For information regarding the Company's future minimum property lease commitments see Note 13 to the consolidated financial statements.
(a) 26.6% decrease in gross written premiums at the London Company Market to $180.7 million in 2000 from $246.2 million in 1999. The decrease was predominantly the result of Terra Nova reducing its property writings on the property pro rata business by 68.4% to $13.5 million in 2000 from $42.7 million in 1999 as a consequence of a detailed review of poor performing accounts. In addition, Terra Nova reduced writings on marine and casualty lines to increase its focus on underwriting profitability.
In 1999, aviation business was written by aviation Syndicate 959 which was merged into Syndicate 1009 for 2000.
We have audited the accompanying consolidated balance sheet of Terra Nova (Bermuda) Holdings, Ltd. and subsidiaries (the Company) as of December 31, 2000, and the related consolidated statements of operations, comprehensive (loss) income, shareholder's equity and cash flows for the year then ended. In connection with our audit of the consolidated financial statements, we have also audited the 2000 financial statement schedules appearing under Item 14(a). These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audit.
The Company is a specialty property, casualty, marine and aviation insurance and reinsurance company. It operates in the London Market and the Lloyd's Market through its London based subsidiaries, Terra Nova and Markel Capital. The Company operates in the Continental European market through its French subsidiary, Corifrance. The Company ceased accepting new business through its Bermuda based subsidiary, Terra Nova (Bermuda) in April 2000. Writings originate worldwide. It writes most insurance and reinsurance business through brokers authorized to place business at Lloyd's. It also writes through non-Lloyd's brokers and with individual ceding companies. The broker is generally regarded as the agent of the insured or reinsured in placing the business. The Company also owns the business and assets of Markel Syndicate Management, a Lloyd's managing agent, consisting of the rights to manage certain Lloyd's syndicates (the "Markel Syndicate Management syndicates").
(a) Investments and related income: Investments in fixed maturities and equity securities are classified as available for sale and held with the intention of selling such investments from time to time, and are carried at fair value. Unrealized gains and losses, net of related deferred income taxes and minority interests, are recorded in shareholder's equity. Realized gains and losses are included in operations and determined by specific identification. Investment income is recorded as earned.
(g) Income taxes: Deferred income taxes are recorded on temporary differences between financial reporting and tax bases of assets and liabilities in accordance with Statement of Financial Accounting Standard ("SFAS") No. 109.
On March 24, 2000, the Company was acquired by Markel. As a result, Markel realigned its operations with the Company becoming its international division.