Everest Re Group Ltd. (RE) 2018年年度報告「NYSE」.pdf

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1、S T R A T E G I C A L L Y B A L A N C E DEvErEst rE Group,Ltd.2018 ANNUAL REPORTEverest Re Group,Ltd.F I N A N C I A L H I G H L I G H T S(in millions,except per share data)20182017201620152014BALANCE SHEETTotal assets$24,794.0$23,591.8$21,321.5$20,545.4$20,339.9 Shareholders equity 7,903.8 8,369.2

2、8,075.4 7,608.6 7,451.1 Book value per common share 194.43 204.95 197.45 178.21 166.75 RESULTSGross written premiums$8,475.2$7,173.9$6,033.9$5,891.7$5,762.9 Net pre-tax investment income 581.2 542.9 473.1 473.5 530.5 Net after-tax investment income 514.7 449.0 386.5 383.6 437.6 After-tax operating i

3、ncome(loss),excluding realized gains(losses)*$190.7$412.6$1,004.3$1,108.1$1,143.7 per basic common share 4.68 10.06 24.04 25.26 24.95 per diluted common share 4.65 10.00 23.87 25.04 24.71 Net Income(loss)$103.6$469.0$996.3$977.9$1,199.2 per basic common share 2.54 11.43 23.85 22.29 26.16 per diluted

4、 common share 2.53 11.36 23.68 22.10 25.91 FINANCIAL RATIOSCombined ratio108.8%103.5%87.0%85.1%83.8%After-tax operating return*on average adjusted equity2.3%5.1%12.9%15.0%16.3%Net income return on average equity1.3%5.8%12.8%13.2%17.1%*The Company generally uses after-tax operating income(loss),a non

5、-GAAP financial measure,to evaluate its performance.After-tax operating income(loss)consists of net income(loss)excluding after-tax net realized capital gains(losses),after-tax net foreign exchange income(expense),and the tax charge related to the enactment of the Tax Cuts and Jobs Act of 2017(TCJA)

6、.As reflected in this definition,starting in first quarter 2018,the Company adjusted operating income for years 2016 to the present to exclude foreign exchange gains and losses as it believes the impact of foreign currency movements on income is not indicative of the performance of the underlying bu

7、siness in a particular period.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.A+A.M.BestA1MoodysA+S&P1Rock solid balance sheetHighly diversified businessAmong the lowest expense ratios in the industryExperienc

8、ed underwriting teams and global presenceEverest Fundamental StrengthsOperating ROEEverestPeer Avg(1)GROSS WRITTEN PREMIUM BY LINE OF BUSINESS28%Property/Short Tail20%Workers Compensation19%Other Casualty12%Accident&Health11%Professional Liability6%Lloyds4%CanadaInsuranceShareholder Value CreationCL

9、ASS OF BUSINESSLong Tail Medium TailShort Tail1873%13%14%1045%22%33%DISTRIBUTIONDirectProgram1881%19%1031%69%4.3%6.7%10.3%6.6%11.5%7.7%10.2%8.3%3Yr Avg5Yr Avg7Yr Avg10Yr AvgAlleghany,Arch,Aspen,Axis,Chubb,Markel,RenRe,W.R.Berkley Source:SNL9501Growth in Dividend-Adjusted Book Value per ShareBook Val

10、ue per ShareDividends to Shareholders9501071218EverestPeer Avg(1)GROSS WRITTENPREMIUM BY REGION ReinsuranceGROSS WRITTEN PREMIUM BY LINE OF BUSINESS33%Property ProRata26%Property Cat XOL13%Casualty ProRata12%Financial Lines 9%Casualty XOL 7%Property Non-Cat XOL ReinsuranceShareholder Value CreationC

11、LASS OF BUSINESSLong Tail Medium TailShort Tail1873%13%14%1045%22%33%DISTRIBUTIONDirectProgram1881%19%1031%69%4.3%6.7%10.3%6.6%11.5%7.7%10.2%8.3%$233.78$145.87$95.74$38.46$19.392018 ANNUAL REPORT Compound Annual Growth of 11%“This resilient platform is the product of design and consistent effort ove

12、r many years.The result is a company which is strategically balanced between insurance and reinsurance.”L E T T E R F R O M T H E C H A I R M A NEVEREST RE GROUP,LTD.Fortunately for Everest shareholders,our company was built to not only sur-vive but thrive during these turbulent times.Over the two y

13、ear period 2017 and 2018,Everest still had a positive financial result,with total net operating income over$603 million.This resil-ient platform is the product of design and consistent effort over many years.The result is a company which is strategically balanced between insurance and reinsurance.In

14、 addition to building a business well diversified by class(property or casualty),treaty type(excess of loss or proportional)and territory,Everests income streams are balanced between underwriting and investment income.While our underwriting results over the 2017-2018 period were negative,our investm

15、ent income over those two years more than offset these losses.Clearly,not all of Everests peers have the sizable bal-ance sheet and invested asset portfolio that we have accumulated over time,and as such are far more dependent on underwriting income alone.I have been privileged to be the CEO and/or

16、Chairman of Everest Last year when writing to you about Everest,I noted that the true measure of a strong company is how it performs during challenging times.In some ways,2018 feels like dj vu,with the reinsurance and insurance industry absorbing some$90 billion of insured natural catastrophe losses

17、 on top of the$140 billion during 2017.22018 ANNUAL REPORT Joseph V.Taranto Chairman of the Boardfor 25 years,since joining to lead the business in 1994.Many of our com-petitors have come and gone,either absorbed into other organizations or simply finding it too difficult to earn an adequate return

18、for their investors.Through it all,Everest has remained a solid and stable partner for our clients,while delivering a long term profitable return to our shareholders with total value creation(compound annual growth in book value including dividends)of 11.4%from our IPO to date,a 23 year period.Certa

19、inly much of Everests success is due to our experienced management team and dedicated employees,some of whom have been with the company for many years.On that note,I would like to highlight the contributions of our President and CEO Dom Addesso,who has announced his retirement effective at the end o

20、f 2019.Dom was the first to succeed me in this role and during his tenure has con-tinued to strengthen the balance sheet and further diversify the business,all while maintaining the Everest commitment to operational excellence.Dom has been a strong and effective leader and I thank him for all he has

21、 done for our Company.The other members of the board and I have commenced our search for the next CEO.There are talented leaders within our Company who are being considered,as well as external candi-dates.The bar for becoming CEO of Everest remains very high,and I am confident that Doms successor wi

22、ll continue the legacy that we have built over the past 25 years.Joseph V.Taranto Chairman of the Board34A MESSAGE FROM THE PRESIDENT AND CHIEF EXECUTIVE OFFICEREVEREST RE GROUP,LTD.“It bears repeating that our business can and will experience periods of volatility with the primary goal of providing

23、 our shareholders an industry leading long-term return on investment.”As I reflect on my past 10 years at Everest I cant help but be grateful for the incredible platform that I inherited from Joe Taranto and the management team.It is from this platform that an even stronger and dynamic Everest is em

24、erging.Five years ago with the support of Joe and the Board we began a strategic effort to transform the organization into a more diversified platform with earnings streams from multiple products.These new and/or expanded business lines have provided ballast to losses suffered from the worst back to

25、 back years in history for natural catastrophes.2018 was a challenging financial year for both Everest and the reinsurance and insurance industry,with the fourth highest level of insured natural catastrophes on record,estimated at$90 billion.This follows on 2017 which saw$140 billion in insured loss

26、es,an unfortunate record year for the industry.Given Everests global presence,balance sheet and business model,we undoubtedly expect our share of the losses,in general between 1 to 1.5 percent of the global industry figure.This was the case over the past two years,as the catastrophe events of 2017 a

27、nd 2018 fell within this range.Despite these losses,the fundamental strength and diversification of our business still allowed Everest to generate over$603 million of net operating income over this two year timeframe.Due to the extraordinary level of natural disasters this result is of course lower

28、than the recent years preceding 2017 where cat activity was benign,however even with these events Everest has continued to produce an outstanding record of long-term value creation over the ten year period ending in 2018 of 11%.It is worth noting that also included in this period are what was at tha

29、t time the previous two highest cat years on record in 2010 and 2011.So,four years in 10 there were record cat losses but our return over that time was superb.It bears repeating that our business can and will experience periods of volatility,with the primary goal of providing our shareholders an ind

30、ustry leading long-term return on investment.That being said,there are undoubtedly lessons learned from any catastrophe events.The near-term changes for Everest will include some downward adjustment to exposure but mostly a focus on terms,conditions and pricing based on our updated view of risk.Long

31、er term,our efforts to diversify continue to progresswithin reinsur-ance and between reinsurance and insurance.During 2012,my first full year as President of Everest,the Company wrote just over$4 billion in gross premiums,split roughly$3 billion reinsurance and$1 billion insurance.Our reinsurance bu

32、siness was weighted towards property cat,and the insurance business had a limited market profile.Fast forward to 2018 where the Com-pany recorded over$8 billion in written premium,$6 billion in reinsurance and$2 billion from Everest Insurance.Over time you have and will continue to see property cat

33、become a smaller part of our risk profile.That comes not from shrinking cat business,although in certain circumstances that will likely happen due to current market condi-tions,but from growing other classes of business across both our reinsurance and insurance platforms.We are and will continue to

34、become a larger,more diversified company.Specific to reinsurance,we have grown in core classes including casualty treaty and entered into newer classes such as mortgage and credit risk transfer,while maintaining a long-term track record of profitability.We also continue 5Dominic J.AddessoPresident a

35、nd Chief Executive Officer2018 ANNUAL REPORT to innovateMt.Logan Re,Everests third party capital vehicle,was estab-lished in 2013 as a mechanism to transfer risk to the capital markets,and Everest is the single largest sponsor of cat bonds through Kilimanjaro Re,providing nearly$3 billion in capital

36、 protection.Everest is one of the few truly global reinsurance franchises remaining in a market that has seen significant con-solidation over the past ten years.We offer a full array of property,casualty and other specialty products and transact with our customers and their intermediaries in offices

37、 around the world where they want to do business.We are also almost exclusively a broker market reinsurer which we see as a further competitive advantage.Together these qualities allowed Everest to grow our business during 2018,validating our importance as a trusted reinsurance partner.Everest and p

38、redecessor companies have been in business for over 40 years,and in some cases our client relationships go back to day one.We genuinely appreciate the support and trust of our business partners as evidenced by these relationships.Turning to Everest Insurance,2018 was a record year with$2.25 billion

39、of gross premiums written and a 95.3%combined ratio,the first underwriting profit since 2006.Combined with a well-balanced business mix between casualty,property and other specialty,these results reflect a significant transformation over the past five years.These results compare favorably with leadi

40、ng franchises in the insurance space and we have confidence in their go-forward sustainability.Our strong balance sheet and impres-sive investment returns provide the rock solid financial foundation for our business.At the end of 2018,Everest had just under$8 billion in equity and among the lowest f

41、inancial leverage ratios in the industry,plus strong finan-cial ratings.This financial strength is important to our customers and their intermediaries,especially as some longer tail classes of business represent a promise to pay that may last for years in the future.Our investment returns are also a

42、 key diversifier of income and results,with net investment income more than offsetting under-writing losses over the 2017 and 2018 timeframe.As I contemplate handing over the reins of the organization I am very confident in the future of Everest.Our diversification efforts will serve to reduce volat

43、ility going forward,while our financial strength and resiliency allow us to take advantage of oppor-tunities for both our reinsurance and insurance businesses.It has been a challenging journey and one in which my colleagues across the globe have tirelessly and intelligently navigated.I am very proud

44、 of and thankful for their achievements.Our future is in good hands.Thank you for your support.Dominic J.Addesso President and Chief Executive Officer67C O R P O R AT E S O C I A L R E S P O N S I B I L I T YEVEREST RE GROUP,LTD.At Everest,we believe that our future is determined by the actions we t

45、ake today.Actions that go beyond business strategy and encompass the values important to our employees and the communities in which we operate.Everests value commitments include:providing an inclusive work environment that offers employees the opportunity to further their development,supporting our

46、com munities through the donation of time and financial resource,maintaining our integrity across all aspects of the group,and being an industry innovator to solve global complex risks.Employee Development We seek to create an environment where all employees are treated with respect and are encourag

47、ed to reach their highest potential.Attracting and retaining high-quality people,capable of becoming the next generation leaders that can carry on the Everest culture,is critical to our ongoing success.In the last several years,Everest has broadened its training initiatives through mentoring opportu

48、nities,professional development workshops,networking groups,and other resources.Best expressed by Karen Davis,Head of Talent Development at Everest,“Our goal is to create a culture of continuous learning,coaching,and mentoring.”Community Outreach Everest believes strongly in the importance of giving

49、 back to its global communities and helping those in need.Our mission is to support education,health,social and environmental issues that impact our neighbors.Over the last year,our associates,with the support of the Compa-ny,volunteered thousands of hours to support a range of charitable causes inc

50、luding working with Habitat for Humanity to build houses;participating in United Ways literacy outreach program;donating backpacks and supplies to students in need,supporting community food,clothing,and holiday toy drives;remembering our military and their families during the holiday season;donating

51、 blood through the American Red Cross,and partnering with Rise Against Hunger to pack nutritious meals for dis-tribution to organizations around the world.Everest also has a matching gift program for targeted charities that align with the Companys mission.Corporate Governance&Ethics We are committed

52、 to operating our business consistent with sound corporate practices and strong corporate governance that promotes the long-term interests of our shareholders,strengthens the accountability of the Board and man age ment and helps build trust in the Company.Our Board encourages and reviews man agemen

53、t perfor-mance in the context of business practices that emphasize sustainability and best-in-class corporate governance.The Companys Code of Conduct,which it publishes on its website,includes its“Ethics Guidelines”that is intend-ed to guide all of the Companys decisions and behavior by holding all

54、directors,officers and employees to the highest standards of integrity.Our philosophy has always been to generate long-term value for our shareholders.This emphasis is reflected in our compensation philosophy,enterprise risk management,and business model.Environmental Conscience As a global reinsura

55、nce/insurance organization,we recognize the potential impact of such exogenous threats as climate change and extreme weather events.Through our affiliation with the Geneva Association we provide financial support to study the impact of and possible solutions for these threats to our economies and th

56、e human condition.We also strive to incorporate such risks,to the extent they can be quantified,into our risk man-agement profile.We have a highly developed enterprise risk management(ERM)practice that identifies key risks to which the Company is exposed and establishes tolerance levels and mitigati

57、on strategies to preserve the sustainability of our business.“We seek to create an environment where all employees are treated with respect and are encouraged to reach their highest potential.Attracting and retaining high-quality people,capable of becoming the next generation leaders that can carry

58、on the Everest culture,is critical to our ongoing success.”SENIOR OFFICERS OF EVEREST RE COMPANIES672018 ANNUAL REPORT Everest Reinsurance Company Everest National Insurance Company Everest Indemnity Insurance Company Everest Global Services,Inc.477 Martinsville Road PO Box 830 Liberty Corner,NJ 079

59、38-0830 Telephone:(908)604-3000 Telephone:(800)269-6660Fax:(908)604-3322ATLANTA Everest National Insurance CompanyGlenridge Highlands One5555 Glenridge Connector,Suite 485Atlanta,GA 30342Telephone:(404)479-2000Fax:(404)479-2100BOSTONEverest National Insurance Company28 State St.,36th FloorBoston,MA

60、02109Telephone:(857)378-2186CHICAGOEverest National Insurance Company222 South Riverside Plaza,Suite 300 Chicago,IL 60606 Telephone:(312)260-3060Fax:(312)260-3137CHICAGOEverest Reinsurance Company 250 South Wacker Drive,Suite 410Chicago,IL 60606 Telephone:(312)660-0012 Fax:(312)660-0032HOUSTONEveres

61、t National Insurance CompanyWoodbranch Plaza One,Suite 15012121 Wickchester LaneHouston,TX 77079Telephone:(281)670-0980 Fax:(281)670-0991INDIANAPOLISEverest Specialty Insurance GroupThe Congressional Building111 Congressional Boulevard,Suite 220Carmel,IN 46032Telephone:(317)853-7050Fax:(317)853-7052

62、LOS ANGELESEverest National Insurance Company 725 S.Figueroa St.,Suite 2600Los Angeles,CA 90017Telephone:(800)822-5013MIAMI Everest Reinsurance Company 777 Brickell Avenue,Suite 700 Miami,FL 33131 Telephone:(305)371-8200 Fax:(305)789-3936NEW YORK Everest Reinsurance Company Everest National Insuranc

63、e CompanyEverest Specialty Underwriters,LLC 461 5th Avenue 3rd5th,7th,11th&20th Floors New York,NY 10017-6234 Telephone:(646)746-2700 Fax:(646)746-2750ORANGEEverest National Insurance Company 725 Town and Country Road,Suite 400 Orange,CA 92868 Telephone:(714)371-9600 Fax:(714)371-9677SAN FRANCISCOEv

64、erest National Insurance Company101 California St.,Suite 2850San Francisco,CA 94111Main:(415)490-1460Fax:(415)490-1485STAMFORD Everest National Insurance Company1 Landmark Square,14th FloorStamford,CT 06901Main:(203)388-3931Fax:(203)388-3951TAMPA Everest Indemnity Insurance Company Highland Oaks Two

65、10210 Highland Manor Drive,Suite 200 Tampa,FL 33610 Telephone:(813)269-6970 Fax:(813)269-6980WALNUT CREEKEverest Reinsurance CompanyEverest National Insurance Company1340 Treat Blvd.,Pacific Plaza,Suite 450Walnut Creek,CA 94597Telephone:(510)273-4660Fax:(510)267-0751BERMUDAEverest Re Group,Ltd.Evere

66、st Reinsurance(Bermuda),Ltd.Everest International Reinsurance,Ltd.Everest International Assurance,Ltd.Mt.Logan Re,Ltd.Seon Place,4th Floor141 Front StreetPO Box HM845Hamilton,HM 19 BermudaTelephone:(441)295-0006 Telephone:(866)233-0686Fax:(441)295-4828BRUSSELS Everest Advisors(UK),Ltd.19 Avenue Emil

67、e De Mot Bte 5 B-1000 Brussels,BelgiumTelephone:(32)2-639-6310 Fax:(32)2-644-2457DUBLIN Everest Reinsurance Company (Ireland),dac Everest Insurance Company(Ireland),dac3rd Floor,Huguenot House 35-38 St.Stephens Green Dublin 2,IrelandTelephone:(353)1-418-0300LONDON Everest Reinsurance(Bermuda),Ltd.Ev

68、erest Advisors(UK),Ltd.40 Lime Street London EC3M 5BS,England Telephone:(44)203-887-2500 Fax:(44)207-623-5967SAO PAULOEverest Reinsurance Company Escritrio de Representao No Brasil Ltda.Av.Naes Unidas,12.3997 andarcj.75ASo Paulo/SPBrasil04578-000Telephone:(55)11-5111-8292 SINGAPORE Everest Reinsuran

69、ce Company 1 Raffles Place#55-00 One Raffles PlaceSingapore 048616Telephone:(65)6-535-1121 Fax:(65)6-535-3363TORONTO Everest Reinsurance Company Everest Insurance Company of Canada The Exchange Tower 130 King Street West,Suite 2520 Toronto,Ontario,Canada M5X 1E3 Telephone:(416)862-1228 Fax:(416)366-

70、5899TORONTOEverest Insurance Company of CanadaPremiere Insurance Underwriting ServicesThe Exchange Tower 130 King Street West,Suite 2620 Toronto,Ontario,Canada M5X 1C7 Telephone:(416)487-3900Fax:(416)487-0311ZURICHEverest Reinsurance Company (Ireland),LimitedSeidengasse 13CH-8001 Zurich,SwitzerlandT

71、elephone:(41)44-226-8000O F F I C E SUNITED STATES AND INTERNATIONALSENIOR OFFICERS OF EVEREST RE COMPANIESBOARD OF DIRECTORSDOMINIC J.ADDESSOPresident and Chief Executive OfficerJOHN P.DOUCETTEExecutive Vice President and President and Chief Executive Officer of the Reinsurance DivisionCRAIG W.HOWI

72、EExecutive Vice President,Chief Financial Officerand TreasurerSANJOY MUKHERJEEExecutive Vice President,General Counsel and Secretary Managing Director and Chief Executive Officer,Everest Reinsurance(Bermuda),Ltd.JONATHAN M.ZAFFINOExecutive Vice President and President and Chief Executive Officer of

73、the Insurance DivisionDENNIS S.ALBASenior Vice PresidentJAMES G.CAMERINOSenior Vice PresidentANDREW J.CARRIERPresident of Everest Advisors,UK and General Manager of European OperationsRONALD D.DIAZExecutive Vice PresidentMELISSA G.FORDSenior Vice PresidentRALPH H.GROCE IIISenior Vice President and C

74、hief Information OfficerLUIS E.MONTEAGUDOSenior Vice PresidentJACK NELSONSenior Vice President and Chief Investment OfficerNITIN TALWALKARSenior Vice PresidentGAIL M.VAN BEVERENSenior Vice PresidentCHARLES R.VOLKERSenior Vice PresidentEVEREST RE GROUP,LTD.C O R P O R AT E D I R E C T O RYJOSEPH V.TA

75、RANTO 1,5 ChairmanDOMINIC J.ADDESSO 1,5,6 President and Chief Executive OfficerJOHN J.AMORE 2,3,4,6 Retired Chief Executive Officer of the General Insurance Division of Zurich Financial ServicesWILLIAM F.GALTNEY,JR.1,2,3,4,6 Deputy Chairman and President,Galtney Group,Inc.JOHN A.GRAF 2,3,4,5 Non-Exe

76、cutive Vice Chairman,Global Atlantic Financial GroupGERRI LOSQUADRO 2,3,4,6 Retired Senior Vice President,Marsh&McLennan CompaniesROGER M.SINGER 2,3,4 Retired Senior Vice President,General Counsel&Secretary,OneBeacon Insurance Group LLCJOHN A.WEBER 1,2,3,4,5 Managing Director,Copley Square Capital M

77、anagement,LLC1.Executive Committee(Joseph Taranto,Chairperson)2.Compensation Committee(John Amore,Chairperson)3.Audit Committee(Roger M.Singer,Chairperson)4.Nominating and Governance Committee(William F.Galtney,Jr.,Chairperson)5.Investment Policy Committee6.Underwriting Committee(Gerri Losquadro,Cha

78、irperson)82 0 1 8 F O R M 1 0-KEVEREST RE GROUP,LTD.UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 F FORM 10-K ORM 10-K _X_ Annual Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 Annual Report Pursuant to Section 13 or 15(d)of the Securities Exchan

79、ge Act of 1934 For the fiscal year ended December 31,2018 _ Transition Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 Transition Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 Commission file number 1-15731 EVEREST RE GROUP,LTD.EVEREST RE G

80、ROUP,LTD.(Exact name of registrant as specified in its charter)BermudaBermuda 9 98 8-03654320365432 (State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)Seon Place 4th Floor 141 Front Street PO Box HM 845 Hamilton HM 19,Bermuda 441-295-0006 (Address,includ

81、ing 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,$.01 par value per share Name of Each Exchange on Which Registered New York Stock Exchange Securities registered

82、 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 mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.YES NO X

83、 Indicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such fi

84、ling requirements for the past 90 days.YES X NO Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was req

85、uired to submit such files).YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation 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

86、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 accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated

87、 filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer X Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company Indicate by check mark if the registrant is an emerging growth company and has elected

88、not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange act.YES NO X Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).YES NO X The ag

89、gregate market value on June 30,2018,the last business day of the registrants most recently completed second quarter,of the voting shares held by non-affiliates of the registrant was$9,417,452 thousand.At February 1,2019,the number of shares outstanding of the registrants common shares was 40,675,22

90、1.DOCUMENTS INCORPORATED BY REFERENCE Certain information required by Items 10,11,12,13 and 14 of Form 10-K is incorporated by reference into Part III hereof from the registrants proxy statement for the 2018 Annual General Meeting of Shareholders,which will be filed with the Securities and Exchange

91、Commission within 120 days of the close of the registrants fiscal year ended December 31,2018.E EVEREST RE GROUP,LTD TABLE OF CONTENTS FORM 10-K VEREST RE GROUP,LTD TABLE OF CONTENTS FORM 10-K PagePage PART IPART I Item 1.Business 1 Item 1A.Risk Factors 25 Item 1B.Unresolved Staff Comments 37 Item 2

92、.Properties 38 Item 3.Legal Proceedings 38 Item 4.Mine Safety Disclosures 38 PART IIPART II Item 5.Market for Registrants Common Equity,Related Shareholder Matters and Issuer Purchases of Equity Securities 38 Item 6.Selected Financial Data 41 Item 7.Managements Discussion and Analysis of Financial C

93、ondition and Results of Operations 42 Item 7A.Quantitative and Qualitative Disclosures About Market Risk 78 Item 8.Financial Statements and Supplementary Data 78 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 78 Item 9A.Controls and Procedures 78 Item 9B.

94、Other Information 79 PART IIIPART III Item 10.Directors,Executive Officers and Corporate Governance 79 Item 11.Executive Compensation 79 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 79 Item 13.Certain Relationships and Related Transactions,an

95、d Director Independence 79 Item 14.Principal Accountant Fees and Services 80 PART IVPART IV Item 15.Exhibits and Financial Statement Schedules 80 1 P PART I ART I Unless otherwise indicated,all financial data in this document have been prepared using accounting principles generally accepted in the U

96、nited States of America(“GAAP”).As used in this document,“Group”means Everest Re Group,Ltd.;“Holdings Ireland”means Everest Underwriting Group(Ireland)Limited;“Ireland Re”means Everest Reinsurance Company(Ireland),designated activity company;“Holdings”means Everest Reinsurance Holdings,Inc.;“Everest

97、 Re”means Everest Reinsurance Company and its subsidiaries(unless the context otherwise requires);and the“Company”,“we”,“us”,and“our”means Everest Re Group,Ltd.and its subsidiaries.ITEM 1.BUSINESS The Company.ITEM 1.BUSINESS The Company.Group,a Bermuda company,was established in 1999 as a wholly-own

98、ed subsidiary of Holdings.On February 24,2000,a corporate restructuring was completed and Group became the new parent holding company of Holdings.Holdings continues to be the holding company for the Companys U.S.based operations.Holders of shares of common stock of Holdings automatically became hold

99、ers 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 any business or prior activities other than in connection with the restructuring.In connection with the February 24,2000 restructuring,Group establishe

100、d a Bermuda-based reinsurance subsidiary,Everest Reinsurance(Bermuda),Ltd.(“Bermuda Re”),which commenced business in the second half of 2000.Group also formed Everest Global Services,Inc.,a Delaware subsidiary,to perform administrative functions for Group and its U.S.based and non-U.S.based subsidia

101、ries.On December 30,2008,Group contributed Holdings to its Irish holding company,Holdings Ireland.Holdings Ireland is a direct subsidiary of Group and was established to serve as a holding company for the U.S.and Irish reinsurance and insurance subsidiaries.Effective July 1,2016,the Company establis

102、hed a new Irish holding company,Everest Dublin Insurance Holdings Limited(Ireland)(“Everest Dublin Holdings”)and contributed Ireland Re to Everest Dublin Holdings.Holdings,a Delaware corporation,was established in 1993 to serve as the parent holding company of Everest Re,a Delaware property and casu

103、alty reinsurer formed in 1973.Until October 6,1995,Holdings 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.During the fourth quarter of 2017,t

104、he Company established a new Irish insurance subsidiary,Everest Insurance Ireland,designated activity company(“Ireland Insurance”),which writes insurance business mainly in the European markets.During the third quarter of 2016,the Company established domestic subsidiaries,Everest Premier Insurance C

105、ompany(“Everest Premier”)and Everest Denali Insurance Company(“Everest Denali”),which are being used in the continued expansion of the Insurance operations.Effective August 24,2016,the Company sold its wholly-owned subsidiary,Heartland Crop Insurance Company(“Heartland”),a managing agent for crop in

106、surance,to CGB Diversified Services,Inc.(“CGB”).The operating results of Heartland for the period owned are included within 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

107、and international markets.The Company had gross written premiums,in 2018,of$8.5 billion with approximately 73%representing reinsurance and 27%representing insurance.Shareholders equity at December 31,2018 was$7.9 billion.The Company underwrites reinsurance both through brokers and directly with cedi

108、ng companies,giving it the flexibility to pursue business based on the ceding companys preferred reinsurance purchasing method.The Company underwrites insurance principally through brokers,surplus lines brokers and general agent relationships.Groups active operating subsidiaries,other than Ireland I

109、nsurance which is not yet rated,are each rated A+(“Superior”)by 2 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.Following is a summary of the Companys

110、 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 in the second ha

111、lf of 2000.Bermuda Res UK branch writes property and casualty reinsurance to the United Kingdom and European markets.At December 31,2018,Bermuda Re had shareholders equity of$3.1 billion.?Everest International Reinsurance,Ltd.(“Everest International”),a Bermuda insurance company and a direct subsidi

112、ary of Group,is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business.Through 2018,all of Everest Internationals business has been inter-affiliate quota share reinsurance assumed from Everest Re,the UK branch of Bermuda Re,Ireland Re and Ireland Insuran

113、ce.In 2015,Everest International issued additional capital as part of a capital restructuring initiative within the Company to support a planned increase in international business production,which includes supporting Groups Lloyds of London Syndicate corporate member.At December 31,2018,Everest Inte

114、rnational had shareholders equity of$2.7 billion.?Ireland Re,an Ireland reinsurance company and an indirect subsidiary of Group,is licensed to write non-life reinsurance,both directly and through brokers,for the London and European markets.?Ireland Insurance,an Ireland insurance company and an indir

115、ect subsidiary of Group,is licensed to write insurance for the 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 Columbia,Puerto Rico and Guam and is authorized to c

116、onduct 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 31,2018,Everest Re had statutory surplus of$3.7 billion.?Everest Insurance Company of Canada(“E

117、verest 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 direct subsidiary of Everest Re,is licensed

118、 in 50 states,the District of Columbia and Puerto Rico 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 Indemnity Insurance Company(“E

119、verest 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 not licensed to write insurance

120、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 District of Columbia and Puerto Rico

121、.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 Georgia and Alabama and is appro

122、ved as an eligible surplus lines insurer in Delaware.The majority of Everest Securitys business is reinsured by its parent,Everest Re.3?Everest International Assurance,Ltd.(“Everest Assurance”),a Bermuda company and a direct subsidiary of Holdings is registered in Bermuda as a Class 3A general busin

123、ess insurer and as a Class C long-term insurer.Everest Assurance has made a one-time election under section 953(d)of the U.S.Internal Revenue Code to be a U.S.income tax paying“Controlled Foreign Corporation.”By making this election,Everest Assurance is authorized to write life reinsurance and casua

124、lty reinsurance in both Bermuda and the U.S.?Everest Denali,a Delaware insurance company and a direct subsidiary of Everest Re,is licensed to write property and casualty insurance in 49 states and the District of Columbia.?Everest Premier,a Delaware insurance company and a direct subsidiary of Evere

125、st Re,is licensed to write property and casualty insurance in 49 states and the District of Columbia.?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 Nat

126、ional.Effective August 24,2016,the Company sold Heartland to CGB.The operating results of Heartland for the period owned are included within the Companys financial statements.R Reinsurance Industry Overview.einsurance Industry Overview.Reinsurance is an arrangement in which an insurance company,the

127、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 contracts.Reinsurance can provide a ceding company with several benefits,including a reduction in i

128、ts 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 reserves to capital.Reinsurance also provides a ceding company with additional underwriting capacity

129、 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 liability to policyholders;rather,it reimburses the ceding company for covered losses.There are two

130、 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 insured by the ceding company.Treaty reinsurers do not separately evaluate each of the individual ris

131、ks 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 assumes all or part of the risk under a single insurance contract.Facultative reinsurance is negot

132、iated 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 treaties because of the dollar limits involved or because the risk is unusual.Both treaty and facul

133、tative 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 expenses in an agreed proportion.Under excess of loss reinsurance,the reinsurer indemnifies the ceding

134、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 negotiated reinsurance contract limit.In pro rata reinsurance,the reinsurer generally pays the ceding

135、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 administrative expense and may contain profit sharing provisions,whereby the ceding commission is adjuste

136、d 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 reinsurer does not assume a proportionate risk.There is usually no ceding commission on excess of l

137、oss reinsurance.4 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 agreements to other reinsurers,known as retrocessionaires,for reasons similar to those that cause

138、 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.Reinsurance can be written through intermediaries,generally professional reinsurance brokers,or direc

139、tly 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 channel over the other will be influenced by its perception of such advantages and disadvantages relati

140、ve to the reinsurance coverage being placed.B Business Strategy.usiness Strategy.The Companys business strategy is to sustain its leadership position within targeted reinsurance and insurance markets,provide effective management throughout the property and casualty underwriting cycle and thereby ach

141、ieve 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 team,iv)diversified product and distribution offerings,v)underwriting expertise and disciplined ap

142、proach,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.The Companys products include the full range of property and casualty reinsurance and insurance co

143、verages,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 compensation.The Companys underwriting strategies emphasizes underwriting profitability over premium

144、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 conditions.The Company focuses on reinsuring companies that effectively manage the underwriting cy

145、cle through proper analysis and pricing of underlying risks and whose underwriting guidelines and performance are compatible with its objectives.The Companys underwriting strategies emphasize flexibility and responsiveness to changing market conditions.The Company believes that its existing strength

146、s,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 of coverage,allowing it to participate in those market opportunities that provide the greatest po

147、tential 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 mix of business across all operations to avoid unacceptable geographic or other risk concentratio

148、ns.Commencing in 2015 the Company initiated a strategic build out of its insurance platform through the investment in key leadership hires which in turn has brought significant underwriting talent and stronger direction in achieving its insurance program strategic goals of increased premium volume a

149、nd improved underwriting results.Recent growth is coming from highly diversified areas including newly launched lines of business,as well as product and geographic expansion in existing lines of business.The Company is building a world-class insurance platform capable of offering products across lin

150、es and geographies,complementing its leading global reinsurance franchise.As part of this initiative,the Company launched a new syndicate through Lloyds of London and formed Ireland Insurance,providing access to additional international business and new product opportunities to further diversify and

151、 broaden its insurance portfolio going forward.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 dependent on any single customer,small group of customers,l

152、ine of business or geographic area.For the 2018 calendar year,no single customer(ceding company or insured)generated more than 3%of the Companys gross written premiums.The 5 Company believes that a reduction of business from any one customer would not have a material adverse effect on its future fin

153、ancial condition or results of operations.Approximately 66%,27%and 7%of the Companys 2018 gross written premiums were written in the broker reinsurance,insurance and direct reinsurance markets,respectively.The broker reinsurance market consists of several substantial national and international broke

154、rs 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 business from any ceding company,whether new or renewal

155、,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 52%of gross written premiums in 2018.The largest broker,Marsh and McLennan,accounted for approximately 20%of gross written premiums.Th

156、e second largest broker,Aon Benfield Re,accounted for approximately 16%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 reinsurance market remains an important distribution chann

157、el 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 companys needs.The Companys insurance business writes

158、 direct business targeting commercial,property and casualty.It also writes business through brokers,surplus lines brokers and general agents.In 2018,Arrowhead General Insurance Agency accounted for approximately 3%of the Companys gross written premium.No other single general agent generated more tha

159、n 2%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 financial security,monitors performance and adjusts unde

160、rwriting decisions accordingly.S Segment Results.egment Results.The U.S.Reinsurance operation writes property and casualty reinsurance and specialty lines of business,including Marine,Aviation,Surety and Accident and Health(“A&H”)business,on both a treaty and facultative basis,through reinsurance br

161、okers,as well as directly with ceding companies primarily within the U.S.The International operation writes non-U.S.property and casualty reinsurance through Everest Res branches in Canada and Singapore and through offices in Brazil,Miami and New Jersey.The Bermuda operation provides reinsurance and

162、 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 casualty insurance directly and

163、 through brokers,surplus lines brokers and general agents within the U.S.,Canada and Europe.These segments are managed independently,but conform with corporate guidelines with respect to pricing,risk management,control of aggregate catastrophe exposures,capital,investments and support operations.Man

164、agement generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.Underwriting results include earned premium less losses and loss adjustment expenses(“LAE”)incurred,commission and brokerage expenses and other underwriting expenses.W

165、e measure our underwriting results using ratios,in particular loss,commission and brokerage and other underwriting expense ratios,which,respectively,divide incurred losses,commissions and brokerage and other underwriting expenses by premiums earned.The Company utilizes inter-affiliate reinsurance,al

166、though 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 17 of Notes to Co

167、nsolidated Financial Statements and ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operation-Segment Results”.6 U Underwriting Operations.nderwriting Operations.The following five year table presents the distribution of the Companys gross written premiums by its se

168、gments:U.S.Reinsurance,International,Bermuda and Insurance.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:(Dollars in millions)20182017201620152014U.S.ReinsuranceU.S.ReinsurancePropertyPr

169、o Rata(1)1,069.6$12.6%848.4$11.8%495.2$8.2%591.3$10.0%665.7$11.6%Excess1,031.9 12.2%1,085.2 15.1%1,054.2 17.5%1,065.3 18.1%887.6 15.4%CasualtyPro Rata(1)702.2 8.3%460.7 6.4%378.2 6.3%319.9 5.4%382.4 6.6%Excess210.6 2.5%198.7 2.8%198.2 3.3%171.3 2.9%218.8 3.8%Total(2)3,014.3 35.6%2,593.0 36.1%2,125.8

170、 35.2%2,147.9 36.5%2,154.5 37.4%International International PropertyPro Rata(1)679.8$8.0%577.5$8.1%671.9 11.1%699.3 11.9%846.0 14.7%Excess424.7 5.0%377.9 5.3%337.4 5.6%411.2 7.0%488.1 8.5%CasualtyPro Rata(1)281.0 3.3%236.4 3.3%111.7 1.9%113.4 1.9%152.9 2.7%Excess158.4 1.9%125.0 1.7%109.7 1.8%110.4 1

171、.9%116.5 2.0%Total(2)1,543.9 18.2%1,316.7 18.4%1,230.7 20.4%1,334.2 22.6%1,603.6 27.8%BermudaBermudaPropertyPro Rata(1)422.6$5.0%294.0$4.1%261.1 4.3%265.8 4.5%252.4 4.4%Excess229.4 2.7%222.0 3.1%175.5 2.9%165.3 2.8%183.8 3.2%CasualtyPro Rata(1)773.7 9.1%407.7 5.7%318.6 5.3%281.0 4.8%178.5 3.1%Excess

172、240.6 2.8%281.2 3.9%135.2 2.2%165.2 2.8%171.7 3.0%Total(2)1,666.3 19.7%1,205.0 16.8%890.4 14.8%877.3 14.9%786.4 13.7%Total ReinsuranceTotal ReinsurancePropertyPro Rata(1)2,172.0$25.6%1,719.9$24.0%1,428.2 23.7%1,556.4 26.4%1,764.1 30.6%Excess1,686.0 19.9%1,685.1 23.5%1,567.1 26.0%1,641.8 27.9%1,559.5

173、 27.1%CasualtyPro Rata(1)1,756.9 20.7%1,104.8 15.4%808.5 13.4%714.3 12.1%713.8 12.4%Excess609.7 7.2%604.9 8.4%443.1 7.3%446.9 7.6%507.0 8.8%Total(2)6,224.6 73.4%5,114.7 71.3%4,246.9 70.4%4,359.4 74.0%4,544.5 78.9%InsuranceInsurancePropertyPro Rata(1)645.9$7.6%725.1$10.1%716.4 11.9%592.2 10.1%414.0 7

174、.2%Excess-0.0%-0.0%-0.0%-0.0%-0.0%CasualtyPro Rata(1)1,604.6 18.9%1,334.1 18.6%1,070.6 17.7%940.1 16.0%804.4 14.0%Excess-0.0%-0.0%-0.0%-0.0%-0.0%Total(2)2,250.6 26.6%2,059.2 28.7%1,787.0 29.6%1,532.3 26.0%1,218.4 21.1%Total CompanyTotal CompanyPropertyPro Rata(1)2,818.0$33.2%2,445.1$34.1%2,144.6 35.

175、5%2,148.6 36.5%2,178.1 37.8%Excess1,686.0 19.9%1,685.1 23.5%1,567.1 26.0%1,641.8 27.9%1,559.5 27.1%CasualtyPro Rata(1)3,361.5 39.7%2,438.9 34.0%1,879.1 31.1%1,654.3 28.1%1,518.2 26.3%Excess609.7 7.2%604.9 8.4%443.1 7.3%446.9 7.6%507.0 8.8%Total(2)8,475.2 100.0%7,173.9 100.0%6,033.9$100.0%5,891.7$100

176、.0%5,762.9$100.0%_(1)For purposes of the presentation above,pro rata includes all insurance and reinsurance attaching to the first dollar of loss incurred by the ceding company.(2)Certain totals and subtotals may not reconcile due to rounding.Gross Written Premiums by SegmentYears Ended December 31,

177、2018 7 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 business,on both a treaty and facultative basis,through reinsurance brokers,as well as directly with ceding companies

178、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 contract surety bonds.The Company targets certain brokers and,through the broker market,specialty companies and sm

179、all 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 companies,and seeks to develop long-term relationships with those companies.In addition,the U.S.Reinsurance seg

180、ment writes portions of reinsurance programs for large,national insurance companies.In 2018,$1,970.0 million of gross written premiums were attributable to U.S.treaty property business,of which 52.2%was written on a pro rata basis and 47.8%was written on an excess of loss basis.The Companys property

181、 underwriters utilize sophisticated underwriting methods to analyze and price property business.The Company manages its exposures to catastrophe and other large losses by limiting exposures on individual contracts and limiting aggregate exposures to catastrophes in any particular zone and across con

182、tiguous zones.U.S.treaty casualty business accounted for$734.4 million of gross written premiums in 2018,of which 85.6%was written on a pro rata basis and 14.4%was written on an excess of loss basis.The treaty casualty business consists of professional liability,D&O liability,workers compensation,fi

183、nancial lines,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 business and work closely with the Companys pricing actuaries.The Companys facultative unit conduct

184、s 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 from a facultative headquarters office in New York and satellite offices in Chicago and Oakland.In 2

185、018,$92.7 million,$39.1 million and$15.5 million of gross written premiums were attributable to the casualty,property and national brokerage lines of business,respectively.The marine and aviation units 2018 gross written premiums totaled$86.2 million,all of which was written on a treaty basis and pr

186、imarily sourced through reinsurance brokers.Of the marine and aviation gross written premiums in 2018,marine treaties represented 59.0%and consisted mainly of hull and cargo coverage.In 2018,the marine units premiums were written 65.3%on an excess of loss basis and 34.7%on a pro rata basis.Of the ma

187、rine and aviation gross written premiums in 2018,aviation premiums accounted for 41.0%and included reinsurance of airline and general aviation risks.In 2018,the aviation units premiums were written 89.5%on a pro rata basis and 10.5%on an excess of loss basis.In 2018,gross written premiums of the sur

188、ety unit totaled$50.3 million,81.1%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 being trade credit reinsurance,mostly in international markets.In 2018,gross written premium of the A&H

189、reinsurance unit totaled$15.5 million,of which 74.5%was written through brokers.The Company writes assumed business with the segregated cells of Mt.Logan Re Ltd.(Bermuda)(“Mt.Logan Re”)which represents a diversified set of catastrophe exposures,diversified by risk/peril and across different geograph

190、ical regions globally.In 2018,gross written premium totaled$10.6 million,which was all on a property excess of loss basis.In 2018,95.9%and 4.1%of the U.S.Reinsurance segments gross written premiums were written in the broker reinsurance and direct reinsurance markets,respectively.International Segme

191、nt.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 its Lloyds Syndicate;and Latin America,Brazil,Africa and the 8 Middl

192、e 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 2018 international gross written premiums,71.5%represented property

193、 business,while 28.5%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,70.9%was written through brokers,with 2

194、9.1%written directly with ceding companies.Gross written premiums of the Companys Canadian branch totaled$173.5 million in 2018 and consisted of 35.0%of excess property business,25.5%of pro rata casualty business,21.5%of excess casualty business,and 18.0%of pro rata property business.Of the Canadian

195、 gross written premiums,75.2%consisted of treaty reinsurance,while 24.8%was facultative reinsurance.The Companys Singapore branch covers the Asian markets and accounted for$199.8 million of gross written premiums in 2018 and consisted of 50.8%of excess property business,36.8%of pro rata property bus

196、iness,9.5%of pro rata casualty business and 2.9%of excess casualty business.Gross written premium of the Companys Singapore Lloyds Syndicate totaled$4.1 million primarily on property business.International business written out of Everest Res Miami and New Jersey offices accounted for$1,166.5 million

197、 of gross written premiums in 2018 and consisted of 45.9%of pro rata treaty property business,19.4%of excess treaty property business,18.4%of pro rata treaty casualty business,13.3%of facultative property and casualty business and 3.0%of excess treaty casualty business.Of this international business

198、,60.5%was sourced from Latin America,22.0%was sourced from the Middle East,11.0%was home-foreign business and 6.5%was sourced from Africa.Bermuda Segment.The Companys Bermuda segment writes property and casualty reinsurance through Bermuda Re and property and casualty reinsurance through its UK bran

199、ch as well as through Ireland Re.In 2018,Bermuda Re had gross written premiums of$761.7 million,virtually all of which was treaty reinsurance.In 2018,the UK branch of Bermuda Re wrote$610.8 million of gross treaty reinsurance premium consisting of 59.8%of pro rata casualty business,20.0%of excess ca

200、sualty business,11.1%of pro rata property business and 9.1%of excess property business.In 2018,Ireland Re wrote$293.8 million of gross treaty reinsurance premium consisting of 34.7%of pro rata casualty business,28.0%of pro rata property business,19.9%of excess property business,and 17.4%of excess ca

201、sualty business.Insurance Segment.The Insurance segment writes property and casualty insurance,including medical stop loss insurance,directly and through brokers,surplus lines brokers and general agents within the U.S.,Canada and through the Companys Lloyds Syndicate.In 2018,the Companys Insurance s

202、egment wrote$2,250.6 million of gross written premiums,of which 71.0%was casualty and 29.0%was property,principally targeting commercial property and casualty business.Insurance business written directly through the Companys offices represented$1,576.0 million or 70.0%of the segments premium and$674

203、.6 million or 30%was written through program administrators.The Everest Specialty Commercial unit wrote$998.2 million in premium comprised of primary and excess casualty,and sports,leisure and entertainment business of$579.0 million,direct monoline workers compensation writings of$190.0 million and

204、property business of$229.2 million.Everest Underwriting Partners unit wrote$458.8 million in premium comprised of$210.8 million in workers compensation program business,$46.3 million of non-standard auto business and$201.7 million of other property and casualty business.A&H primary insurance wrote$2

205、78.9 million in premium,Lloyds Syndicate wrote$151.4 million and our Canadian offices wrote$77.2 million.The Everest Specialty Underwriters unit wrote$286.1 million in premium consisting primarily of management and professional liability coverages for financial institutions and other commercial ente

206、rprises.9 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,see ITEM 8,“Financial Statements and Supplementary Data”-Note 17 of Notes to the Consolidated Financial Statements.Risks attendant

207、 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 information about the risks,see ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Safe Harb

208、or Disclosure”.U Underwriting.nderwriting.One of the Companys strategies is to lead as many of the reinsurance treaties it underwrites as possible.The Company leads on approximately two-thirds of its treaty reinsurance business as measured by premium.The lead reinsurer on a treaty generally accepts

209、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 to obtain more favorable terms and conditions on the treaties on which it participates.When the Company does not lead the treaty,it

210、 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 treaty underwriting process involves a team approach among the Companys underwriters,actuaries and claim staff.Treaties are reviewe

211、d for compliance with the Companys general underwriting standards and most larger treaties are subjected to detailed actuarial analysis.The actuarial models used in such analyses are tailored in each case to the subject exposures and loss experience.The Company does not separately evaluate each of t

212、he individual risks assumed under its treaties.The Company does,however,evaluate the underwriting guidelines of its ceding companies to determine their adequacy prior to entering into a treaty.The Company may also conduct underwriting,operational and claim audits at the offices of ceding companies t

213、o monitor adherence to underwriting guidelines.Underwriting audits focus on the quality of the underwriting staff,pricing and risk selection and rate monitoring over time.Claim audits may be performed in order to evaluate the clients claims handling abilities and practices.The Companys facultative u

214、nderwriters operate within guidelines specifying acceptable types of risks,limits and maximum risk exposures.Specified classes of large premium U.S.risks are referred to Everest Res New York facultative headquarters for specific review before premium quotations are given to clients.In addition,the C

215、ompanys guidelines require certain types of risks to be submitted for review because of their aggregate limits,complexity or volatility,regardless of premium amount on the underlying contract.Non-U.S.risks exhibiting similar characteristics are reviewed by senior managers within the involved operati

216、ons.In addition to its own underwriting staff,the Companys insurance operations write casualty coverages for homogeneous risks through select program managers.These programs are evaluated based upon actuarial analysis and the program managers capabilities.The Companys rates,forms and underwriting gu

217、idelines are tailored to specific risk types.The Companys underwriting,actuarial,claim and financial functions work closely with its program managers to establish appropriate underwriting and processing guidelines as well as appropriate performance monitoring mechanisms.Risk Management of Underwriti

218、ng and Reinsurance Arrangements Risk Management of Underwriting and Reinsurance Arrangements Underwriting Risk and Accumulation Controls.Each segment and business unit manages its underwriting risk in accordance with established guidelines.These guidelines place dollar limits on the amount of busine

219、ss that can be written based on a variety of factors,including(re)insured company profile,line of business,geographic location and risk hazards.In each case,the guidelines permit limited exceptions,which must be authorized by the Companys senior management.Management regularly reviews and revises th

220、ese guidelines in response to changes in business unit product offerings,market conditions,risk versus reward analyses and the Companys enterprise and underwriting risk management processes.10 The operating results and financial condition of the Company can be adversely affected by catastrophe and o

221、ther 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 classes of business;?limiting its aggregate catastrophe loss exposure in any particular geographic zone

222、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”.Like other insurance and reinsurance companies,the Company is exposed to multiple insured losses arising out o

223、f 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 generate insured losses to multiple reinsurance treaties,facultative certificates and direct insurance policie

224、s 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 exposures to catastrophic events.Accordingly,the Company employs various techniques to estimate the amount

225、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 exposed in catastrophe-prone zones and applying reasonable damage factors,to modeled approaches that atte

226、mpt 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 single computer model,or group of models,is currently capable of projecting the amount and probability of

227、 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(re)insureds is not uniformly compatible with the data requirements for the Companys licensed models,which adds to the inherent impreci

228、sion 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 most models have been updated to incorporate claims information from recent catastrophic events,catastrophe mod

229、el 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 based on historical data.Nevertheless,when combined with traditional risk management techniques and sound underwri

230、ting 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 manage catastrophic risk exposures by zone and across zones for individual and multiple events.Projected catastroph

231、e 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 single catastrophe affecting a broad contiguous geographic area,such as that caused by a hurricane or earthquake.Th

232、e 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“100-year events”and“250-year events”.For example,a 100-year PML is the estimated loss to the current in-force p

233、ortfolio 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 fall below the indicated PML.It is important to note that PMLs are estimates.Modeled events are hypothetical even

234、ts 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 events will not vary materially from the modeled event PML.11 From an enterprise risk management perspective,manage

235、ment 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 Companys financial resources and expected earnings and risk/reward analyses of the business being underwritten.The

236、 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 coverage and market conditions including the pricing,terms,conditions,avail

237、ability and collectability of coverage,with the aim of securing cost effective protection from financially secure counterparties.The amount of reinsurance purchased has varied over time,reflecting the Companys view of its exposures and the cost of reinsurance.Management estimates that the projected

238、net economic loss from its largest 100-year event in a given zone represents approximately 10%of its December 31,2018 shareholders equity.Economic loss is the PML exposure,net of third party reinsurance,reduced by estimated reinstatement premiums to renew coverage and estimated income taxes.The impa

239、ct 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 PMLs at multiple points along the loss distribution curve,such as loss amounts at the 20,50,100,250,500

240、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 decisions.The Companys catastrophe loss projections,segmented by risk zones,are updated quarterly and

241、reviewed as part of a formal risk management review process.The table below reflects the Companys PML exposure,net of third party reinsurance at various return periods for its top three zones/perils(as ranked by the largest 1 in 100 year economic loss)based on loss projection data as of January 1,20

242、19,adjusted to reflect Industry Loss Warranty(ILW)purchases at the same level the Company had available during 2018.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/PerilSoutheast U.S.,Wind639$888$1,036$1,3

243、15$1,583$2,444$California,Earthquake136 470 781 1,132 1,302 1,571 Texas,Wind158 467 769 1,077 1,152 1,236 The projected net economic losses,defined as PML exposures,net of third party reinsurance,reinstatement premiums and estimated income taxes,for the top three zones/perils scheduled above are as

244、follows: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/PerilSoutheast U.S.,Wind440$636$759$986$1,198$1,883$California,Earthquake111 374 626 903 1,045 1,255 Texas,Wind121 354 578 809 871 941 The Company be

245、lieves that its methods of monitoring,analyzing and managing catastrophe 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 catastro

246、phe models and the catastrophe loss estimation process generally.As 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 wi

247、ll not experience events impacting multiple zones,or multiple severe events that could,in the aggregate,exceed the Companys PML expectations by a significant amount.12 Terrorism Risk.While the Company writes some reinsurance contracts covering terrorism,the Companys risk management philosophy is to

248、limit the amount of exposure by geographic region,and to strictly manage 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 contain exclusions which limit much of this risk.

249、While many property insurance policies are required to offer coverage for terrorism,this coverage is often not purchased.However,terrorism is typically covered by worker compensation policies.As a result,the Company is exposed to losses from terrorism on both its reinsurance and its insurance book o

250、f 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.Terrorism Risk Insurance Program Reauthorization Act of 2015 provides some protect

251、ion to the insurance book of business.It also provides indirect protection to exposed reinsurance treaties.However,the Company is still exposed to risk of loss from terrorism due to deductibles,co-pays and uncovered lines of business.Reinsurance and Retrocession Arrangements.The Company may purchase

252、 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 coverage and market conditions including the pricing,terms,conditions and availability of covera

253、ge,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 Company has increased its use of reinsurance offered through capital market facilities.The Comp

254、any 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 of its reinsurance treaties.Common account retrocessional arrangements reduce the effect of in

255、dividual 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 significant reinsurance risk and therefore,are accounted for as reinsurance in accordance with the Fin

256、ancial Accounting Standards Board(“FASB”)guidance.At December 31,2018,the Company had$1,787.6 million in reinsurance receivables with respect to both paid and unpaid losses ceded.Of this amount,$683.8 million,or 38.3%,was receivable from Mt.Logan Re collateralized segregated accounts;$125.5 million,

257、or 7.0%,was receivable from Munich Reinsurance America,Inc.(“Munich Re”)$122.1 million,or 6.8%,was receivable from Zurich Versicherungs Gesellschaft(“Zurich”);and$103.1 million,or 5.8%,was receivable from Resolution Group Reinsurance(Barbados)Limited(“Resolution Group”);.The receivables from Resolut

258、ion Group are fully collateralized by an individual trust agreement.No other retrocessionaire accounted for more than 5%of our receivables.Although management carefully selects its reinsurers,the Company is subject to credit risk with respect to its reinsurance because the ceding of risk to reinsure

259、rs 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 Financial Condition”.Claims.Claims.Reinsurance claims are managed by the Companys professional claims staff whose responsi

260、bilities include reviewing initial loss reports and coverage issues,monitoring claims handling activities of ceding companies,establishing and adjusting proper case reserves and approving payment of claims.In addition to claims assessment,processing and payment,the claims staff selectively conducts

261、comprehensive claim audits of both specific claims and overall claim procedures at the offices of selected ceding companies.Insurance claims are generally handled by third party claims service providers who have limited authority and are subject to oversight by the Companys professional claims staff

262、.13 The Company intensively manages its asbestos and environmental(“A&E”)exposures through a dedicated,centrally managed claim staff with experienced claim and legal professionals who specialize in the handling of such exposures.They actively manage each individual insured and reinsured account,resp

263、onding to claim developments with evaluations of the involved exposures and adjustment 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 mana

264、gement and claim management personnel meet at least quarterly to review the Companys 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

265、regard to changes in asbestos claims and litigation.R Reserves for Unpaid Property and Casualty Losses and LAE.eserves 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 rei

266、nsurer and the payment of that loss by the insurer and subsequent payments to the 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

267、 and unreported claims and related expenses for losses that have already occurred.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,th

268、e Company would have to recognize such reserve shortfalls and incur a charge to 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

269、 process,insurers and reinsurers evaluate historical data and trends and make judgments 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 a

270、nd general economic trends.While the reserving process is difficult and subjective 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 c

271、laims to the reinsurer,the diversity of development patterns among different types 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 tha

272、t have affected development of liabilities in the past may not necessarily occur 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 consolidate

273、d financial statements.The Companys loss and LAE 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

274、reduce the likelihood that any such increases would 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 ar

275、e intended to be covered by the safe harbor provisions contained therein.See ITEM 7,“Managements Discussion and Analysis of Financial Condition and Results of Operations Safe Harbor Disclosure”.Like many other property and casualty insurance and reinsurance companies,the Company has experienced loss

276、 development for prior accident years,which has impacted losses and LAE reserves and caused corresponding effects to income(loss)in the periods in which the adjustments were made.There can be no assurance that adverse development from prior years will not occur in the future or that such adverse dev

277、elopment will not have a material adverse effect on net income(loss).14 The following table presents a reconciliation of beginning and ending reserve balances for the periods indicated on a GAAP basis:(Dollars in millions)201820172016Gross reserves at beginning of period11,884.3$10,312.3$9,951.8$Inc

278、urred related to:Current year5,264.3 4,816.0 3,434.9 Prior years387.1 (293.4)(295.3)Total incurred losses5,651.4 4,522.6 3,139.6 Paid related to:Current year 1,700.7 1,280.6 745.6 Prior years3,011.2 2,062.6 2,043.0 Total paid losses4,711.9 3,343.2 2,788.6 Foreign exchange/translation adjustment(111.

279、7)170.9 (99.9)Change in reinsurance receivables on unpaid losses and LAE407.0 221.8 109.4 Gross reserves at end of period13,119.1$11,884.3$10,312.3$(Some amounts may not reconcile due to rounding.)Years Ended December 31,Current year incurred losses were$5,264.3 million,$4,816.0 million and$3,434.9

280、million at December 31,2018,2017 and 2016,respectively.The increase in current year incurred losses was primarily due to an increase in attritional losses due to a 16.7%increase in premiums earned.The$407.0 million increase in reinsurance recoverables from December 31,2018 to December 31,2017 is pri

281、marily related to the additional catastrophe losses incurred in 2018 as well as a retroactive reinsurance transaction with a Mt.Logan Re segregated account effective in the second quarter of 2018.Incurred prior years reserves increased by$387.1 million in 2018 and decreased by$293.4 million and$295.

282、3 million in 2017 and 2016,respectively.The increase for 2018 was mainly due to$561.2 million of adverse development on prior years catastrophe losses,primarily related to Hurricanes Harvey,Irma and Maria,as well as the 2017 California wildfires.The increase in loss estimates for Hurricanes Harvey,I

283、rma and Maria was mostly driven by re-opened claims,loss inflation from higher than expected loss adjustment expenses and in particular,their impact on aggregate covers.This reserve increase was partially offset by$174.1 million of favorable development on prior years attritional losses which mainly

284、 related to U.S.and international property and casualty reinsurance business,as well as favorable development in the Insurance segment which largely related to workers compensation business.The decrease for 2017 was attributable to favorable development in the reinsurance segments of$238.4 million,r

285、elated primarily to property and short-tail business in the U.S.and Bermuda as well as favorable development on prior year catastrophe losses,partially offset by$37.1 million of adverse development on A&E reserves.The insurance segment also experienced favorable development on prior year reserves of

286、$55.0 million mainly on its workers compensation business,which is largely written in California.The decrease for 2016 was attributable to favorable development in the reinsurance segments of$468.7 million related primarily to property and short-tail business in the U.S.,property business in Canada,

287、Latin America,Middle East and Africa,as well as favorable development on prior year catastrophe losses,partially offset by$53.9 million of adverse development on asbestos and environmental(“A&E”)reserves.Part of the favorable development in the reinsurance segments related to the 2015 loss from the

288、explosion at the Chinese port of Tianjin.In 2015,this loss was originally estimated to be$60.0 million.At December 31,2016,this loss was projected to be$16.7 million resulting in$43.3 million of favorable development in 2016.The net favorable development in the reinsurance segments was partially off

289、set by$173.4 million of unfavorable development in the insurance segment primarily related to run-off construction liability and umbrella program business.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.dol

290、lars for each reporting period.Fluctuations in the 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.15

291、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 trend shifts and to factor the impact of such shifts into the Companys underwriting and pricing on a prospective basis.

292、R Reserves for Asbestos and Environmental Losses and LAE.eserves for Asbestos and Environmental Losses and LAE.At December 31,2018,the Companys gross reserves for A&E claims represented 2.6%of its total reserves.The Companys A&E liabilities stem from Mt.McKinleys direct insurance business and Everes

293、t Res assumed reinsurance business.Liabilities related to Mt.McKinleys direct business,which had been ceded to Bermuda Re previously,were retroceded to an affiliate of Clearwater Insurance Company in July 2015,concurrent with the sale of Mt.McKinley to Clearwater Insurance Company.There are signific

294、ant 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 and Results of Operations Asbestos and Environmental Expos

295、ures”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 the periods indicated:Years Ended December 31,(Dollars in m

296、illions)201820172016Gross reserves 347.5$449.0$441.1$Reinsurance receivable(86.0)(130.9)(122.0)Net reserves 261.5$318.1$319.1$(Some amounts may not reconcile due to rounding.)On July 13,2015,the Company sold Mt.McKinley to Clearwater Insurance Company.Concurrently with the closing,the Company entere

297、d into a retrocession treaty with an affiliate of Clearwater.Per the retrocession treaty,the Company retroceded 100%of the liabilities associated with certain Mt.McKinley policies,which had been reinsured by Bermuda Re.As consideration for entering into the retrocession treaty,Bermuda Re transferred

298、 cash of$140.3 million,an amount equal to the net loss reserves as of the closing date.Of the$140.3 million of net loss reserves retroceded,$100.5 million were related to A&E business.The maximum liability retroceded under the retrocession treaty will be$440.3 million,equal to the retrocession payme

299、nt plus$300.0 million.The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty.Additional losses,including those relating to latent injuries and other exposures,which are as yet unrecognized,the type or magnitude of which cannot be fo

300、reseen 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 Reserves.Future Policy Benefit Reserves.The Company wrote a limited am

301、ount 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 unreported

302、.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.16 Activity in the reserv

303、e for future policy benefits is summarized for the periods indicated:At December 31,(Dollars in millions)201820172016Balance at beginning of year51.0$55.1$58.9$Liabilities assumed0.1 0.1 0.2 Adjustments to reserves0.8 (0.4)0.3 Benefits paid in the current year(5.1)(3.7)(4.3)Balance at end of year46.

304、8$51.0$55.1$(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 Companys

305、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 as

306、 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.For the portion needed to satisfy global outstanding liabilities,the Company generally invests in taxable and tax-prefer

307、enced fixed income securities with an average credit quality of Aa3.For the U.S.portion of this portfolio,the Companys 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 positi

308、on.This global fixed maturity securities portfolio is externally managed by independent,professional investment managers 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:

309、1)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 and private loan securities and 5)private equity limited partnership investments.The objective of this por

310、tfolio diversification 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

311、asset classes 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 co

312、nditions.At December 31,2018,the market value of investments in these investment market sectors,carried at both market and fair value,approximated 52%of shareholders equity.The duration of an investment is based on the maturity of the security but also reflects the payment of interest and the possib

313、ility of early prepayments.The Companys fixed income investment guidelines include a general duration guideline.This investment duration guideline is established and periodically revised by management,which considers economic and business factors,as well as the Companys average duration of potential

314、 liabilities,which,at December 31,2018,is estimated at approximately 3.0 years,based on the estimated payouts of underwriting liabilities using standard duration calculations.The duration of the fixed income portfolio at December 31,2018 and 2017 was 3.0 years and 3.1 years,respectively.The Company

315、shortened the duration of its portfolio in recent years in response to very low available yields,particularly on securities with longer maturities.As a result,the Company has focused on purchasing high quality,shorter duration investments and investments with floating rate yields.These investments w

316、ill be less subject to decline in market value as interest rates rise in the future,as forecasted by most investment analysts.For each currency in which the Company has established substantial loss and LAE reserves,the Company seeks to maintain invested assets denominated in such currency in an amou

317、nt approximately equal to the 17 estimated liabilities.Approximately 29%of the Companys consolidated reserves for losses and LAE and unearned premiums represent amounts payable in foreign currencies.The Companys net investment income was$581.2 million,$542.9 million and$473.1 million for the years e

318、nded December 31,2018,2017 and 2016,respectively.The increase from 2017 to 2018 was primarily due to higher income from the growing fixed income portfolio and an increase in limited partnership income,partially offset by lower dividend income from our equity portfolio.The increase from 2016 to 2017

319、was primarily due to an increase in limited partnership income and higher income from the growing fixed income portfolio,partially offset by lower dividend income from our equity portfolio.The Company had net realized capital losses for 2018 of$127.1 million.In 2018,the Company recorded$67.3 million

320、 of net losses from fair value re-measurements,$51.7 million of net realized capital losses from sales of investments and$8.1 million of other-than-temporary impairments.In 2017,net realized capital gains were$153.2 million due to$139.0 million of net gains from fair value re-measurements and$21.3 m

321、illion of net realized capital gains from sales of investments,partially offset by$7.1 million of other-than-temporary impairments.In 2016,net realized capital losses were$7.2 million due to$31.6 million of other-than-temporary impairments on fixed maturity securities,$28.0 million of realized capit

322、al loss from the sale of its Heartland subsidiary and$6.7 million of net realized capital losses from sales of investments,partially offset by$59.1 million of gains due to fair value re-measurements.The Companys cash and invested assets totaled$18.4 billion at December 31,2018,which consisted of 87.

323、5%fixed maturities and cash,of which 91.8%were investment grade;8.6%other invested assets and 3.9%equity securities.The average maturity of fixed maturity securities was 3.9 years at December 31,2018,and their overall duration was 3.0 years.As of December 31,2018,the Company did not have any direct

324、investments in commercial real estate or direct commercial mortgages or any material holdings of derivative investments(other than equity index put option contracts as discussed in ITEM 8,“Financial Statements and Supplementary Data”-Note 4 of Notes to Consolidated Financial Statements)or securities

325、 of issuers that are experiencing cash flow difficulty to an extent that the Companys management believes could threaten the issuers ability to meet debt service payments,except where other-than-temporary impairments have been recognized.The Companys investment portfolio includes structured commerci

326、al mortgage-backed securities(“CMBS”)with a book value of$329.9 million and a market value of$326.7 million.CMBS securities comprising more than 97%of the December 31,2018 market value are rated AAA by Standard&Poors Financial Services LLC(“Standard&Poors”).Furthermore,CMBS securities comprising mor

327、e than 98%of the market value are rated investment grade by Standard&Poors.The following table reflects investment results for the Company for the periods indicated:December 31,Pre-taxPre-tax Pre-taxPre-taxRealized NetUnrealized NetAverageInvestmentEffectiveCapital(Losses)Capital Gains(Dollars in mi

328、llions)Investments(1)Income(2)YieldGains(3)(Losses)18,430.8$581.2$3.15%(127.1)$(250.9)$17,840.2 542.9 3.04%153.2 (94.8)16,967.2 473.1 2.79%(7.2)96.6 16,692.8 473.5 2.84%(184.1)(194.0)16,487.5 530.5 3.22%84.0 20.3 20182017201620152014 (1)Average of the beginning and ending carrying values of investme

329、nts and cash,less net funds held,future policy benefit reserve,and non-interest bearing cash.Bonds,common stock and redeemable and non-redeemable preferred stocks are carried at market value.Common stock,which are actively managed,are carried at fair value.(2)After investment expenses,excluding real

330、ized net capital gains(losses).(3)Included in 2018,2017,2016,2015 and 2014 are fair value re-measurements of($67.3)million,$139.0 million,$59.1 million,($45.6)million and$121.7 million,respectively.(Some amounts may not reconcile due to rounding.)18 The amortized cost,market value and gross unrealiz

331、ed appreciation and depreciation of available for sale,fixed maturity,equity security investments,carried at market value and other-than-temporary impairments(“OTTI”)in accumulated other comprehensive income(“AOCI”)are as follows for the periods indicated:At December 31,2018AmortizedUnrealizedUnreal

332、izedMarketOTTI in AOCI(Dollars in thousands)CostAppreciationDepreciationValue(a)Fixed maturity securities U.S.Treasury securities and obligations of U.S.government agencies and corporations2,629.5$16.8$(15.2)$2,631.1$-$Obligations of U.S.states and political subdivisions490.0 12.9 (2.8)500.1 0.4 Cor

333、porate securities5,538.6 48.5 (141.6)5,445.5 1.7 Asset-backed securities545.4 0.2 (5.5)540.1 -Mortgage-backed securitiesCommercial329.9 2.2 (5.4)326.7 -Agency residential1,832.8 7.3 (43.8)1,796.3 -Non-agency residential10.2 -10.2 -Foreign government securities1,335.3 34.7 (55.8)1,314.2 0.1 Foreign corporate securities2,694.9 64.0 (97.8)2,661.1 0.3 Total fixed maturity securities15,406.6$186.6$(367