the future,management believes that the Companys existing reserves and reserving methodologies reduce the likelihood that any such increases w

298、ould have a material adverse effect on the Companys financial condition,results of operations or cash flows.These statements regarding the Companys loss reserves are forward looking statements within the meaning of the U.S.federal securities laws and are intended to be covered by the safe harbor pro

299、visions contained therein.See ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Safe Harbor Disclosure”.The following table is derived from the Ten Year GAAP Loss Development Table above and summarizes the effect of reserve re-estimates,net of reinsurance,o

300、n calendar year operations by accident year for the same ten year period ended December 31,2014.Each column represents the amount of net reserve re-estimates made in the indicated calendar year and shows the accident years to which the re-estimates are applicable.The amounts in the total accident ye

301、ar column on the far right represent the cumulative reserve re-estimates for the indicated accident years.Since the Company has operations in many countries,part of the Companys loss and LAE reserves are in foreign currencies and translated to U.S.dollars for each reporting period.Fluctuations in th

302、e exchange rates for the currencies,period over period,affect the U.S.dollar amount of outstanding reserves.The translation adjustment line at the bottom of the table eliminates the impact of the exchange fluctuations from the reserve re-estimates.Effects on Pre-tax Income Resulting from Reserves Re

303、-estimatesCumulative Re-estimates for Each(Dollars in millions)2005200620072008200920102011201220132014Accident YearAccident Years2004 and prior133.3$(106.8)$(319.4)$63.2$(165.6)$(84.1)$(10.6)$(15.4)$(51.6)$(143.1)$(700.0)$2005(137.6)130.1 56.3 (28.6)38.2 (12.1)17.4 (27.8)(4.2)31.6 2006(88.4)50.9 (1

304、8.3)42.8 (3.0)25.7 11.9 (7.0)14.5 200741.5 17.6 43.6 (5.7)(1.8)22.3 4.2 121.8 2008(52.5)38.6 (12.4)(7.7)37.0 12.9 15.9 20097.4 (0.8)(18.5)34.4 31.9 54.5 201047.1 (8.9)(32.1)84.8 90.9 2011(10.2)19.6 (4.9)4.4 201226.9 188.2 215.0 201312.7 12.7 Total calendar year effect133.3$(244.4)$(277.8)$211.8$(247

305、.2)$86.5$2.5$(19.4)$40.5$175.4$Canada(1)(6.6)(0.5)(49.6)63.7 (39.4)(21.2)9.7 (9.9)26.4 25.1 Translation adjustment(100.3)109.3 120.9 (310.4)157.8 (34.5)(15.9)32.9 (48.6)(160.7)Re-estimate of net reserve after translation adjustment26.4$(135.6)$(206.5)$(34.9)$(128.8)$30.9$(3.7)$3.7$18.2$39.9$(1)This

306、adjustment converts Canadian dollars to U.S.dollars.(Some amounts may not reconcile due to rounding.)15 The reserve development by accident year reflected in the above table was generally the result of the same factors described above that caused the deficiencies shown in the Ten Year GAAP Loss Deve

307、lopment Table.The unfavorable development experienced in the 2004 and prior accident years relate principally to the previously discussed asbestos development.Other business areas contributing to adverse development were casualty reinsurance,including professional liability classes,and workers compe

308、nsation insurance,where,in retrospect,the Companys initial estimates of losses were underestimated principally as the result of unanticipated variability in the underlying exposures.The favorable development for accident year 2005 relates primarily to favorable experience with respect to property re

309、insurance business.In addition,casualty reinsurance has reflected favorable development for accident years 2004 to 2006.The Companys loss reserving methodologies continuously monitor the emergence of loss and loss development trends,seeking,on a timely basis,to both adjust reserves for the impact of

310、 trend shifts and to factor the impact of such shifts into the Companys underwriting and pricing on a prospective basis.The following table presents a reconciliation of beginning and ending reserve balances for the periods indicated on a GAAP basis:(Dollars in millions)201420132012Gross reserves at

311、beginning of period9,673.2$10,069.1$10,123.2$Incurred related to:Current year2,946.4 2,818.5 2,748.9 Prior years(39.9)(18.2)(3.7)Total incurred losses2,906.5 2,800.3 2,745.3 Paid related to:Current year 761.8 664.7 633.9 Prior years2,089.7 2,353.8 2,220.2 Total paid losses2,851.5 3,018.5 2,854.1 For

312、eign exchange/translation adjustment(160.7)(48.6)32.9 Change in reinsurance receivables on unpaid losses and LAE153.2 (128.9)21.8 Gross reserves at end of period9,720.8$9,673.2$10,069.1$(Some amounts may not reconcile due to rounding.)Years Ended December 31,Incurred prior years reserves decreased b

313、y$39.9 million,$18.2 million and$3.7 million for the years ended December 31,2014,2013 and 2012,respectively.The decrease for 2014 was attributable to favorable development in the reinsurance segments of$202.4 million related to treaty casualty,treaty property and catastrophe reserves,partially offs

314、et by$137.8 million development on A&E reserves and$0.2 million of favorable development related to Mt.Logan reserves and$25.0 million of unfavorable development in the insurance segment primarily related to construction liability and umbrella business.The decrease for 2013 was attributable to a$148

315、.8 million decrease in reinsurance business,primarily related to favorable development on treaty property reserves,partially offset by a$130.5 million increase in insurance business primarily related to development on contractors liability,umbrella and workers compensation reserves.The decrease for

316、2012 was attributable to a$57.2 million decrease in reinsurance business,primarily related to favorable development on treaty casualty reserves,partially offset by a$53.5 million increase in insurance business primarily related to development on contractors liability and workers compensation reserve

317、s.16 Reserves for Asbestos and EnvironmeReserves for Asbestos and Environmental Losses and LAE.ntal Losses and LAE.At December 31,2014,the Companys gross reserves for A&E claims represented 4.9%of its total reserves.The Companys A&E liabilities stem from Mt.McKinleys direct insurance business and Ev

318、erest Res assumed reinsurance business.There are significant uncertainties in estimating the amount of the Companys potential losses from A&E claims and ultimate values cannot be estimated using traditional reserving techniques.See ITEM 7,“Managements Discussion and Analysis of Financial Condition a

319、nd Results of Operations Asbestos and Environmental Exposures”and Item 8,“Financial Statements and Supplementary Data”-Note 3 of Notes to Consolidated Financial Statements.The following table summarizes the composition of the Companys total reserves for A&E losses,gross and net of reinsurance,for th

320、e periods indicated:Years Ended December 31,(Dollars in millions)201420132012Gross reserves 476.2$402.5$442.8$Reinsurance receivable(18.0)(15.8)(17.1)Net reserves 458.2$386.7$425.7$(Some amounts may not reconcile due to rounding.)In 2014,during its normal exposure analysis,the Company increased its

321、net A&E reserves by$137.8 million;$100.6 million related to its assumed reinsurance business and$37.2 million related to its direct insurance business.Additional losses,including those relating to latent injuries and other exposures,which are as yet unrecognized,the type or magnitude of which cannot

322、 be foreseen by either the Company or the industry,may emerge in the future.Such future emergence could have material adverse effects on the Companys future financial condition,results of operations and cash flows.Future Policy Benefit Future Policy Benefit Reserves.Reserves.The Company wrote a limi

323、ted amount of life and annuity reinsurance in its Bermuda segment.Future policy benefit liabilities for annuities are reported at the accumulated fund balance of these contracts.Reserves for those liabilities include mortality provisions with respect to life and annuity claims,both reported and unre

324、ported.Actual experience in a particular period may be worse than assumed experience and,consequently,may adversely affect the Companys operating results for that period.See ITEM 8,“Financial Statements and Supplementary Data”-Note 1F of Notes to Consolidated Financial Statements.Activity in the res

325、erve for future policy benefits is summarized for the periods indicated:At December 31,(Dollars in millions)201420132012Balance at beginning of year59.5$66.1$67.2$Liabilities assumed0.3 0.1 0.1 Adjustments to reserves4.7 (3.1)2.4 Benefits paid in the current year(4.7)(3.6)(3.6)Balance at end of year

326、59.8$59.5$66.1$(Some amounts may not reconcile due to rounding.)Investments.Investments.The board of directors of each of the Companys operating subsidiaries is responsible for establishing investment policy and guidelines and,together with senior management,for overseeing their execution.The Compan

327、ys principal investment objectives are to ensure funds are available to meet its insurance and reinsurance obligations and to maximize after-tax investment income while maintaining a high quality diversified investment portfolio.Considering these objectives,the Company views its investment portfolio

328、 as having two components:1)the investments needed to satisfy outstanding liabilities(its core fixed maturities portfolio)and 2)investments funded by the Companys shareholders equity.17 For the portion needed to satisfy global outstanding liabilities,the Company generally invests in taxable and tax-

329、preferenced fixed income securities with an average credit quality of A1.For the U.S.portion of this portfolio,our mix of taxable and tax-preferenced investments is adjusted periodically,consistent with the Companys current and projected U.S.operating results,market conditions and our tax position.T

330、his global fixed maturity securities portfolio is externally managed by an independent,professional investment manager using portfolio guidelines approved by the Company.Over the past several years,the Company has expanded the allocation of its investments funded by shareholders equity to include:1)

331、a greater percentage of publicly traded equity securities,2)emerging market fixed maturities through mutual fund structures,as well as individual holdings,3)high yield fixed maturities,4)bank loan securities and 5)private equity limited partnership investments.The objective of this portfolio diversi

332、fication is to enhance the risk-adjusted total return of the investment portfolio by allocating a prudent portion of the portfolio to higher return asset classes,which are also less subject to changes in value with movements in interest rates.The Company limits its allocation to these asset classes

333、because of 1)the potential for volatility in their values and 2)the impact of these investments on regulatory and rating agency capital adequacy models.The Company uses investment managers experienced in these markets and adjusts its allocation to these investments based upon market conditions.At December 31,2014,the market value of investments in these investment market sectors,carried at both ma