Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2022

___ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-15731

EVEREST RE GROUP, LTD.

(Exact name of registrant as specified in its charter)

Bermuda		98-0365432
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Seon Place – 4th Floor

141 Front Street

PO Box HM 845

Hamilton****HM 19, Bermuda

**441-**295-0006

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive office)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes	X		No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes	X		No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	X		Accelerated filer
Non-accelerated filer			Smaller reporting company
			Emerging growth company

Indicate by check mark if the registrant is an emerging growth company and has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange act.

YES			NO	X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES			NO	X

Securities registered pursuant to Section 12(b) of the Act:

Class	Trading Symbol	Name of Exchange where Registered	Number of Shares Outstanding At May 1, 2022
Common Shares, $0.01 par value	RE	New York Stock Exchange	39,437,963

EVEREST RE GROUP, LTD

Table of Contents

Form 10-Q

Page

PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2022 (unaudited)
	and December 31, 2021	1
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the
	three months ended March 31, 2022 and 2021 (unaudited)	2
	Consolidated Statements of Changes in Shareholders’ Equity for the three
	months ended March 31, 2022 and 2021 (unaudited)	3
	Consolidated Statements of Cash Flows for the three months ended
	March 31, 2022 and 2021 (unaudited)	4
	Notes to Consolidated Interim Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operation	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II

OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
(Dollars and share amounts in thousands, except par value per share)	2022			2021
	(unaudited)
ASSETS:
Fixed maturities - available for sale	$	21,998,415		$	22,308,272
(amortized cost: 2022, $22,693,029; 2021, $22,063,592, credit allowances: 2022, $(41,591); 2021, $(29,738))
Equity securities, at fair value		1,780,526			1,825,908
Short-term investments (cost: 2022, $823,889; 2021, $1,178,386)		823,875			1,178,337
Other invested assets		2,917,039			2,919,965
Cash		1,778,218			1,440,861
Total investments and cash		29,298,073			29,673,343
Accrued investment income		156,997			149,105
Premiums receivable		3,264,023			3,293,598
Reinsurance recoverables		2,101,641			2,053,354
Funds held by reinsureds		920,054			868,601
Deferred acquisition costs		842,739			872,289
Prepaid reinsurance premiums		496,632			515,445
Income taxes		117,609			2,381
Other assets		789,014			757,167
TOTAL ASSETS	$	37,986,782		$	38,185,283
LIABILITIES:
Reserve for losses and loss adjustment expenses	$	19,495,637		$	19,009,486
Future policy benefit reserve		34,523			35,669
Unearned premium reserve		4,571,705			4,609,634
Funds held under reinsurance treaties		4,732			18,391
Other net payable to reinsurers		464,000			449,723
Losses in course of payment		133,888			260,684
Senior notes		2,346,147			2,345,800
Long term notes		223,799			223,774
Borrowings from FHLB		519,000			519,000
Accrued interest on debt and borrowings		38,843			17,348
Unsettled securities payable		67,698			16,698
Other liabilities		559,181			539,896
Total liabilities		28,459,153			28,046,103
Commitments and contingencies (Note 7)		(nil)			(nil)
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50,000 shares authorized;
no shares issued and outstanding		-			-
Common shares, par value: $0.01; 200,000 shares authorized; (2022) 69,977
and (2021) 69,790 outstanding before treasury shares		700			698
Additional paid-in capital		2,271,890			2,274,431
Accumulated other comprehensive income (loss), net of deferred income
tax expense (benefit) of $(89,926) at 2022 and $26,781 at 2021		(832,820)			11,523
Treasury shares, at cost; 30,529 shares (2022) and 30,524 shares (2021)		(3,848,630)			(3,847,308)
Retained earnings		11,936,489			11,699,836
Total shareholders' equity		9,527,629			10,139,180
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	37,986,782		$	38,185,283
The accompanying notes are an integral part of the consolidated financial statements.

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended
	March 31,
(Dollars in thousands, except per share amounts)	2022			2021
	(unaudited)
REVENUES:
Premiums earned	$	2,791,765		$	2,387,865
Net investment income		242,830			260,413
Net gains (losses) on investments:
Credit allowances on fixed maturity securities		(11,853)			(6,977)
Gains (losses) from fair value adjustments		(136,860)			29,056
Net realized gains (losses) from dispositions		(4,914)			16,823
Total net gains (losses) on investments		(153,627)			38,902
Other income (expense)		15,363			56,593
Total revenues		2,896,331			2,743,773
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		1,789,863			1,711,419
Commission, brokerage, taxes and fees		605,230			489,011
Other underwriting expenses		161,293			142,231
Corporate expenses		14,020			12,378
Interest, fees and bond issue cost amortization expense		24,078			15,639
Total claims and expenses		2,594,484			2,370,678
INCOME (LOSS) BEFORE TAXES		301,847			373,095
Income tax expense (benefit)		4,096			31,233
NET INCOME (LOSS)	$	297,751		$	341,862
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		(815,177)			(288,615)
Reclassification adjustment for realized losses (gains) included in net income (loss)		4,178			(3,666)
Total URA(D) on securities arising during the period		(810,999)			(292,281)
Foreign currency translation adjustments		(34,102)			(9,582)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		758			2,043
Total benefit plan net gain (loss) for the period		758			2,043
Total other comprehensive income (loss), net of tax		(844,343)			(299,820)
COMPREHENSIVE INCOME (LOSS)	$	(546,592)		$	42,042
EARNINGS PER COMMON SHARE:
Basic	$	7.57		$	8.53
Diluted		7.56			8.52
The accompanying notes are an integral part of the consolidated financial statements.

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in thousands, except share and dividends per share amounts)	2022			2021
	(unaudited)
COMMON SHARES (shares outstanding):
Balance, January 1		39,266,633			39,983,481
Issued during the period, net		187,044			196,481
Treasury shares acquired		(5,000)			(97,462)
Balance, March 31		39,448,677			40,082,500
COMMON SHARES (par value):
Balance, January 1	$	698		$	696
Issued during the period, net		2			2
Balance, March 31		700			698
ADDITIONAL PAID-IN CAPITAL:
Balance, January 1		2,274,431			2,245,301
Share-based compensation plans		(2,541)			436
Balance, March 31		2,271,890			2,245,737
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, January 1		11,523			534,899
Net increase (decrease) during the period		(844,343)			(299,820)
Balance, March 31		(832,820)			235,079
RETAINED EARNINGS:
Balance, January 1		11,699,836			10,567,452
Net income (loss)		297,751			341,862
Dividends declared ($1.55 per share 2022 and $1.55 per share 2021)		(61,097)			(62,228)
Balance, March 31		11,936,489			10,847,085
TREASURY SHARES AT COST:
Balance, January 1		(3,847,308)			(3,622,172)
Purchase of treasury shares		(1,322)			(23,545)
Balance, March 31		(3,848,630)			(3,645,717)
TOTAL SHAREHOLDERS' EQUITY, March 31	$	9,527,629		$	9,682,882
The accompanying notes are an integral part of the consolidated financial statements.

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	297,751		$	341,862
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		(14,203)			(105,460)
Decrease (increase) in funds held by reinsureds, net		(67,033)			(25,584)
Decrease (increase) in reinsurance recoverables		(125,881)			(14,518)
Decrease (increase) in income taxes		1,251			24,908
Decrease (increase) in prepaid reinsurance premiums		(7,167)			(27,071)
Increase (decrease) in reserve for losses and loss adjustment expenses		632,398			655,070
Increase (decrease) in future policy benefit reserve		(1,146)			(162)
Increase (decrease) in unearned premiums		4,045			196,631
Increase (decrease) in other net payable to reinsurers		46,310			105,390
Increase (decrease) in losses in course of payment		(125,074)			11,980
Change in equity adjustments in limited partnerships		(97,831)			(116,767)
Distribution of limited partnership income		71,174			18,125
Change in other assets and liabilities, net		47,052			(149,480)
Non-cash compensation expense		11,912			11,021
Amortization of bond premium (accrual of bond discount)		19,254			17,323
Net (gains) losses on investments		153,627			(38,902)
Net cash provided by (used in) operating activities		846,439			904,366
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale		849,019			818,352
Proceeds from fixed maturities sold - available for sale		418,988			228,278
Proceeds from equity securities sold, at fair value		90,101			281,313
Distributions from other invested assets		162,719			52,211
Cost of fixed maturities acquired - available for sale		(2,010,859)			(1,776,730)
Cost of equity securities acquired, at fair value		(195,026)			(174,981)
Cost of other invested assets acquired		(137,430)			(98,939)
Net change in short-term investments		354,761			308,585
Net change in unsettled securities transactions		46,399			(93,610)
Net cash provided by (used in) investing activities		(421,328)			(455,521)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period for share-based compensation, net of expense		(14,450)			(10,583)
Purchase of treasury shares		(1,322)			(23,545)
Dividends paid to shareholders		(61,097)			(62,229)
Cost of shares withheld on settlements of share-based compensation awards		(16,692)			(12,507)
Net cash provided by (used in) financing activities		(93,561)			(108,864)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		5,807			(8,972)
Net increase (decrease) in cash		337,357			331,009
Cash, beginning of period		1,440,861			801,651
Cash, end of period	$	1,778,218		$	1,132,660
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	2,681		$	6,417
Interest paid		2,210			1,880
The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2022 and 2021

1. GENERAL

Everest Re Group, Ltd. (“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets. As used in this document, “Company” means Group and its subsidiaries.

2. BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, 2021 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results for the three months ended March 31, 2022 and 2021 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2021, 2020 and 2019, included in the Company’s most recent Form 10-K filing.

The Company consolidates the results of operations and financial position of all voting interest entities ("VOE") in which the Company has a controlling financial interest and all variable interest entities ("VIE") in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior years’ amounts to conform to the 2022 presentation.

Application of Recently Issued Accounting Standard Changes.

The Company did not adopt any new accounting standards that had a material impact during the three months ended March 31, 2022. The Company assessed the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on the Company’s consolidated financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There were no new material accounting standards issued in the three months ended March 31, 2022, that impacted Group.

Any issued guidance and pronouncements, other than those directly referenced above, are deemed by the Company to be either not applicable or immaterial to its financial statements.

3. INVESTMENTS

The following tables show amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and market value of fixed maturity securities as of the dates indicated:

		At March 31, 2022
		Amortized			Allowance for			Unrealized			Unrealized			Market
(Dollars in thousands)		Cost			Credit Losses			Appreciation			Depreciation			Value
Fixed maturity securities
	U.S. Treasury securities and obligations of
	U.S. government agencies and corporations	$	1,387,723		$	-		$	9,506		$	(41,423)		$	1,355,806
	Obligations of U.S. states and political subdivisions		560,375			(151)			9,538			(10,574)			559,188
	Corporate securities		7,510,255			(20,049)			64,802			(263,958)			7,291,050
	Asset-backed securities		4,046,636			(7,679)			13,228			(54,294)			3,997,891
	Mortgage-backed securities
	Commercial		1,021,013			-			2,762			(31,904)			991,871
	Agency residential		2,387,754			-			5,354			(109,611)			2,283,497
	Non-agency residential		5,759			-			-			(114)			5,645
	Foreign government securities		1,414,589			-			16,763			(68,970)			1,362,382
	Foreign corporate securities		4,358,925			(13,712)			31,776			(225,904)			4,151,085
Total fixed maturity securities		$	22,693,029		$	(41,591)		$	153,729		$	(806,752)		$	21,998,415

		At December 31, 2021
		Amortized			Allowance for			Unrealized			Unrealized			Market
(Dollars in thousands)		Cost			Credit Losses			Appreciation			Depreciation			Value
Fixed maturity securities
	U.S. Treasury securities and obligations of
	U.S. government agencies and corporations	$	1,407,256		$	-		$	23,720		$	(10,358)		$	1,420,618
	Obligations of U.S. states and political subdivisions		558,842			(151)			29,080			(1,150)			586,621
	Corporate securities		7,443,535			(19,267)			195,210			(62,580)			7,556,898
	Asset-backed securities		3,579,439			(7,679)			21,817			(11,848)			3,581,729
	Mortgage-backed securities
	Commercial		1,032,506			-			37,550			(5,690)			1,064,366
	Agency residential		2,361,208			-			32,997			(18,873)			2,375,332
	Non-agency residential		6,530			-			22			(16)			6,536
	Foreign government securities		1,423,634			-			41,957			(28,079)			1,437,512
	Foreign corporate securities		4,250,642			(2,641)			95,195			(64,536)			4,278,660
Total fixed maturity securities		$	22,063,592		$	(29,738)		$	477,548		$	(203,130)		$	22,308,272

The amortized cost and market value of fixed maturity securities are shown in the following table by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

	At March 31, 2022						At December 31, 2021
	Amortized			Market			Amortized			Market
(Dollars in thousands)	Cost			Value			Cost			Value
Fixed maturity securities – available for sale:
Due in one year or less	$	1,391,977		$	1,391,679		$	1,398,742		$	1,398,006
Due after one year through five years		7,302,421			7,112,007			7,075,077			7,154,468
Due after five years through ten years		4,896,715			4,673,737			5,003,792			5,100,672
Due after ten years		1,640,754			1,542,088			1,606,298			1,627,163
Asset-backed securities		4,046,636			3,997,891			3,579,439			3,581,729
Mortgage-backed securities:
Commercial		1,021,013			991,871			1,032,506			1,064,366
Agency residential		2,387,754			2,283,497			2,361,208			2,375,332
Non-agency residential		5,759			5,645			6,530			6,536
Total fixed maturity securities	$	22,693,029		$	21,998,415		$	22,063,592		$	22,308,272

The changes in net unrealized appreciation (depreciation) for the Company’s investments are derived from the following sources for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities and short-term investments	$	(927,407)		$	(322,708)
Change in unrealized appreciation (depreciation), pre-tax		(927,407)			(322,708)
Deferred tax benefit (expense)		116,408			40,427
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in shareholders’ equity	$	(810,999)		$	(292,281)

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated.

		Duration of Unrealized Loss at March 31, 2022 By Security Type
	Less than 12 months						Greater than 12 months						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
(Dollars in thousands)	Market Value			Depreciation			Market Value			Depreciation			Market Value			Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	735,568		$	(31,508)		$	140,967		$	(9,915)		$	876,535		$	(41,423)
Obligations of U.S. states and political subdivisions		135,080			(8,844)			12,751			(1,683)			147,831			(10,527)
Corporate securities		3,552,799			(191,372)			804,526			(71,842)			4,357,325			(263,214)
Asset-backed securities		3,072,751			(51,294)			41,984			(3,000)			3,114,735			(54,294)
Mortgage-backed securities
Commercial		696,096			(29,358)			19,307			(2,546)			715,403			(31,904)
Agency residential		1,405,047			(67,884)			511,034			(41,727)			1,916,081			(109,611)
Non-agency residential		4,831			(102)			815			(12)			5,646			(114)
Foreign government securities		868,416			(37,826)			173,278			(31,144)			1,041,694			(68,970)
Foreign corporate securities		2,674,129			(177,921)			444,844			(47,682)			3,118,973			(225,603)
Total	$	13,144,717		$	(596,109)		$	2,149,506		$	(209,551)		$	15,294,223		$	(805,660)
Securities where an allowance for credit loss was recorded		18,830			(1,092)			-			-			18,830			(1,092)
Total fixed maturity securities	$	13,163,547		$	(597,201)		$	2,149,506		$	(209,551)		$	15,313,053		$	(806,752)

		Duration of Unrealized Loss at March 31, 2022 By Maturity
	Less than 12 months						Greater than 12 months						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
(Dollars in thousands)	Market Value			Depreciation			Market Value			Depreciation			Market Value			Depreciation
Fixed maturity securities
Due in one year or less	$	170,052		$	(2,305)		$	105,909		$	(9,957)		$	275,961		$	(12,262)
Due in one year through five years		3,852,436			(164,170)			755,276			(55,787)			4,607,712			(219,957)
Due in five years through ten years		2,843,780			(178,654)			628,985			(82,375)			3,472,765			(261,029)
Due after ten years		1,099,724			(102,342)			86,196			(14,147)			1,185,920			(116,489)
Asset-backed securities		3,072,751			(51,294)			41,984			(3,000)			3,114,735			(54,294)
Mortgage-backed securities		2,105,974			(97,344)			531,156			(44,285)			2,637,130			(141,629)
Total	$	13,144,717		$	(596,109)		$	2,149,506		$	(209,551)		$	15,294,223		$	(805,660)
Securities where an allowance for credit loss was recorded		18,830			(1,092)			-			-			18,830			(1,092)
Total fixed maturity securities	$	13,163,547		$	(597,201)		$	2,149,506		$	(209,551)		$	15,313,053		$	(806,752)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at March 31, 2022 were $15.3 billion and $806.8 million, respectively. The market value of securities for the single issuer (the United States government) whose securities comprised the largest unrealized loss position at March 31, 2022, did not exceed 4.0% of the overall market value of the Company’s fixed maturity securities. The market value of the securities for the issuer with the second largest unrealized loss position at March 31, 2022, comprised less than 0.9% of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $597.2 million of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, agency residential mortgage-backed securities, asset-backed securities and foreign government securities. Of these unrealized losses, $551.4 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $209.6 million of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, agency residential mortgage-backed securities and foreign government securities. Of these unrealized losses, $201.8 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments. Based upon the Company’s current evaluation of securities in an unrealized loss position as of March 31, 2022, the unrealized losses are due to changes in interest rates and non-issuer specific credit spreads and are not credit-related. In addition, the contractual terms of these securities do not permit these securities to be settled at a price less than their amortized cost.

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated. The amounts presented in the tables below include $15.7 million of market value and $(0.4) million of gross unrealized depreciation as of December 31, 2021 related to fixed maturity securities for which the Company has recorded an allowance for credit losses.

		Duration of Unrealized Loss at December 31, 2021 By Security Type
	Less than 12 months						Greater than 12 months						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
(Dollars in thousands)	Market Value			Depreciation			Market Value			Depreciation			Market Value			Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	504,168		$	(6,264)		$	91,735		$	(4,094)		$	595,903		$	(10,358)
Obligations of U.S. states and political subdivisions		51,094			(1,038)			2,558			(112)			53,652			(1,150)
Corporate securities		2,132,576			(38,316)			472,831			(24,264)			2,605,407			(62,580)
Asset-backed securities		1,954,079			(11,180)			41,823			(668)			1,995,902			(11,848)
Mortgage-backed securities
Commercial		221,852			(2,854)			40,496			(2,836)			262,348			(5,690)
Agency residential		1,101,215			(12,178)			279,697			(6,695)			1,380,912			(18,873)
Non-agency residential		2,320			(14)			156			(2)			2,476			(16)
Foreign government securities		392,447			(9,709)			100,673			(18,370)			493,120			(28,079)
Foreign corporate securities		1,734,510			(46,247)			210,722			(18,289)			1,945,232			(64,536)
Total fixed maturity securities	$	8,094,261		$	(127,800)		$	1,240,691		$	(75,330)		$	9,334,952		$	(203,130)

		Duration of Unrealized Loss at December 31, 2021 By Maturity
	Less than 12 months						Greater than 12 months						Total
				Gross						Gross						Gross
				Unrealized						Unrealized						Unrealized
(Dollars in thousands)	Market Value			Depreciation			Market Value			Depreciation			Market Value			Depreciation
Fixed maturity securities
Due in one year or less	$	129,860		$	(2,415)		$	136,827		$	(11,832)		$	266,687		$	(14,247)
Due in one year through five years		2,165,467			(35,264)			446,247			(28,685)			2,611,714			(63,949)
Due in five years through ten years		1,727,823			(47,413)			244,454			(22,038)			1,972,277			(69,451)
Due after ten years		791,645			(16,482)			50,991			(2,574)			842,636			(19,056)
Asset-backed securities		1,954,079			(11,180)			41,823			(668)			1,995,902			(11,848)
Mortgage-backed securities		1,325,387			(15,046)			320,349			(9,533)			1,645,736			(24,579)
Total fixed maturity securities	$	8,094,261		$	(127,800)		$	1,240,691		$	(75,330)		$	9,334,952		$	(203,130)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2021 were $9.3 billion and $203.1 million, respectively. The market value of securities for the single issuer (the United States government) whose securities comprised the largest unrealized loss position at December 31, 2021, did not exceed 2.7% of the overall market value of the Company’s fixed maturity securities. The market value of the securities for the issuer with the second largest unrealized loss comprised less than 0.5% of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $127.8 million of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, agency residential mortgage-backed securities, asset-backed securities and foreign government securities. Of these unrealized losses, $116.2 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $75.3 million of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, foreign government securities and agency residential mortgage-backed securities. Of these unrealized losses, $72.3 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The components of net investment income are presented in the table below for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Fixed maturities	$	148,226		$	140,916
Equity securities		4,146			4,838
Short-term investments and cash		159			180
Other invested assets:
Limited partnerships		88,437			114,333
Other		11,831			6,019
Gross investment income before adjustments		252,799			266,286
Funds held interest income (expense)		3,685			7,966
Future policy benefit reserve income (expense)		(222)			(291)
Gross investment income		256,262			273,961
Investment expenses		(13,432)			(13,548)
Net investment income	$	242,830		$	260,413

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. The net investment income from limited partnerships is dependent upon the Company’s share of the net asset values of interests underlying each limited partnership. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant

decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional $2.5 billion in limited partnerships and private placement loan securities at March 31, 2022. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2026.

The Company participates in a private placement liquidity sweep facility (“the facility”). The primary purpose of the facility is to enhance the Company’s return on its short-term investments and cash positions. The facility invests in high quality, short-duration securities and permits daily liquidity. The Company consolidates its participation in the facility. As of March 31, 2022, the market value of investments in the facility consolidated within the Company’s balance sheets was $773.3 million.

Variable Interest Entities

The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs primarily as an investor through normal investment activities but also as an investment manager. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements. As of March 31, 2022 and December 31, 2021, the Company did not hold any securities for which it is the primary beneficiary.

The Company, through normal investment activities, makes passive investments in general and limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of March 31, 2022 and December 31, 2021 is limited to the total carrying value of $2.9 billion and $2.9 billion, respectively, which are included in general and limited partnerships and other alternative investments in Other Invested Assets in the Company's Consolidated Balance Sheets. As of March 31, 2022, the Company has outstanding commitments totaling $2.2 billion whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in asset-backed securities, which includes collateralized loan obligations and are reported in fixed maturities, available-for-sale. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

The components of net gains (losses) on investments are presented in the tables below for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022				2021
Fixed maturity securities, market value:
Allowance for credit losses	$	(11,853)		$	(6,977)
Net realized gains (losses) from dispositions		2,799			9,174
Equity securities, fair value:
Net realized gains (losses) from dispositions		(11,787)			6,238
Gains (losses) from fair value adjustments		(136,860)			29,056
Other invested assets		4,152			1,346
Short-term investments gain (loss)		(78)			66
Total net gains (losses) on investments	$	(153,627)		$	38,902
(Some amounts may not reconcile due to rounding.)

		Roll Forward of Allowance for Credit Losses
		Three Months Ended March 31, 2022
								Obligations of
								U.S. States			Foreign
		Corporate			Asset-Backed			and Political			Corporate
		Securities			Securities			Subdivisions			Securities			Total
(Dollars in thousands)
Beginning Balance		$	(19,267)		$	(7,679)		$	(151)		$	(2,641)		$	(29,738)
Credit losses on securities where credit
losses were not previously recorded			(1,929)			-			-			(11,184)			(13,113)
Increases in allowance on previously
impaired securities			-			-			-			-			-
Decreases in allowance on previously
impaired securities			-			-			-			-			-
Reduction in allowance due to disposals			1,147			-			-			113			1,260
Balance as of March 31, 2022		$	(20,049)		$	(7,679)		$	(151)		$	(13,712)		$	(41,591)

	Roll Forward of Allowance for Credit Losses
	Three Months Ended March 31, 2021
							Foreign			Foreign
	Corporate			Asset-Backed			Government			Corporate
	Securities			Securities			Securities			Securities			Total
(Dollars in thousands)
Beginning Balance	$	(1,220)		$	-		$	(22)		$	(503)		$	(1,745)
Credit losses on securities where credit
losses were not previously recorded		(2,383)			(4,915)			-			-			(7,298)
Increases in allowance on previously
impaired securities		-			-			-			-			-
Decreases in allowance on previously
impaired securities		-			-			-			-			-
Reduction in allowance due to disposals		-			-			22			298			320
Balance as of March 31, 2021	$	(3,603)		$	(4,915)		$	-		$	(205)		$	(8,723)

The proceeds and split between gross gains and losses from dispositions of fixed maturity and equity securities, are presented in the table below for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Proceeds from sales of fixed maturity securities	$	418,988		$	228,278
Gross gains from dispositions		20,122			14,864
Gross losses from dispositions		(17,324)			(5,690)
Proceeds from sales of equity securities	$	90,101		$	281,313
Gross gains from dispositions		3,508			12,304
Gross losses from dispositions		(15,294)			(6,066)

4. RESERVE FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

Activity in the reserve for losses and LAE is summarized for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Gross reserves beginning of period	$	19,009,486		$	16,322,143
Less reinsurance recoverables on unpaid losses		(1,946,365)			(1,843,691)
Net reserves beginning of period		17,063,121			14,478,452
Incurred related to:
Current year		1,790,798			1,713,253
Prior years		(935)			(1,834)
Total incurred losses and LAE		1,789,863			1,711,419
Paid related to:
Current year		307,661			215,302
Prior years		918,834			837,035
Total paid losses and LAE		1,226,495			1,052,337
Foreign exchange/translation adjustment		(121,934)			(5,841)
Net reserves end of period		17,504,555			15,131,694
Plus reinsurance recoverables on unpaid losses		1,991,082			1,882,112
Gross reserves end of period	$	19,495,637		$	17,013,806
(Some amounts may not reconcile due to rounding.)

Current year incurred losses were $1.8 billion and $1.7 billion for the three months ended March 31, 2022 and 2021, respectively. Gross and net reserves increased for the three months ended March 31, 2022, reflecting an increase in underlying exposure due to premium growth, partially offset by a reduction of $155.0 million in current year catastrophe losses.

5. FAIR VALUE

GAAP guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the

lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:

Level 1:Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market;

Level 2:Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument;

Level 3:Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s fixed maturity and equity securities are primarily managed by third party investment asset managers. The investment asset managers managing publicly traded securities obtain prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. They use pricing applications that vary by asset class and incorporate available market information and when fixed maturity securities do not trade on a daily basis the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers. In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. The Company also continually performs quantitative and qualitative analysis of prices, including but not limited to initial and ongoing review of pricing methodologies, review of prices obtained from pricing services and third party investment asset managers, review of pricing statistics and trends, and comparison of prices for certain securities with a secondary price source for reasonableness. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. At March 31, 2022, $2.1 billion of fixed maturities, market value were fair valued using unobservable inputs. The majority of these fixed maturities were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties. The Company has procedures in place to evaluate these independent third party valuations. At December 31, 2021, $2.1 billion of fixed maturities, market value were fair valued using unobservable inputs.

The Company internally manages a public equity portfolio which had a fair value at March 31, 2022 and December 31, 2021 of $1.4 billion and $1.3 billion, respectively. During the fourth quarter of 2021, the Company began to internally manage a portfolio of collateralized loan obligations included in asset-backed securities which had a fair value of $2.1 billion and $2.0 billion at March 31, 2022 and December 31, 2021, respectively. All prices for these securities were obtained from publicly published sources or nationally recognized pricing vendors.

Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as Level 1 since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as Level 2 due to the added input of a foreign exchange conversion rate to determine fair or market value. The Company uses foreign currency exchange rates published by nationally recognized sources.

Fixed maturity securities listed in the tables have been categorized as Level 2, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as

interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. For foreign government securities and foreign corporate securities, the fair values provided by the third party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

In addition to the valuations from investment managers, some of the fixed maturities with fair values categorized as Level 3 result when prices are not available from the nationally recognized pricing services and are derived using unobservable inputs. The Company will value the securities with unobservable inputs using comparable market information or receive fair values from investment managers. The investment managers may obtain non-binding price quotes for the securities from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third party asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

The composition and valuation inputs for the presented fixed maturities categories Level 1 and Level 2 are as follows:

• U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;

• Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

• Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

• Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;

• Foreign government securities are comprised of global non-U.S. sovereign bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;

• Foreign corporate securities are comprised of global non-U.S. corporate bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source.

The following tables present the fair value measurement levels for all assets and liabilities, which the Company has recorded at fair value (fair and market value) as of the periods indicated:

					Fair Value Measurement Using:
					Quoted Prices
					in Active			Significant
					Markets for			Other			Significant
					Identical			Observable			Unobservable
					Assets			Inputs			Inputs
(Dollars in thousands)		March 31, 2022			(Level 1)			(Level 2)			(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations		$	1,355,806		$	-		$	1,355,806		$	-
Obligations of U.S. States and political subdivisions			559,188			-			559,188			-
Corporate securities			7,291,050			-			6,576,394			714,656
Asset-backed securities			3,997,891			-			2,609,200			1,388,691
Mortgage-backed securities
Commercial			991,871			-			985,981			5,890
Agency residential			2,283,497			-			2,283,497			-
Non-agency residential			5,645			-			5,645			-
Foreign government securities			1,362,382			-			1,362,382			-
Foreign corporate securities			4,151,085			-			4,135,159			15,926
Total fixed maturities, market value			21,998,415			-			19,873,252			2,125,163
Equity securities, fair value			1,780,526			1,698,324			82,202			-

						Fair Value Measurement Using:
					Quoted Prices
					in Active			Significant
					Markets for			Other			Significant
					Identical			Observable			Unobservable
					Assets			Inputs			Inputs
(Dollars in thousands)		December 31, 2021			(Level 1)			(Level 2)			(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations		$	1,420,618		$	-		$	1,420,618		$	-
Obligations of U.S. States and political subdivisions			586,621			-			586,621			-
Corporate securities			7,556,898			-			6,756,324			800,574
Asset-backed securities			3,581,729			-			2,330,448			1,251,281
Mortgage-backed securities
Commercial			1,064,366			-			1,064,366			-
Agency residential			2,375,332			-			2,375,332			-
Non-agency residential			6,536			-			6,536			-
Foreign government securities			1,437,512			-			1,437,512			-
Foreign corporate securities			4,278,660			-			4,262,645			16,015
Total fixed maturities, market value			22,308,272			-			20,240,402			2,067,870
Equity securities, fair value			1,825,908			1,742,367			83,541			-

In addition, $299.6 million and $286.6 million of investments within other invested assets on the consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively, are not included within the fair value hierarchy tables as the assets are measured at NAV as a practical expedient to determine fair value.

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturities, for the periods indicated:

			Total Fixed Maturities, Market Value
		Three Months Ended March 31, 2022															Three Months Ended March 31, 2021
		Corporate			Asset-Backed						Foreign						Corporate			Asset-Backed			Foreign
(Dollars in thousands)		Securities			Securities			CMBS			Corporate			Total			Securities			Securities			Corporate			Total
Beginning balance fixed maturities at market value		$	800,574		$	1,251,281		$	-		$	16,015		$	2,067,870		$	701,492		$	623,033		$	5,699		$	1,330,224
Total gains or (losses) (realized/unrealized)
Included in earnings			15,943			102			-			13			16,058			(1,789)			(4,168)			3			(5,954)
Included in other comprehensive income (loss)			(4,167)			(28,788)			(23)			(61)			(33,039)			2,836			(3,135)			49			(250)
Purchases, issuances and settlements			(97,694)			166,096			5,913			(41)			74,274			2,003			169,630			(153)			171,480
Transfers in and/or (out) of Level 3			-			-			-			-			-			-			-			-			-
Ending balance		$	714,656		$	1,388,691		$	5,890		$	15,926		$	2,125,163		$	704,542		$	785,360		$	5,599		$	1,495,500
The amount of total gains or losses for the period
included in earnings (or changes in net assets)
attributable to the change in unrealized gains
or losses relating to assets still held
at the reporting date		$	318		$	-		$	-		$	-		$	318		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

6. EARNINGS PER COMMON SHARE

Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that would occur if options granted under various share-based compensation plans were exercised resulting in the issuance of common shares that would participate in the earnings of the entity.

Net income (loss) per common share has been computed as per below, based upon weighted average common basic and dilutive shares outstanding.

		Three Months Ended
		March 31,
(Dollars in thousands, except per share amounts)		2022				2021
Net income (loss) per share:
	Numerator
	Net income (loss)	$	297,751			$	341,862
	Less: dividends declared-common shares and unvested common shares		(61,097)				(62,229)
	Undistributed earnings		236,653				279,633
	Percentage allocated to common shareholders (1)		98.7	%			98.7	%
			233,504				276,031
	Add: dividends declared-common shareholders		60,282				61,415
	Numerator for basic and diluted earnings per common share	$	293,785			$	337,446
	Denominator
	Denominator for basic earnings per weighted-average common shares		38,823				39,543
	Effect of dilutive securities:
	Options		14				54
	Denominator for diluted earnings per adjusted weighted-average common shares		38,837				39,597
	Per common share net income (loss)
	Basic	$	7.57			$	8.53
	Diluted	$	7.56			$	8.52
(1)	Basic weighted-average common shares outstanding		38,823				39,543
	Basic weighted-average common shares outstanding and unvested common shares expected to vest		39,347				40,059
	Percentage allocated to common shareholders		98.7	%			98.7	%
(Some amounts may not reconcile due to rounding.)

There were no anti-diluted options outstanding for the three months ended March 31, 2022 and 2021.

All outstanding options granted under share-based compensation plans expire on September 19, 2022.

7. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

The war in the Ukraine is ongoing and an evolving event. Economic and legal sanctions have been levied against Russia, specific named individuals and entities connected to the Russian government, as well as businesses located in the Russian Federation and/or owned by Russian nationals by numerous countries, including the United States. The significant political and economic uncertainty surrounding the war and associated sanctions have impacted economic and investment markets both within Russia and around the world. To the best of our knowledge at this time, the Company has limited financial exposure related to the Russian invasion of the

Ukraine. However, given the ongoing nature of the war and the high degree of uncertainty around both exposures and coverage, a reasonable estimation of potential loss is not credible at this time.

8. OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:

	Three Months Ended March 31, 2022									Three Months Ended March 31, 2021
(Dollars in thousands)	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related	$	(932,309)		$	117,132		$	(815,177)		$	(329,166)		$	40,551		$	(288,615)
Reclassification of net realized losses (gains) included in net income (loss)		4,902			(724)			4,178			(3,542)			(124)			(3,666)
Foreign currency translation adjustments		(34,603)			501			(34,102)			(8,988)			(594)			(9,582)
Reclassification of benefit plan liability amortization included in net income (loss)		960			(202)			758			2,586			(543)			2,043
Total other comprehensive income (loss)	$	(961,050)		$	116,707		$	(844,343)		$	(339,110)		$	39,290		$	(299,820)

The following table presents details of the amounts reclassified from AOCI for the periods indicated:

		Three Months Ended
		March 31,						Affected line item within the statements of
AOCI component		2022			2021			operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities		$	4,902		$	(3,542)		Other net realized capital gains (losses)
			(724)			(124)		Income tax expense (benefit)
		$	4,178		$	(3,666)		Net income (loss)
Benefit plan net gain (loss)		$	960		$	2,586		Other underwriting expenses
			(202)			(543)		Income tax expense (benefit)
		$	758		$	2,043		Net income (loss)

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Beginning balance of URA (D) on securities	$	239,397		$	724,159
Current period change in URA (D) of investments - non-credit related		(810,999)			(292,281)
Ending balance of URA (D) on securities		(571,602)			431,878
Beginning balance of foreign currency translation adjustments		(177,481)			(115,390)
Current period change in foreign currency translation adjustments		(34,102)			(9,582)
Ending balance of foreign currency translation adjustments		(211,583)			(124,972)
Beginning balance of benefit plan net gain (loss)		(50,392)			(73,870)
Current period change in benefit plan net gain (loss)		758			2,043
Ending balance of benefit plan net gain (loss)		(49,634)			(71,827)
Ending balance of accumulated other comprehensive income (loss)	$	(832,820)		$	235,079
(Some amounts may not reconcile due to rounding.)

9. CREDIT FACILITIES

The Company has multiple active letter of credit facilities for a total commitment of up to $1.2 billion as of March 31, 2022. The Company also has additional uncommitted letter of credit facilities of up to $340.0 million which may be accessible via written request and corresponding authorization from the applicable lender. There is no guarantee the uncommitted capacity will be available to us on a future date.

The terms and outstanding amounts for each facility are discussed below:

Group Credit Facility

Effective May 26, 2016, Group, Everest Reinsurance (Bermuda), Ltd. (“Bermuda Re”) and Everest International Reinsurance, Ltd. (“Everest International”), both direct subsidiaries of Group, entered into a five year, $800.0 million senior credit facility with a syndicate of lenders, which amended and restated in its entirety the June 22, 2012, four year, $800.0 million senior credit facility. Both the May 26, 2016 and June 22, 2012 senior credit facilities, which have similar terms, are referred to as the “2016 Group Credit Facility”. Wells Fargo Corporation (“Wells Fargo Bank”) is the administrative agent for the 2016 Group Credit Facility.

Effective May 26, 2021, the term of the 2016 Group Credit Facility expired. The Company elected not to renew this facility to allow for the replacement by other collateralized letter of credit facilities such as those described below. As a result of the non-renewal in May 2021, letter of credit commitment/availability in the 2016 Group Credit Facility as of March 31, 2022 is limited only to the remaining $13.3 million of letters of credit currently in force and scheduled to expire in 2022. No additional letters of credit will be issued under the 2016 Group Credit Facility, and the facility will be dormant once the remaining letters of credit have expired. As of March 31, 2022, the Company was in compliance with all Group Credit Facility covenants.

The following table summarizes the outstanding letters of credit and/or borrowings for the periods indicated:

(Dollars in thousands)					At March 31, 2022								At December 31, 2021
Bank				Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Wells Fargo Bank Group Credit Facility				$	13,319		$	13,319		12/30/2022		$	39,198		$	39,198		12/30/2022
Total Wells Fargo Bank Group Credit Facility				$	13,319		$	13,319				$	39,198		$	39,198

Bermuda Re Wells Fargo Letter of Credit Facility

Effective February 23, 2021, Bermuda Re entered into a letter of credit issuance facility with Wells Fargo referred to as the “2021 Bermuda Re Wells Fargo Letter of Credit Facility.” The Bermuda Re Wells Fargo Letter of Credit Facility originally provided for the issuance of up to $50.0 million of secured letters of credit. Effective May 5, 2021, the agreement was amended to provide for the issuance of up to $500.0 million of secured letters of credit.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)		At March 31, 2022								At December 31, 2021
Bank		Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Wells Fargo Bank Bilateral LOC Agreement		$	500,000		$	422,521		12/30/2022		$	500,000		$	351,497		12/30/2022
Total Wells Fargo Bank Bilateral LOC Agreement		$	500,000		$	422,521				$	500,000		$	351,497

Bermuda Re Citibank Letter of Credit Facility

Effective August 9, 2021, Bermuda Re entered into a new letter of credit issuance facility with Citibank N.A. which superseded the previous letter of credit issuance facility with Citibank N.A. that was effective December 31, 2020. Both of these agreements are referred to as the “Bermuda Re Citibank Letter of Credit Facility”. The current Bermuda Re Citibank Letter of Credit Facility provides for the committed issuance of up to $230.0 million

of secured letters of credit. In addition, the facility provided for the uncommitted issuance of up the $140.0 million, which may be accessible via written request by the Company and corresponding authorization from Citibank N.A.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)		At March 31, 2022								At December 31, 2021
Bank		Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Bermuda Re Citibank LOC Facility- Committed		$	230,000		$	425		12/16/22		$	230,000		$	4,425		02/28/22
						218,377		12/31/22						925		03/01/22
						473		01/21/23						1,264		11/24/22
						4,425		02/28/23						423		12/16/22
						1,088		03/01/23						146		12/20/22
						990		08/15/23						216,622		12/31/22
						1,240		09/23/23						473		01/21/23
						147		12/20/23						985		08/15/23
						–								1,234		09/23/23
Bermuda Re Citibank LOC Facility - Uncommitted			140,000			84,203		12/31/22			140,000			84,203		12/31/22
						22,233		03/30/26						22,731		12/30/25
Total Citibank Bilateral Agreement		$	370,000		$	333,600				$	370,000		$	333,429

Bermuda Re Bayerische Landesbank Credit Facility

Effective August 27, 2021 Bermuda Re entered into a letter of credit issuance facility with Bayerische Landesbank, an agreement referred to as the “Bermuda Re Bayerische Landesbank Bilateral LOC Facility”. The Bermuda Re Bayerische Landesbank Bilateral LOC Facility provides for the committed issuance of up to $200.0 million of secured letters of credit.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)		At March 31, 2022								At December 31, 2021
Bank		Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Bayerische Landesbank Bilateral LOC Agreement		$	200,000		$	156,197		12/31/2022		$	200,000		$	154,691		12/31/2022
Total Bayerische Landesbank Bilateral LOC Agreement		$	200,000		$	156,197				$	200,000		$	154,691

Bermuda Re Lloyd’s Bank Credit Facility.

Effective October 8, 2021 Bermuda Re entered into a letter of credit issuance facility with Lloyd’s Bank Corporate Markets PLC, an agreement referred to as the “Bermuda Re Lloyd’s Bank Credit Facility”. The Bermuda Re Lloyd’s Bank Credit Facility provides for the committed issuance of up to $50.0 million of secured letters of credit, and subject to credit approval a maximum total facility amount of $250.0 million.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)		At March 31, 2022								At December 31, 2021
Bank		Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Bermuda Re Lloyd's Bank Credit Facility-Committed		$	50,000		$	46,008		12/31/2022		$	50,000		$	46,008		12/31/2022
Bermuda Re Lloyd's Bank Credit Facility-Uncommitted			200,000			84,806		12/31/2022			-			-
Total Bermuda Re Lloyd's Bank Credit Facility		$	250,000		$	130,814				$	50,000		$	46,008

Bermuda Re Barclays Bank Credit Facility.

Effective November 3, 2021 Bermuda Re entered into a letter of credit issuance facility with Barclays Bank PLC, an agreement referred to as the “Bermuda Re Barclays Credit Facility”. The Bermuda Re Barclays Credit Facility provides for the committed issuance of up to $200.0 million of secured letters of credit.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)		At March 31, 2022								At December 31, 2021
Bank		Commitment			In Use			Date of Expiry		Commitment			In Use			Date of Expiry
Bermuda Re Barclays Bilateral Letter of Credit Facility		$	200,000		$	171,628		12/31/2022		$	200,000		$	186,299		12/31/2022
Total Bermuda Re Barclays Bilateral Letter of Credit Facility		$	200,000		$	171,628				$	200,000		$	186,299

Federal Home Loan Bank Membership

Everest Reinsurance Company (“Everest Re”) is a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10% of its statutory admitted assets. As of March 31, 2022, Everest Re had admitted assets of approximately $20.4 billion which provides borrowing capacity of up to approximately $2.0 billion. As of March 31, 2022, Everest Re has $519.0 million of borrowings outstanding, with maturities in November and December, 2022, and interest payable at interest rates between 0.53% and 0.65%. Everest Re incurred interest expense of $0.7 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. The FHLBNY membership agreement requires that 4.5% of borrowed funds be used to acquire additional membership stock.

10. COLLATERALIZED REINSURANCE AND TRUST AGREEMENTS

Certain subsidiaries of Group have established trust agreements, which effectively use the Company’s investments as collateral, as security for assumed losses payable to certain non-affiliated ceding companies. At March 31, 2022, the total amount on deposit in trust accounts was $1.8 billion.

The Company reinsures some of its catastrophe exposures with the segregated accounts of Mt. Logan Re. Mt. Logan Re is a Collateralized insurer registered in Bermuda and 100% of the voting common shares are owned by Group. Each segregated account invests predominantly in a diversified set of catastrophe exposures, diversified by risk/peril and across different geographic regions globally.

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan Re segregated accounts.

			Three Months Ended
			March 31,
Mt. Logan Re Segregated Accounts			2022			2021
(Dollars in thousands)
Ceded written premiums		$	50,239		$	99,110
Ceded earned premiums			50,443			78,107
Ceded losses and LAE			40,620			80,843
Assumed written premiums			793			2,476
Assumed earned premiums			793			2,476
Assumed losses and LAE			-			-

Effective April 1, 2018, the Company entered into a retroactive reinsurance transaction with one of the Mt. Logan Re segregated accounts to retrocede $269.2 million of casualty reserves held by Bermuda Re related to accident years 2002 through 2015. As consideration for entering the agreement, the Company transferred cash of $252.0 million to the Mt. Logan Re segregated account. The maximum liability to be retroceded under the agreement will be $319.0 million. The Company will retain liability for any amounts exceeding the maximum liability. As of March 31, 2022 and December 31, 2021, the Company has a reinsurance recoverable of $192.5 million and $206.1 million, respectively. In addition, the Company has a deferred gain liability of $14.4 million and $15.5 million as of March 31, 2022 and December 31, 2021, respectively, reported in other liabilities.

The Company entered into various collateralized reinsurance agreements with Kilimanjaro Re Limited (“Kilimanjaro”), a Bermuda based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The table below summarizes the various agreements.

(Dollars in thousands)
Class		Description		Effective Date		Expiration Date		Limit			Coverage Basis
Series 2017-1 Class A-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/13/2017		4/13/2022			50,000		Aggregate
Series 2017-1 Class B-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/13/2017		4/13/2022			75,000		Aggregate
Series 2017-1 Class C-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/13/2017		4/13/2022			175,000		Aggregate
Series 2018-1 Class A-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/30/2018		5/6/2022			62,500		Aggregate
Series 2018-1 Class B-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/30/2018		5/6/2022			200,000		Aggregate
Series 2018-1 Class A-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/30/2018		5/5/2023			62,500		Aggregate
Series 2018-1 Class B-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/30/2018		5/5/2023			200,000		Aggregate
Series 2019-1 Class A-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		12/12/2019		12/19/2023			150,000		Occurrence
Series 2019-1 Class B-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		12/12/2019		12/19/2023			275,000		Aggregate
Series 2019-1 Class A-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		12/12/2019		12/19/2024			150,000		Occurrence
Series 2019-1 Class B-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		12/12/2019		12/19/2024			275,000		Aggregate
Series 2021-1 Class A-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/21/2025			150,000		Occurrence
Series 2021-1 Class B-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/21/2025			85,000		Aggregate
Series 2021-1 Class C-1		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/21/2025			85,000		Aggregate
Series 2021-1 Class A-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/20/2026			150,000		Occurrence
Series 2021-1 Class B-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/20/2026			90,000		Aggregate
Series 2021-1 Class C-2		US, Canada, Puerto Rico – Named Storm and Earthquake Events		4/8/2021		4/20/2026			90,000		Aggregate
		Total available limit as of March 31, 2022						$	2,325,000

Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry level insured losses from covered events, as well as the geographic location of the events. The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses. Currently, none of the published insured loss estimates for catastrophe events during the applicable covered periods of the various agreements have exceeded the single event retentions or aggregate retentions under the terms of the agreements that would result in a recovery.

Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors. The proceeds from the issuance of the Notes listed below are held in reinsurance trusts throughout the duration of the applicable reinsurance agreements and invested solely in U.S. government money market funds with a rating of at least “AAAm” by Standard & Poor’s.

(Dollars in thousands)
Note Series		Issue Date		Maturity Date		Amount
Series 2017-1 Class A-2		4/13/2017		4/13/2022		$	50,000
Series 2017-1 Class B-2		4/13/2017		4/13/2022			75,000
Series 2017-1 Class C-2		4/13/2017		4/13/2022			175,000
Series 2018-1 Class A-1		4/30/2018		5/6/2022			62,500
Series 2018-1 Class B-1		4/30/2018		5/6/2022			200,000
Series 2018-1 Class A-2		4/30/2018		5/5/2023			62,500
Series 2018-1 Class B-2		4/30/2018		5/5/2023			200,000
Series 2019-1 Class A-1		12/12/2019		12/19/2023			150,000
Series 2019-1 Class B-1		12/12/2019		12/19/2023			275,000
Series 2019-1 Class A-2		12/12/2019		12/19/2024			150,000
Series 2019-1 Class B-2		12/12/2019		12/19/2024			275,000
Series 2021-1 Class A-1		4/8/2021		4/21/2025			150,000
Series 2021-1 Class B-1		4/8/2021		4/21/2025			85,000
Series 2021-1 Class C-1		4/8/2021		4/21/2025			85,000
Series 2021-1 Class A-2		4/8/2021		4/20/2026			150,000
Series 2021-1 Class B-2		4/8/2021		4/20/2026			90,000
Series 2021-1 Class C-2		4/8/2021		4/20/2026			90,000
						$	2,325,000

11. SENIOR NOTES

The table below displays Everest Reinsurance Holdings’ (“Holdings”) outstanding senior notes. Market value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

								March 31, 2022						December 31, 2021
								Consolidated Balance						Consolidated Balance
(Dollars in thousands)	Date Issued		Date Due		Principal Amounts			Sheet Amount			Market Value			Sheet Amount			Market Value
4.868% Senior notes	6/5/2014		6/1/2044		$	400,000		$	397,343		$	437,148		$	397,314		$	503,840
3.5% Senior notes	10/7/2020		10/15/2050			1,000,000			980,178			895,420			980,046			1,054,520
3.125% Senior notes	10/4/2021		10/15/2052			1,000,000			968,626			832,780			968,440			983,140
					$	2,400,000		$	2,346,147		$	2,165,348		$	2,345,800		$	2,541,500

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:

	Three Months Ended
	March 31,
(Dollars In thousands	2022			2021
Interest expense incurred 4.868% Senior notes	$	4,868		$	4,868
Interest expense incurred 3.5% Senior notes		8,807			8,805
Interest expense incurred 3.125% Senior notes		7,913			-
	$	21,588		$	13,673

12. LONG TERM SUBORDINATED NOTES

The table below displays Holdings’ outstanding fixed to floating rate long term subordinated notes. Market value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

						Maturity Date				March 31, 2022						December 31, 2021
			Original							Consolidated Balance			Market			Consolidated Balance			Market
(Dollars in thousands)	Date Issued		Principal Amount			Scheduled		Final		Sheet Amount			Value			Sheet Amount			Value
Long term subordinated notes	4/26/2007		$	400,000		5/15/2037		5/1/2067		$	223,799		$	208,685		$	223,774		$	216,289

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest was at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007. During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including May 15, 2017. The reset quarterly interest rate for February 16, 2022 to May 15, 2022 is 2.89%.

Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes. The Company’s 4.868% senior notes, due on June 1, 2044, are the Company’s long term indebtedness that ranks senior to the long term subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes. Upon expiration of the tender offer, the Company had reduced its outstanding debt by $161.4 million. In addition, during 2020, the Company repurchased and retired $13.2 million of the notes.

Interest expense incurred in connection with these long term subordinated notes is as follows for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Interest expense incurred	$	1,530		$	1,462

13. SEGMENT REPORTING

The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S., Bermuda, and Ireland offices, as well as, through branches in Canada, Singapore, the United Kingdom and Switzerland. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the U.S., Bermuda, Canada, Europe and South America through its offices in the U.S., Canada, Chile, United Kingdom, Ireland and a branch in the Netherlands.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and loss adjustment expenses (“LAE”) incurred, commission and brokerage expenses and other underwriting expenses. The Company measures its underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments. Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

The following tables present the underwriting results for the operating segments for the periods indicated:

Reinsurance	Three Months Ended March 31, 2022									Three Months Ended March 31, 2021
(Dollars in thousands)	Reinsurance			Insurance			Total			Reinsurance			Insurance			Total
Gross written premiums	$	2,185,612		$	1,000,739		$	3,186,351		$	2,059,015		$	872,418		$	2,931,433
Net written premiums		2,081,449			730,564			2,812,013			1,912,950			640,987			2,553,937
Premiums earned	$	2,066,254		$	725,511		$	2,791,765		$	1,777,452		$	610,413		$	2,387,865
Incurred losses and LAE		1,324,716			465,147			1,789,863			1,271,906			439,513			1,711,419
Commission and brokerage		514,243			90,987			605,230			408,724			80,287			489,011
Other underwriting expenses		50,453			110,840			161,293			51,996			90,235			142,231
Underwriting gain (loss)	$	176,842		$	58,537		$	235,379		$	44,826		$	378		$	45,204
Net investment income								242,830									260,413
Net gains (losses) on investments								(153,627)									38,902
Corporate expenses								(14,020)									(12,378)
Interest, fee and bond issue cost amortization expense								(24,078)									(15,639)
Other income (expense)								15,363									56,593
Income (loss) before taxes							$	301,847								$	373,095

The Company produces business in the U.S., Bermuda and internationally. The net income deriving from and assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records. Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
United Kingdom gross written premium	$	311,581		$	366,148

No other country represented more than 5% of the Company’s revenues.

14. SHARE-BASED COMPENSATION PLANS

For the three months ended March 31, 2022, a total of 196,808 restricted stock awards were granted: 187,760 and 9,048 restricted share awards were granted on February 23, 2022 and February 24, 2022, with a fair value of $301.535 per share and $287.9425 per share, respectively. Additionally, 18,340 performance share unit awards were granted on February 23, 2022, with a fair value of $301.535 per unit.

15. INCOME TAXES

The Company is domiciled in Bermuda and has significant subsidiaries and/or branches in Canada, Ireland, the Netherlands, Singapore, Switzerland, the United Kingdom, and the United States. The Company’s Bermuda domiciled subsidiaries are exempt from income taxation under Bermuda law until 2035. The Company’s

non-Bermudian subsidiaries and branches are subject to income taxation at varying rates in their respective domiciles.

The Company generally applies the estimated Annualized Effective Tax Rate (“AETR”) approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting. Under the AETR approach, the estimated annualized effective tax rate is applied to the interim year-to-date pre-tax income/(loss) to determine the income tax expense or benefit for the year-to-date period. The tax expense or benefit for the quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual pre-tax income/(loss) and annualized effective tax rate.

16. SUBSEQUENT EVENTS

The Company has evaluated known recognized and non-recognized subsequent events. The Company does not have any subsequent events to report.