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

•	liability for policy benefits for life contracts;

•	reinsurance balances recoverable;

•	gross and net premiums written and net premiums earned;

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

•	fair value measurements of investments;

•	fair value estimates associated with accounting for acquisitions;

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

•	redeemable noncontrolling interests.

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

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Fixed income funds comprise a number of positions in diversified fixed income funds that are managed by third-party managers. Underlying investments vary from high-grade corporate bonds to non-investment grade senior secured loans and bonds, but are generally invested in liquid fixed income markets. These funds have regularly published prices. The funds have liquidity terms that vary from daily up to 45 days notice.

•	Hedge funds invest in a diversified portfolio of debt and equity securities. The fixed income hedge funds have imposed lock-up periods of up to three years from the time of initial investment. Once eligible, redemptions are permitted quarterly with 90 days’ notice. The majority of our portfolio of fixed income hedge funds are

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

•	CLO equities comprise investments in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans. CLO equities denote direct investments by us in these securities.

•	CLO equity fund invests primarily in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans. The fund has a fair value of $11.9 million and is eligible for redemption in 2018.

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

•	Call options on equities comprise directly held options to purchase the common equity of publicly traded corporations.

•	Other primarily comprises a fund that provides loans to educational institutions throughout the United States and its territories.

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The funds held balance in relation to the Allianz transaction, described in Note 4 - "Significant New Business" in our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. This receives a variable return reflecting the economics of the investment portfolio underlying the funds held asset and qualifies as an embedded derivative. We have recorded the aggregate of the funds held, typically held at cost, and the embedded derivative as a single amount in our consolidated balance sheet. As at March 31, 2018 and December 31, 2017, the funds held at cost had a carrying value of $1,021.7 million and $994.8 million, respectively, and the embedded derivative had a fair value of $(23.3) million and $4.7 million, respectively, the aggregate of which was $998.4 million and $999.5 million, respectively, as included in the table below.

•	The funds held balance in relation to the QBE reinsurance transaction described in Note 4 - "Significant New Business" in our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017, for which we elected the fair value option.

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

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

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

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

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

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

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

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

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

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

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

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

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

•	For our investments in call options on publicly traded equities, we measure fair value by obtaining the latest option price as of our reporting date. These are classified as Level 2.

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

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

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

•	An acceleration of the estimated payment pattern would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable. Conversely, a deceleration of the estimated payment pattern would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable.

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•	Atrium Underwriting Group Limited and its subsidiaries ("Atrium"), which manage and underwrite specialist insurance and reinsurance business for Lloyd’s Syndicate 609; and

•	StarStone Insurance Bermuda Limited and its subsidiaries ("StarStone"), which is an A.M. Best A- rated global specialty insurance group with multiple underwriting platforms.

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Net investment income. In a rising interest rate environment, our net investment income would improve as maturities are reinvested at higher rates. Conversely, in a declining interest rate environment, our net investment income would decline as maturities are reinvested at lower rates. All else being equal, we would also expect our net investment income to grow as total investable assets increases as we acquire more business, partially offset by reductions in the investment portfolio for paid claims. We have also been implementing strategies to increase the duration of certain investment portfolios to more closely align to the duration of our reserves.

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Net realized and unrealized gains or losses. These arise from investments in fixed maturities, funds held, equity securities and other investments. Given the nature of our investments in fixed maturities and the average duration of our fixed maturity securities, the return of our fixed maturities investments will be impacted by changes in interest rates. In a rising rate environment, securities may experience unrealized losses prior to maturity. During the first quarter of 2018, we recognized net unrealized losses on our investments in fixed maturities of $100.3 million, primarily due to rising sovereign yields and widening credit spreads. We account for our fixed maturity securities as "trading", whereas other companies in our industry may utilize "available-for-sale" accounting. The difference is that unrealized changes on investments classified as trading are recorded through earnings, whereas unrealized changes on investments classified as available-for-sale are recorded directly to shareholders' equity. We may experience further unrealized losses on our fixed maturity investments, depending on investment conditions and general economic conditions. Unrealized amounts would only become realized in the event of a sale of the specific securities prior to maturity or a credit default. For

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•	Consolidated net losses of $41.2 million and basic and diluted losses per ordinary share of $2.12

•	Net losses from Non-life Run-off segment of $36.9 million, including investment results

•	Net investment income of $66.3 million and net realized and unrealized losses of $143.0 million, comprised of $6.0 million of net realized losses and $137.1 million of net unrealized losses

•	Net premiums earned of $170.2 million, including $35.2 million and $126.8 million in our Atrium and StarStone segments, respectively

•	Combined ratios of 94.9% and 99.6% for the active underwriting operations within our Atrium and StarStone segments, respectively

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•	Total investments, cash and funds held of $11,264.1 million

•	Total reinsurance balances recoverable of $2,368.7 million

•	Total assets of $15,611.7 million

•	Shareholders' equity of $3,100.0 million and redeemable noncontrolling interest of $480.8 million

•	Total gross reserves for losses and LAE of $8,986.1 million, with $1,890.1 million of gross reserves assumed in our Non-life Run-off operations during the three months ended March 31, 2018

•	Diluted book value per ordinary share of $157.06

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Non-life Run-off - Net losses attributable to the Non-life Run-off segment were $36.9 million for the three months ended March 31, 2018 compared to net earnings of $41.2 million for the three months ended March 31, 2017. The decrease in net earnings of $78.0 million was primarily due to net realized and unrealized losses of $126.3 million on the investment portfolio in the current period, partially offset by higher favorable loss reserve development and lower expenses;

•	Atrium - Net earnings were $2.0 million and $3.1 million for the three months ended March 31, 2018 and 2017, respectively. Net earnings were relatively consistent, although included a higher loss ratio in the current quarter as the prior period experienced a lower loss frequency, and lower investment results;

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StarStone - Net losses were $3.1 million for the three months ended March 31, 2018 compared to net earnings of $10.5 million for the three months ended March 31, 2017. The decrease in net earnings was primarily attributable to net realized and unrealized losses on the investment portfolio, as discussed below, and a tax expense in 2018 compared to a tax benefit in 2017, partially offset by the allocation to noncontrolling interests;

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Net Realized and Unrealized Losses - Net realized and unrealized losses were $143.0 million for the three months ended March 31, 2018 compared to net realized and unrealized gains of $58.5 million for the three months ended March 31, 2017. Net unrealized losses for the three months ended March 31, 2018 included net unrealized losses of $100.3 million on fixed maturities investments, which are accounted for on a trading basis through net earnings. The unrealized losses were primarily driven by increased sovereign yields and widening of corporate credit spreads in the current quarter. Many insurance companies predominantly use available-for-sale accounting where unrealized amounts are recorded directly to shareholders’ equity and therefore do not impact earnings. Unrealized amounts would only become realized in the event of a sale of the specific securities prior to maturity or a credit default.

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Noncontrolling Interest - The net (earnings) losses attributable to noncontrolling interest are directly related to the results from those subsidiary companies in which there are either noncontrolling interests or redeemable noncontrolling interests. The net earnings attributable to noncontrolling interest were $0.8 million compared to net earnings attributable to noncontrolling interest of $17.4 million, for the three months ended March 31, 2018 and 2017, respectively. The decrease was driven by the net losses in the StarStone segment, primarily due to the net realized and unrealized investment losses in 2018 discussed above.

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(1)	Refer to "Underwriting Ratios" for a description of how these ratios are calculated.

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•	net realized losses on sale of investments of $6.0 million for the three months ended March 31, 2018, compared to net realized losses on sale of investments of $4.2 million for the three months ended March 31, 2017, an increase in net realized losses on sale of investments of $1.8 million;

•	net unrealized losses on fixed maturity securities, trading, of $100.3 million for the three months ended March 31, 2018, compared to net unrealized gains of $23.3 million for the three months ended March 31, 2017, a decrease of $123.6 million, primarily driven by increased sovereign yields and widening of corporate credit spreads in the current period;

•	net unrealized gains on equity securities, trading, of $3.8 million for the three months ended March 31, 2018, compared to net unrealized gains of $8.7 million for the three months ended March 31, 2017, a decrease of $4.9 million, primarily driven by a general decline in equity markets in 2018;

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negative change in fair value of other investments of $9.7 million for the three months ended March 31, 2018, compared to positive change of $23.5 million for the three months ended March 31, 2017, a decrease of $33.2 million, primarily driven by lower returns in private equities and private equity funds, fixed income funds and equity funds partially offset by higher returns in hedge funds and CLO equities; and

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negative change in fair value of embedded derivative on funds held and negative change in fair value option on funds held of $30.9 million for the three months ended March 31, 2018, compared to positive change of $7.2 million for the three months ended March 31, 2017, a decrease of $38.1 million, primarily driven by increased sovereign yields and widening of corporate credit spreads in the current period.

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•	net realized losses of $4.8 million in 2018, compared to net realized losses of $2.6 million in 2017, an increase in net realized losses of $2.3 million;

•	net unrealized losses on fixed maturity securities, trading, of $86.0 million in 2018, compared to net unrealized gains of $20.0 million in 2017, a decrease of $106.0 million, primarily driven by increased sovereign yields and widening of corporate credit spreads in the current period;

•	net unrealized losses on equity securities, trading, of $0.6 million in 2018, compared to net unrealized gains of $8.4 million in 2017, a decrease of $8.9 million, primarily driven by the decline in the equity markets in 2018;

•	negative change in fair value of other investments of $4.0 million in 2018, compared to positive change of $18.5 million in 2017, a decrease of $22.5 million, primarily driven by lower returns in private equities and private equity funds, fixed income funds and equity funds, partially offset by higher returns in hedge funds and CLO equities; and

•	negative change in fair value of embedded derivative on funds held and negative change in fair value option on funds held of $30.9 million in 2018, compared to positive change of $7.2 million in 2017, a decrease of $38.1 million, primarily driven by increased sovereign yields and widening of corporate credit spreads in the current period.

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•	net unrealized losses on fixed maturities, trading, of $13.2 million in 2018, compared to net unrealized gains of $3.3 million in 2017, a decrease of $16.4 million, driven by increased sovereign yields and widening of corporate credit spreads in the current period; and

•	negative change in fair value of other investments of $3.2 million in 2018, compared to positive change of $4.9 million, a decrease of $8.1 million due to lower returns on private equities, fixed income and equity funds.

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(1)

The reserves for losses and LAE represent management’s estimate of the ultimate cost of settling losses. The estimation of losses is based on various complex and subjective judgments. Actual losses paid may differ, perhaps significantly, from the reserve estimates reflected in our financial statements. Similarly, the timing of payment of our estimated losses is not fixed and there may be significant changes in actual payment activity. The assumptions used in estimating the likely payments due by period are based on our historical claims payment experience and industry payment patterns, but due to the inherent uncertainty in the process of estimating the timing of such payments, there is a risk that the amounts paid in any such period can be significantly different from the amounts disclosed above. The amounts in the above table represent our estimates of known liabilities as of March 31, 2018 and do not take into account corresponding reinsurance balance recoverable amounts that would be due to us. Furthermore, certain of the reserves included in the audited consolidated financial statements as of March 31, 2018 were acquired by us and initially recorded at fair value with subsequent amortization, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect the fair value adjustment in the amount payable.

(2)	Policy benefits for life and annuity contracts recorded in our audited consolidated balance sheet as at March 31, 2018 of $116.8 million are computed on a discounted basis, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect a discount of the amount payable.

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•	risks associated with implementing our business strategies and initiatives;

•	the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time;

•	risks relating to our acquisitions, including our ability to continue to grow, successfully price acquisitions, evaluate opportunities, address operational challenges, support our planned growth and assimilate acquired companies into our internal control system in order to maintain effective internal controls, provide reliable financial reports and prevent fraud;

•	risks relating to our active underwriting businesses, including unpredictability and severity of catastrophic and other major loss events, failure of risk management and loss limitation methods, the risk of a ratings downgrade or withdrawal, cyclicality of demand and pricing in the insurance and reinsurance markets;

•	risks relating to the performance of our investment portfolio and our ability to structure our investments in a manner that recognizes our liquidity needs;

•	changes and uncertainty in economic conditions, including interest rates, inflation, currency exchange rates, equity markets and credit conditions, which could affect our investment portfolio, our ability to finance future acquisitions and our profitability;

•	the risk that ongoing or future industry regulatory developments will disrupt our business, affect the ability of our subsidiaries to operate in the ordinary course or to make distributions to us, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business;

•	risks that we may require additional capital in the future, which may not be available or may be available only on unfavorable terms;

•	risks relating to the availability and collectability of our reinsurance;

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•	losses due to foreign currency exchange rate fluctuations;

•	increased competitive pressures, including the consolidation and increased globalization of reinsurance providers;

•	emerging claim and coverage issues;

•	lengthy and unpredictable litigation affecting assessment of losses and/or coverage issues;

•	loss of key personnel;

•	the ability of our subsidiaries to distribute funds to us and the resulting impact on our liquidity;

•	our ability to comply with covenants in our debt agreements;

•	changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at management’s discretion;

•	operational risks, including system, data security or human failures and external hazards;

•	risks relating to our ability to obtain regulatory approvals, including the timing, terms and conditions of any such approvals, and to satisfy other closing conditions in connection with our acquisition agreements, which could affect our ability to complete acquisitions;

•	our ability to implement our strategies relating to our active underwriting businesses;

•	risks relating to our investments in life settlements contracts, including that actual experience may differ from our assumptions regarding longevity, cost projections, and risk of non-payment from the insurance carrier;

•	risks relating to our subsidiaries with liabilities arising from legacy manufacturing operations;

•	tax, regulatory or legal restrictions or limitations applicable to us or the insurance and reinsurance business generally;

•	changes in tax laws or regulations applicable to us or our subsidiaries, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the United States or elsewhere;

•	changes in Bermuda law or regulation or the political stability of Bermuda; and

•	changes in accounting policies or practices.

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(1)	Assumes 10% change in the U.S. dollar relative to other currencies

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(1)	Consists of shares withheld from employees in order to facilitate the payment of withholding taxes on restricted shares granted pursuant to our equity incentive plan. The price for the shares is their fair market value, as determined by reference to the closing price of our ordinary shares on the vesting date.

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