The slight decline in consolidated investment income for the year ended December 31, 2015 as compared to the same period ended 2014 was primarily attributable to the reduction of rental income due to sale of an investment property in 2014. Consolidated net investment income decreased for the year ended December 31, 2014 as compared to the same period ended 2013 due primarily to the continued reinvestment at market yields below the portfolio’s book yield and an increased focus on total portfolio returns relative to investment income. Additionally, the decline in consolidated net investment income was impacted by the transfer of invested assets used to settle a quota share reinsurance agreement within our Syndicate 1200 segment. Total invested assets at December 31, 2015 were $4,020.4 million, net of $95.3 million of invested assets attributable to Syndicate 1200’s trade capital providers. Total invested assets at December 31, 2014 were $4,022.7 million, net of $75.2 million of invested assets attributable to Syndicate 1200’s trade capital providers. Total invested assets at December 31, 2013 were $3,991.9 million, net of $87.3 million of invested assets attributable to Syndicate 1200’s trade capital providers.
Consolidated losses and loss adjustment expenses were $766.1 million, $747.4 million and $742.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. The consolidated loss ratios were comparable for the years ended December 31, 2015 and 2014 primarily due to improved current accident year losses in 2015, partially offset by increased catastrophe losses and reduced net favorable development reserve development on prior accident years. The decline in the consolidated loss ratio for the year ended December 31, 2014 as compared to the same period in 2013 was primarily attributable to improved current accident year losses in 2014, coupled with reduced catastrophe losses.
Included in losses and loss adjustment expenses for 2015 were $24.9 million in catastrophe losses resulting from United States and other storm activity, and the Tianjin explosion. Partially offsetting these current accident year losses was $32.4 million of net favorable development on prior year accident loss reserves, which is presented in the table below.
Included in losses and loss adjustment expenses for 2014 was $18.7 million in catastrophe losses resulting from storm activity in the United States, various hailstorms, Typhoon Rammasum and Hurricane Odile. Partially offsetting these 2014 accident year losses was $37.7 million of net favorable development on prior year accident loss reserves, primarily attributable to favorable development in our general liability line and our Syndicate 1200 liability and property lines, partially offset by unfavorable development in the commercial multi-peril and commercial automobile lines.
The following table summarizes the above referenced loss reserve development as respects to prior year loss reserves by line of business for the year ended December 31, 2015:
Consolidated underwriting, acquisition and insurance expenses were $539.6 million, $539.2 million and $510.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. The decline in the consolidated expense ratio for 2015 as compared to 2014
was due to lower acquisition costs primarily attributable to lower premium taxes, fees and assessments coupled with increased ceding commissions received. Non-acquisition cost increased due to higher compensation and information technology costs, partially offset by lower outside services expense. The increase in the consolidated expense ratio for 2014 as compared to 2013 was primarily attributable to increased compensation related costs, coupled with increased consulting and information technology expenses.
Consolidated interest expense was $19.0 million, $19.9 million and $20.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. The decline in consolidated interest expense in 2015 as compared to 2014 was the result of slightly reduced interest rates on our variable rate debt instruments. The decline in consolidated interest expense in 2014 as compared to 2013 was the result of the July 2014 extinguishment of a junior subordinated debenture.
The consolidated provisions for income taxes were $14.3 million, $32.8 million and $36.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. The consolidated income tax provision represents the income tax expense associated with our operations based on the tax laws of the jurisdictions in which we operate. Therefore, the consolidated provision for income taxes represents taxes on net income for our United States, Ireland, Belgium, Brazil, Switzerland and United Kingdom operations. The consolidated effective taxes rates were 8.1%, 15.2% and 20.3% for the years ended December 31, 2015, 2014 and 2013, respectively. The decline in the consolidated effective tax rate for the year ended December 31, 2015 as compared to 2014 was primarily attributable to reduced taxable pretax income in the United States while permanent tax differences remained consistent. Pretax income was higher in 2014, due to the recognition in 2014 of a $43.3 million realized gain from the sale of property. Additionally, our United Kingdom operations reported a tax benefit for 2015, primarily due to the effects of foreign currency exchange rates. The decline in the consolidated effective tax rate for the year ended December 31, 2014 as compared to 2013 was primarily attributable to increased income from our Bermuda operations, which is not subject to income taxes.
The increase in gross written and earned premiums for the year ended December 31, 2015 as compared to the same periods ended 2014 and 2013 was primarily attributable to growth in all units, with the exception of contract and transportation. Premiums for the contract unit continued to decline due to increased competition and low rates. Premiums for the transportation business continued to decline, as we began exiting the commercial auto lines in late 2013 due to reduced profitability. Offsetting these declines was growth primarily in the casualty, management liability and errors and omissions lines. The Excess and Surplus lines segment continues to be impacted by increased competition and declining rates.
Included in losses and loss adjustment expense for the year ended December 31, 2014 was $2.3 million in catastrophe losses from storm activity in the United States. Offsetting the catastrophe losses was $47.4 million of net favorable loss reserve development on prior accident years primarily due to $63.2 million of favorable development in the general and products liability lines of business. Partially offsetting this net favorable development was $12.5 million of unfavorable development in commercial automobile lines and $3.3 million in the property lines.
The decline in the loss ratio for the year ended December 31, 2015 as compared to the same period in 2014 was primarily attributable to improved current accident year results. The decrease in the loss ratio for the year ended December 31, 2014 as compared to the same period in 2013 was primarily attributable to improved current accident year results including a lower level of large losses largely offset by higher net unfavorable loss reserve development on prior accident years.
Included in losses and loss adjustment expense for the year ended December 31, 2015 was $5.2 million in catastrophe losses for storm activity in the United States. Included in losses and loss adjustment expenses was $9.1 million in net unfavorable loss reserve development on prior accident years, primarily attributable to $11.9 million of unfavorable development in general liability and $8.7 million in unfavorable development in the workers compensation lines due to increases in claim severity. Partially offsetting this unfavorable development was $8.8 million of favorable development in short-tail lines and $2.1 million of favorable development on an assumed directors and officers program.
Fee and other expense, net, increased for the year ended December 31, 2015 as compared to the same period ended 2014 due to the recognition of contingent consideration payable from a 2011 acquisition. The decline in fee and other expense, net for the year ended December 31, 2014 as compared to 2013 was primarily due to expenses outpacing revenues in 2013 as we began to focus on developing and expanding fee-based business.
The decline in gross written premiums for the year ended December 31, 2015 as compared to the same periods in 2014 and 2013 was primarily attributable to declines in our property reinsurance unit due to increased competition and declining rates. Additionally, gross written premiums for our Brazil operations declined due to the deterioration of the Brazilian currency. Partially offsetting this decline was increased gross written premiums in our casualty and professional liability units. The increase in earned premiums for the year ended December 31, 2015 as compared to the same periods in 2014 and 2013 was primarily due to a reduction in our ceding percentages, coupled with a change in business mix.
Losses and loss adjustment expenses for the year ended December 31, 2013 included $16.5 million in catastrophe losses primarily attributable to Canadian and European floods and a German hailstorm. Loss reserve development on prior accident years was negligible.
For 2015, we reduced our participation percentage on the Syndicate to 68%, down from 75% for 2014 and 86% for 2013. The balance of the capital supporting the Syndicate is made up primarily by trade and other capital providers. The increase in gross written premiums for the year ended December 31, 2015 as compared to the same period in 2014 was primarily attributable to increases in all divisions, excluding marine and energy, as we continued to establish new products, entered the Asian market and expanded profitable lines. The decline in gross written premiums for the year ended December 31, 2014 as compared to 2013 was attributable to reductions in the property and general liability lines as we exited certain unprofitable accounts. Partially offsetting these declines were increased gross written premiums in the marine and energy and political risk lines. The Syndicate 1200 segment has been adversely impacted by increased competition beginning in 2014 and continuing into 2015. The decline in earned premiums for the year ended December 31, 2015 as compared to the same period ended 2014 was primarily due to the reduction in our participation percentage. The increase in earned premiums for the year ended December 31, 2014 as compared to the same period ended 2013 was due to increased gross written premiums in the fourth quarter of 2013 and continuing into the first half of 2014.
The increase in the loss ratio for the year ended December 31, 2015 as compared to the same period in 2014 was primarily attributable to reduced net favorable loss reserve development on prior accident years partially offset by current accident year results. The decline in the loss ratio for the year ended December 31, 2014 as compared to the same period in 2013 was primarily attributable increased net favorable loss reserve development on prior accident years partially offset by increased catastrophe losses
Losses and loss adjustment expenses are reported net of losses ceded to the trade capital providers. Included in losses and loss adjustment expenses for the year ended December 31, 2015 was $5.0 million of catastrophe losses resulting from the Tianjin explosion and various storms. Offsetting the catastrophe losses was $10.3 million in net favorable loss reserve development on prior accident years primarily attributable to $5.5 favorable development in various property classes, $6.2 million favorable development in the liability lines and $2.4 million favorable development in the energy lines, partially offset by $2.5 million of unfavorable development in the Specialty lines.
The Syndicate 1200 segment reported no catastrophe losses for the year ended December 31, 2013. The Syndicate 1200 segment had net favorable loss development of $6.2 million primarily attributable to $12.8 million of favorable development in various property classes, partially offset by $6.3 million of unfavorable development in liability lines primarily attributable to the general liability lines.
Earned premiums for the years ended December 31, 2015, 2014 and 2013 were primarily attributable to adjustments resulting from final audits, reinstatement premiums and other adjustments on policies previously underwritten.
Losses and loss adjustment expenses for the year ended December 31, 2015 included $8.6 million of net unfavorable loss reserve development on prior accident years primarily driven by $5.9 million of unfavorable development in our run-off workers compensation lines due to increasing medical costs on older claims and the unwind of reserve discount, $4.2 million of unfavorable development in our asbestos and environmental exposures driven by increased defense costs in our primary asbestos exposure and $1.2 million of unfavorable development in our other assumed business. Partially offsetting this unfavorable development was $2.7 million of net favorable development in our run-off property catastrophe reinsurance lines.
Losses and loss adjustment expenses for the year ended December 31, 2013 included $15.5 million of net unfavorable loss reserve development on prior accident years primarily driven by $10.5 million in general liability lines for our asbestos and
environmental exposure and $4.4 million in our other run-off lines. The unfavorable development for our asbestos and environmental exposure was driven by increasing defense costs in the primary book of business, higher than expected loss activity in the assumed book of business and commutations and settlements in 2013. The unfavorable development for our Run-off Lines included $2.0 million in unfavorable development in medical malpractice liability due to the loss of the New York Liquidation Bureau funding for structured annuity payments.
We perform an extensive actuarial analysis of the asbestos and environmental reserves on at least an annual basis. We continually monitor the status of the claims and may make adjustments outside the annual review period. The review entails a detailed analysis of our direct and assumed exposure. We consider the indications from the various actuarial methods from the review to determine our best estimate of the asbestos and environmental losses and loss adjustment expense reserves. We primarily relied on a method that projects future reported claims and severities, with some weight given to other methods. This method relies most heavily on our historical claims and severity information, whereas other methods rely more heavily on industry information. The method produces an estimate of IBNR losses based on projections of future claims and the average severity for those future claims. The severities were calculated based on our specific data and in our opinion best reflect our liabilities based upon the insurance policies issued.
Ireland is indirectly owned by Argo Re and is a mid-level holding company subject to Irish laws, and its primary subsidiary is Argo Group US, Inc. Argo Group US, Inc. is a mid-level holding company subject to Delaware laws. Argo Group US, Inc. is the parent of all of our U.S. insurance subsidiaries.
For the year ended December 31, 2015, Argo Re paid a cash dividend of $41.0 million to Argo Group which was used to repay intercompany balances related primarily to dividend and interest payments and other corporate expenses. Argo Group US did not receive dividends from its US subsidiaries in 2015.
The payment of dividends by Argo Re is limited under Bermuda insurance laws which require Argo Re to maintain certain measures of solvency and liquidity. As of December 31, 2015, the unaudited statutory capital and surplus of Argo Re was estimated to be $1,260.1 million and the amount required to be maintained was estimated to be $345.9 million, thereby allowing Argo Re the potential to pay dividends or capital distributions within the parameters of the solvency and liquidity margins. We believe that the dividend and capital distribution capacity of Argo Re will provide us with sufficient liquidity to meet the operating and debt service commitments, as well as other obligations.
During 2016, Argo Group US, Inc. may be permitted to receive dividends from its subsidiaries as follows: Colony - $35.0 million, Argonaut Insurance Company - $41.6 million and Rockwood - $18.2 million. Business and regulatory considerations may impact the amount of dividends actually paid and prior approval of dividend payments may be required.
Included in the Credit Agreement is a provision that allows up to $17.5 million of the revolving credit facility to be used for letters of credit (“LOCs”), subject to availability. As of December 31, 2015, there were no borrowings outstanding and $0.2 million in LOCs against the Credit Facility.
On July 16, 2014, Argo Group US, Inc. purchased the outstanding PXRE Capital Trust V $20,000,000 Junior Subordinated Debt Securities (“Capital Trust V”) at a discount equal to 90.0% of the principal amount plus accrued and unpaid interest through the date of purchase for a total price of $18.2 million, resulting in the recognition of a $2.0 million pre-tax realized gain.
A summary of our outstanding junior subordinated debentures at December 31, 2015 is presented below:
We assumed debt through the acquisition of Syndicate 1200. These notes are unsecured. All are redeemable subject to certain terms and conditions at a price up to 100% of the principal plus accrued and unpaid interest. Interest on the U.S. Dollar and Euro notes is due semiannually and quarterly, respectively. A summary of the notes outstanding at December 31, 2015 is presented below:
capital and, therefore, returned capital to our shareholders through the share buy-back program and through dividend payments to our shareholders. We believe our liquidity generated from operations and, if required, from our investment portfolio, will be sufficient to meet our obligations for the foreseeable future. We believe we have access to various sources of liquidity including cash, investments and the ability to borrow under our revolving credit facility. Additionally, we continue to have access to the debt and equity markets, though we currently do not foresee needing access to these sources of capital.
Interest only on Junior Subordinated Debentures through 2033. Interest calculated based on the rate in effect at December 31, 2015. Principal due beginning May 2033.
Interest only on Senior Unsecured Fixed Rate Notes through 2042. Interest calculated based on the rate in effect at December 31, 2015. Principal due September 2042.
Interest only on Floating Rate Loan Stock through 2034. Interest calculated based on the rate in effect at December 31, 2015. Principal due beginning November 2034.
Claim payments do not have a contractual maturity; exact timing of claim payments cannot be predicted with certainty. The above table estimates timing of claim payments based on historical payment patterns and excludes the benefits of reinsurance recoveries.
We establish reserves for the estimated total unpaid costs of losses including loss adjustment expenses (“LAE”), for losses that occurred in 2015 and prior. Unless otherwise specified below, the term “loss reserves” encompasses reserves for both losses and LAE. Loss reserves reflect management’s best estimate of the total cost of (i) claims that have been incurred, but not yet paid and (ii) IBNR claims. Loss reserves established are not an exact calculation of our liability. Rather, loss reserves represent management’s best estimate of our liability based on application of actuarial techniques and other projection methodologies and taking into consideration other facts and circumstances known at the balance sheet date. The process of establishing loss reserves is complex and necessarily imprecise, as it involves using judgment that is impacted by many internal and external variables such as past loss experience, current claim trends and the prevailing social, economic and legal environments. In determining loss reserves, we give careful consideration to all available data and actuarial analyses and this process involves significant judgment.
The process for estimating our loss reserves begins with the collection and analysis of claim data. The data collected for actuarial analyses includes reported claims, paid losses and case reserve estimates sorted by the year the loss occurred. The data sets are sorted
into homogeneous groupings, exhibiting similar loss and exposure characteristics. We primarily use internal data in the analysis but also consider industry data in developing factors and estimates. We analyze loss reserves on a quarterly basis.
For short-tail lines of business such as property, the expected loss ratio method is initially selected and applied to earned premium at the beginning of an accident year. As property losses occur and are reported, and when claims adjusters have sufficient time and information to make specific claims estimates, the BF methods are used to supplement the expected loss ratio method. Property losses are generally reported within a short time from the date of loss, and in most instances, property claims are settled and paid within a relatively short period of time. Therefore, paid and incurred development methods are given greater weight in our analyses at the end of the accident year. In the event there are large claims incurred, we will analyze large loss information separately to ensure that the loss reserving methods appropriately recognize the magnitude of these losses in the evaluation of ultimate losses.
Actuarial methods used to forecast ultimate liabilities for general liability are adjusted to take into consideration the uncertainties related to handling claims expected to remain open for an extended period of time as well as the Claims and Book of Business risk factors noted above.
We perform our loss reserve analysis on a syndicate basis, which represents 100% of the business underwritten by the syndicate. We use reinsurance to cede a proportion of its premium income and incurred losses to reinsurers. The percentage of the cession differs for each underwriting year of account. The reinsurers’ share of provisions for claims is based on calculated amounts of outstanding claims and projections for IBNR, net of estimated unrecoverable amounts. Syndicate 1200 evaluates the reinsurance program in place for the class of business, claims experience for the year and security rating of the reinsurance companies involved.
The following discussion includes disclosure of possible variations from current estimates of loss reserves due to a change in certain key assumptions. Each of the impacts described below is estimated individually, without consideration for any correlation among other key assumptions or among lines of business. Therefore, it could be misleading to take each of the amounts described below and add them together in an attempt to estimate volatility for reserves in total. The estimated variations in reserves due to changes in key assumptions discussed below are a reasonable estimate of possible variations that may occur in the future, likely over a period of several calendar years. It is important to note that the variations discussed herein are not exhaustive and are not meant to be a worst or best case scenario, and therefore, it is possible that future variations may be more than amounts discussed below.
Recorded gross reserves for general liability were $1,423.3 million, with approximately 3% of that amount related to run-off asbestos and environmental exposures as of December 31, 2015. For general liability losses relating to ongoing operations, reported loss development patterns are a key assumption for this line of business. Historically, assumptions on reported loss development patterns have been impacted by, among other things, emergence of new types of claims (e.g., construction defect claims) or a shift in the mixture between smaller, more routine claims and larger, more complex claims. We have reviewed the historical variation in reported loss development patterns for general liability losses deriving from continuing operations. If the reported loss development patterns change by 10%, a change that we have experienced in the past and that management considers possible, the estimated net reserve could change by $60.0 million, in either direction.
Recorded gross reserves for the Syndicate 1200 segment were $604.0 million as of December 31, 2015. Estimation of our international liability reserves are subject to late emergence and mix shifts between smaller, more routine claims and larger, more complex claims. Our international property reserves are analyzed by the characteristics of the underlying exposures. Property loss reserves are characterized by relatively short periods between occurrence, reporting, determination of coverage and ultimate claims settlement. These property loss reserves tend to be the most predictable. Catastrophic loss reserves tend to exhibit more volatility due to the nature of the underlying loss event which may cause delays and complexity in estimating ultimate loss exposure.
In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation and inconsistent emerging legal outcomes. Furthermore, over time, insurers, including Argo Group, have experienced significant changes in the rate at which asbestos claims are brought, claims experience of particular insureds and value of claims, making predictions of future exposure from past experience uncertain. For example, in the past, insurers in general, including Argo Group, have experienced an increase in the number of asbestos-related claims due to, among other things, plaintiffs’ increased focus on new and previously peripheral defendants and an
The factors discussed above affect the variability of estimates for asbestos and environmental reserves including assumptions with respect to the frequency of claims, average severity of those claims settled with payment, dismissal rate of claims with no payment and expense to indemnity ratio. The uncertainty with respect to the underlying reserve assumptions for asbestos and environmental adds a greater degree of variability to these reserve estimates than reserve estimates for more traditional exposures. While this variability is reflected in part in the size of the range of reserves we have developed, that range may still not be indicative of the potential variance between the ultimate outcome and the recorded reserves. The process of estimating asbestos and environmental reserves, which is detailed in Note 21, “Run-off Lines,” of Notes to Consolidated Financial Statements, remains subject to a wide variety of uncertainties. Due to these uncertainties, further developments could cause us to change our estimates and ranges of our asbestos and environmental reserves, and the effect of these changes could be material to our consolidated operating results, financial condition and liquidity.
After reviewing the output from various loss reserving methodologies, we select our best estimate of reserves. We believe that the aggregate loss reserves at December 31, 2015 were adequate to cover claims for losses that have occurred, including both known claims and claims yet to be reported. As of December 31, 2015, we recorded gross loss reserves of $3,123.6 million and loss reserves net of reinsurance of $2,133.3 million. Although our financial reports reflect our best estimate of reserves, it is unlikely that the final amount paid will exactly equal our best estimate. In order to provide an indication of the variability in loss reserve estimates, we develop reserve ranges by evaluating the variability implied by the results of the various methods and impact of changing the assumptions and factors used in the loss reserving process.
We estimate our range of reserves, net of reinsurance, at approximately $1,950 million to $2,365 million as of December 31, 2015. In determining this range, we evaluated the variability of the loss reserves for each of our major operating segments, comprising both ongoing operations and run-off businesses. Our estimated range does not make a specific provision for sources of unknown or unanticipated correlated events such as potential sources of liability not anticipated at the time coverage was afforded, such as asbestos. These events in combination with other events which may not be contemplated by management in developing our range may cause reserves to develop either more or less favorably than indicated by assumptions that we consider reasonable. This means that the range of reserve values does not represent the range of all possible favorable or unfavorable reserve outcomes, and actual ultimate paid losses may fall outside this range. No one risk factor has been isolated for the purpose of performing a sensitivity or variability analysis on that particular risk factor.
Our investments in fixed maturities and stocks are classified as available-for-sale and reported at fair value under GAAP. Changes in the fair value of investments classified as available-for-sale are not recognized in income during the period, but rather are recognized as a separate component of shareholders’ equity until realized. Fair values of these investments are estimated using prices obtained
Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of Argo Group’s United States, Brazil, Ireland, Switzerland, Belgium, Malta and United Kingdom subsidiaries’ assets and liabilities. Deferred tax liabilities are recognized for temporary differences that will result in taxable amounts in future years. Deferred tax assets are recognized for deductible temporary differences and tax operating loss and tax credit carryforwards. The deferred tax assets and liabilities are measured by applying the enacted tax rates and laws in effect for the years in which such differences are expected to reverse. The components of our deferred tax asset are temporary differences primarily attributable to loss reserve discounting and unearned premium reserves. Our deferred tax liabilities resulted primarily from unrealized gains in the investment portfolio, deferred acquisition costs and underwriting profits arising from business conducted at Lloyd’s which do not become subject to corporation tax in the United Kingdom until the year in which such profits are distributed.
The evaluation of the recoverability of our net deferred tax asset and the need for a valuation allowance requires us to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the net deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed. At each balance sheet date, management assesses the need to establish a valuation allowance that reduces deferred tax assets when it is more likely than not that all, or some portion, of the deferred tax assets will not be realized. The valuation allowance is based on all available information including projections of future taxable income from each tax-paying component in each tax jurisdiction, principally derived from business plans and available tax planning strategies. If our assumptions and estimates that resulted in our forecast of future taxable income for each tax-paying component prove to be incorrect, an additional valuation allowance could become necessary, which could have a material adverse effect on our financial condition, results of operations, and liquidity.
For the years ended December 31, 2015, 2014 and 2013, all of our reporting units passed Step 1 of the goodwill impairment analysis as the fair value of each reporting unit were in excess of their carrying values. Therefore, Step 2 of the goodwill impairment analysis was not required. Any decline in the fair value of these reporting units could result in the carrying value of the reporting unit being in excess of fair value, triggering Step 2 of the impairment testing model, which could result in an impairment of goodwill.
Our market capitalization has increased in 2015, as our stock has traded at or above book value in the fourth quarter of 2015. We considered the market capitalization as one of the data points in performing our annual impairment test. We consider the changes in our market capitalization to be primarily attributable to global financial market conditions, as well as current trends within the insurance industry. The valuation analysis discussed above supports our view that goodwill and indefinite-lived intangible assets are not impaired at October 1, 2015. Through December 31, 2015, there have been no indicators of impairment of goodwill and indefinite-lived intangible assets. During 2016, we will monitor relevant internal and external factors and their potential impact on the fair value of our reporting segments, and if required, we will update our impairment analysis.
We evaluated our definite lived intangibles for indicators of impairment. If indicators of impairment had been identified, we would have been required to test definite lived intangible assets for impairment. As of October 1, 2015, the testing date, no indicators of impairment were identified. Therefore, we were not required to test for impairment. As with the indefinite-lived intangible assets, we will continue to monitor for indicators of impairment and test as required.