| Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The reserve for losses is established based on estimates of individual claims and actuarially determined estimates of future losses based on ProAssurance’s past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends and settlement patterns. Estimating the reserve, particularly the reserve appropriate for liability exposures, is a complex process. For a high proportion of the risks insured or reinsured by ProAssurance, claims may be resolved over an extended period of time, often five years or more, and may be subject to litigation. Estimating losses requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, the reserve estimate may vary considerably from the eventual outcome. The assumptions used in establishing ProAssurance’s reserve are regularly reviewed and updated by management as new data becomes available. Changes to estimates of previously established reserves are included in earnings in the period in which the estimate is changed. ProAssurance believes that the methods it uses to establish reserves are reasonable and appropriate. Each year, ProAssurance uses internal actuaries to review the reserve for losses of each insurance subsidiary. ProAssurance also engages consulting actuaries to review ProAssurance claims data and provide observations regarding cost trends, rate adequacy and ultimate loss costs. ProAssurance considers the views of the actuaries as well as other factors, such as known, anticipated or estimated changes in frequency and severity of claims, loss retention levels and premium rates, in establishing the amount of its reserve for losses. The statutory filings of each insurance company with the insurance regulators must be accompanied by a consulting actuary's certification as to their respective reserves. ProAssurance partitions its reserve by accident year, which is the year in which the claim becomes its liability. As claims are incurred (reported) and claim payments are made, they are aggregated by accident year for analysis purposes. ProAssurance also partitions its reserve by reserve type: case reserves and IBNR reserves. Case reserves are established by the claims department based upon the particular circumstances of each reported claim and represent ProAssurance’s estimate of the future loss costs (often referred to as expected losses) that will be paid on reported claims. Case reserves are decremented as claim payments are made and are periodically adjusted upward or downward as estimates regarding the amount of future losses are revised; a reported loss for an individual claim equates to the case reserve at any point in time plus the claim payments that have been made to date. IBNR reserves represent an estimate, in the aggregate, of future development on losses that have been reported to ProAssurance plus an estimate of losses that have been incurred but not reported. IBNR reserves are not estimated directly, but are calculated by subtracting claim payments to-date and case reserves as of the evaluation date from the projected ultimate losses which are determined as described below. Development of Prior Accident Years In addition to setting the initial reserve for the current accident year, each period ProAssurance reassesses the amount of reserve required for prior accident years. The foundation of ProAssurance’s reserve re-estimation process is an actuarial analysis that is performed by both the internal and consulting actuaries. This detailed analysis projects ultimate losses based on partitions which include line of business, geography, coverage layer and accident year. The procedure uses the most representative data for each partition, capturing its unique patterns of development and trends. In all, there are over 200 different partitions of ProAssurance's business for purposes of this analysis. ProAssurance believes that the use of consulting actuaries provides an independent view of the loss data as well as a broader perspective on industry loss trends. Reserving Methodologies For the HCPL, medical technology and workers’ compensation lines of business, the analysis performed by the consulting actuaries analyzes each partition of the business in a variety of ways and uses multiple actuarial methodologies in performing these analyses, including: Bornhuetter-Ferguson (Paid and Reported) Method, Paid Development Method, Reported Development Method, Average Paid Value Method, Average Reported Value Method, Backward Recursive Development Method, the Adjusted Reported and the Adjusted Paid Methods. Generally, methods such as the Bornhuetter-Ferguson method are used on more recent accident years where there is less data available on which to base the analysis. As time progresses and an increased amount of data is available for a given accident year, management gives more confidence to the development and average methods, as these methods typically rely more heavily on ProAssurance's own historical data. These methods emphasize different aspects of loss reserve estimation and provide a variety of perspectives for ProAssurance's decisions. For the workers’ compensation line of business in both the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance segments, ProAssurance utilizes the Reported Development Method, Paid Loss Development Method and Bornhuetter-Ferguson, to develop the reserve for each accident year. The actuarial review includes the stratification of claims data (lost time claims and medical only claims) using different variations that allow for identification of trends that may not be readily identifiable if the data was evaluated only in the aggregate. Reported and paid loss development factors are key assumptions in the reserve estimation process and are based on ProAssurance’s historical reported and paid loss development patterns. As accident years mature, the various actuarial methodologies produce more consistent loss estimates. For the Lloyd’s Syndicates segment business, given the immaturity of Syndicate 1729 and Syndicate 6131’s own experience, losses are initially estimated using the loss assumptions by risk category incorporated into the business plan submitted to Lloyd’s with consideration given to loss experience incurred to date. These assumptions were influenced by loss results reflected in Lloyd’s historical data for similar risks. As losses are reported and resolved and loss experience becomes more credible from a statistical perspective, actual loss experience is incorporated into the estimates. Certain of the methodologies utilized to estimate the ultimate losses for each partition of the reserve consider the actual amounts paid. Paid data is particularly influential when a large portion of known claims have been closed, as is the case for older accident years. In selecting a point estimate for each partition, management considers the extent to which trends are emerging consistently for all partitions and known industry trends. Thus, actual, rather than estimated severity trends are given more consideration. If actual severity trends are lower than those estimated at the time that reserves were previously established, the recognition of favorable development is indicated. This is particularly true for older accident years where actuarial methodologies give more weight to actual loss costs (severity). The various actuarial methods discussed above are applied in a consistent manner from period to period. In addition, ProAssurance performs statistical reviews of claims data such as claim counts, average settlement costs and severity trends when establishing the reserve. Selected point estimates of ultimate losses are utilized to develop estimates of ultimate losses recoverable from reinsurers, based on the terms and conditions of ProAssurance’s reinsurance agreements. An overall estimate of the amount receivable from reinsurers is determined by combining the individual estimates. ProAssurance’s net reserve estimate is the gross reserve point estimate less the estimated reinsurance recovery. Activity in the reserve for losses and loss adjustment expenses is summarized as follows: (In thousands) 2018 2017 2016 Balance, beginning of year $ 2,048,381 $ 1,993,428 $ 2,005,326 Less reinsurance recoverables on unpaid losses and loss adjustment expenses 335,585 273,475 249,350 Net balance, beginning of year 1,712,796 1,719,953 1,755,976 Net losses: Current year* 685,326 603,518 587,007 Favorable development of reserves established in prior years, net (92,116 ) (134,360 ) (143,778 ) Total 593,210 469,158 443,229 Paid related to: Current year (117,268 ) (106,633 ) (96,190 ) Prior years (412,711 ) (369,682 ) (383,062 ) Total paid (529,979 ) (476,315 ) (479,252 ) Net balance, end of year 1,776,027 1,712,796 1,719,953 Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 343,820 335,585 273,475 Balance, end of year $ 2,119,847 $ 2,048,381 $ 1,993,428 * Current year net losses in 2018 included incurred losses of $25.4 million related to a loss portfolio transfer entered into during the second quarter of 2018 (see Note 4). As discussed in Note 1 , estimating liability reserves is complex and requires the use of many assumptions. As time passes and ultimate losses for prior years are either known or become subject to a more precise estimation, ProAssurance increases or decreases the reserve estimates established in prior periods. The favorable loss development recognized in 2018 primarily reflected a lower than anticipated claims severity trend (i.e. the average size of a claim) for accident years 2011 through 2014 . The favorable development recognized in 2017 and 2016 was primarily due to lower than anticipated claims severity trends for accident years 2010 through 2014 and accident years 2009 through 2013 , respectively. On January 1, 2016, ProAssurance adopted new guidance that requires detailed disclosures related to its reserve for losses and loss adjustment expenses, including significant changes in methodologies and assumptions used in the calculation of its reserve. ProAssurance establishes its reserve and manages claims activity by coverage, product or line of business and various categories of reserves have similar characteristics. Therefore, ProAssurance has aggregated these reserve categories into several reserve groups that provide a more meaningful view of the amount, timing and uncertainty of cash flows arising from the liability. At the same time, these reserve groups present a disaggregated view of the major elements of the overall loss reserve liability. The reserve groups include HCPL claims-made reserve, HCPL occurrence reserve, medical technology liability claims-made reserve, workers’ compensation insurance reserve, segregated portfolio cell reinsurance - workers' compensation reserve, Syndicate 1729 casualty reserve, Syndicate 1729 property insurance reserve and Syndicate 1729 property reinsurance reserve. All other loss reserve categories are deemed to be less homogeneous or relatively small on a standalone basis and are included in other short-duration lines in the claims development reconciliation. The composition of the reserve groups is based on similar characteristics with respect to the risks being insured and the reporting and payout pattern of the underlying claims. In most instances the groups follow the coverage categorizations used in statutory financial reporting for U.S.-domiciled property-casualty insurance companies. HCPL claims are disaggregated into those claims covered by claims-made policies and those claims covered by occurrence policies. For claims-made policies, the insured event generally becomes a liability when the event is first reported to the insurer. For occurrence policies, the insured event becomes a liability when the event takes place, even if unknown at that time. Claims-made coverage has a short reporting pattern, with virtually all claims known shortly after the end of the policy period. Occurrence coverage claims can have an extended reporting pattern, with the time from the loss event until the filing of the claim often measured in years, at which point the claims resolution process begins. Although the resolution process and time frame is similar once a claim is reported, combining claims from claims-made and occurrence coverage types would result in distortion due to the difference in reporting lag. Medical technology liability reserves are grouped separately due to the nature of the risk, including the potential for mass torts and multiple claims arising out of the same product or service. The small amount of medical technology liability occurrence reserves are included in other short-duration lines. Workers' compensation reserves in the Workers' Compensation Insurance and the Segregated Portfolio Cell Reinsurance segment are each grouped separately due to the difference in the type of coverage provided and the differences in the claims resolution process as compared to other liability insurance. The small amount of HCPL reserves in the Segregated Portfolio Cell Reinsurance segment are included in other short-duration lines. Finally, claims arising from the Company's involvement in Syndicate 1729 are segregated into casualty (insurance and reinsurance), property insurance and property reinsurance groups. Property insurance claims generally have a shorter reporting and resolution time frame as compared to most casualty claims. The reporting and resolution patterns of property reinsurance claims differs from that of property insurance claims due to predominant coverage of catastrophic loss events on an aggregate basis rather than coverage of individual claims. Casualty reinsurance, on the other hand, generally provides coverage on a per-claim basis and the reporting and resolution time frame for these claims is not substantially different than those arising from casualty insurance written by Syndicate 1729. The small amount of reserves associated with Syndicate 6131 related to contingency and special property business are included in other short-duration lines. ProAssurance has elected to present reserve history for acquired entities in all periods shown in the tables below, including periods prior to acquisition. With the exception of the workers' compensation insurance and segregated portfolio cell workers' compensation reinsurance lines of business, virtually all other acquired entities are captured within the HCPL line of business. All information prior to 2018 disclosed in the Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance, Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance and Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance tables that follow is presented as supplementary information. The “Cumulative Number of Reported Claims” in the tables that follow includes the combined number of claims for an accident year and excludes projected unreported IBNR claims. A claim is considered reported when ProAssurance becomes aware of and accepts it for coverage under the terms of the Company's insurance contracts. Healthcare Professional Liability Reserve HCPL loss costs are impacted by many factors, including but not limited to the nature of the claim, including whether or not the claim is an individual or a mass tort claim, the personal situation of the claimant or the claimant's family, the outcome of jury trials, the legislative and judicial climate where any potential litigation may occur, general economic conditions and, for claims involving bodily injury, the trend of healthcare costs. ProAssurance sets an initial reserve using the average loss ratio used in pricing, plus an additional provision in consideration of the historical loss volatility ProAssurance and others in the industry have experienced. The average initial loss ratio for HCPL business has approximated 90% for recent years, which is higher than the underlying expected loss ratio due to provisions for loss volatility. Changes in observed claim frequency, severity or a combination of the two can result in variations in loss provisions. The reasons for the variability in loss provisions from period to period have included additional loss activity within ProAssurance’s excess and surplus lines business, provisions for losses in excess of policy limits, adjustments to ULAE, adjustments to the reserve for the DDR provisions in ProAssurance's policies and additional losses recorded for particular exposures, such as mass torts. These specific adjustments are made if ProAssurance believes the results for a given accident year are likely to exceed those anticipated by pricing. ProAssurance believes the use of a provision for volatility appropriately considers the inherent risks and limitations of the rate development process and the historic volatility of professional liability losses and produces a reasonable best estimate of the reserve required to cover actual ultimate unpaid losses. Healthcare Professional Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2018 ($ in thousands) Year Ended December 31, IBNR* Cumulative Number of Reported Claims 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 379,259 $ 370,642 $ 345,714 $ 320,368 $ 284,511 $ 265,478 $ 246,146 $ 230,849 $ 224,768 $ 220,703 $ (455 ) 3,828 2010 — $ 364,996 $ 354,787 $ 338,170 $ 312,813 $ 291,553 $ 279,713 $ 270,484 $ 258,466 257,714 $ (243 ) 3,847 2011 — — $ 348,916 $ 344,808 $ 331,884 $ 305,540 $ 289,400 $ 278,258 $ 264,777 254,329 $ (2,091 ) 3,532 2012 — — — $ 341,289 $ 324,418 $ 319,613 $ 306,956 $ 291,075 $ 279,589 271,110 $ 276 3,702 2013 — — — — $ 315,346 $ 304,209 $ 296,550 $ 287,140 $ 272,364 258,251 $ 173 3,783 2014 — — — — — $ 290,020 $ 289,397 $ 280,043 $ 267,442 256,968 $ (5,200 ) 3,320 2015 — — — — — — $ 276,492 $ 269,980 $ 271,138 270,814 $ (8,030 ) 3,266 2016 — — — — — — — $ 271,765 $ 274,643 287,551 $ (21,456 ) 3,481 2017 — — — — — — — — $ 283,746 295,883 $ (11,228 ) 3,677 2018 — — — — — — — — — 320,772 $ 129,334 3,558 Total $ 2,694,095 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 15,051 $ 71,272 $ 114,318 $ 153,563 $ 178,445 $ 191,420 $ 200,425 $ 205,372 $ 209,016 $ 213,568 2010 — $ 15,464 $ 69,551 $ 137,712 $ 180,432 $ 209,777 $ 221,693 $ 236,171 $ 240,945 243,675 2011 — — $ 14,417 $ 71,208 $ 133,004 $ 177,089 $ 198,112 $ 214,502 $ 224,982 233,103 2012 — — — $ 15,382 $ 73,571 $ 145,488 $ 190,997 $ 215,220 $ 231,652 244,512 2013 — — — — $ 16,938 $ 69,657 $ 127,496 $ 171,681 $ 197,265 213,879 2014 — — — — — $ 16,764 $ 59,485 $ 116,791 $ 154,236 186,239 2015 — — — — — — $ 9,172 $ 55,731 $ 111,741 161,896 2016 — — — — — — — $ 9,027 $ 51,869 109,756 2017 — — — — — — — — $ 16,309 63,171 2018 — — — — — — — — — 14,051 Total 1,683,850 All outstanding liabilities before 2009, net of reinsurance 11,724 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 1,021,969 Healthcare Professional Liability Occurrence Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2018 ($ in thousands) Year Ended December 31, IBNR* Cumulative Number of Reported Claims 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 34,450 $ 35,366 $ 36,802 $ 37,437 $ 34,099 $ 32,675 $ 28,731 $ 26,340 $ 24,572 $ 23,387 $ 1,519 246 2010 — $ 41,721 $ 43,238 $ 43,195 $ 42,233 $ 37,920 $ 35,831 $ 33,361 $ 29,338 26,501 $ 946 290 2011 — — $ 45,882 $ 44,956 $ 41,453 $ 39,917 $ 37,150 $ 35,004 $ 32,343 29,784 $ 2,136 342 2012 — — — $ 45,703 $ 46,513 $ 44,848 $ 40,692 $ 34,774 $ 32,691 29,857 $ 3,816 399 2013 — — — — $ 32,746 $ 36,602 $ 35,624 $ 34,393 $ 30,906 26,919 $ 971 356 2014 — — — — — $ 30,420 $ 29,918 $ 32,143 $ 29,869 25,885 $ 2,778 355 2015 — — — — — — $ 35,648 $ 35,347 $ 37,346 40,960 $ 4,667 355 2016 — — — — — — — $ 29,609 $ 28,790 27,240 $ 6,244 322 2017 — — — — — — — — $ 24,571 23,760 $ 19,890 270 2018 — — — — — — — — — 38,420 $ 36,196 118 Total $ 292,713 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 175 $ 2,255 $ 5,067 $ 7,947 $ 10,823 $ 13,248 $ 15,380 $ 16,025 $ 16,270 $ 17,022 2010 — $ 285 $ 1,881 $ 5,647 $ 9,120 $ 15,147 $ 21,837 $ 22,804 $ 23,313 23,832 2011 — — $ 291 $ 2,803 $ 8,059 $ 16,544 $ 19,197 $ 21,416 $ 23,194 24,539 2012 — — — $ 363 $ 2,430 $ 7,705 $ 12,212 $ 19,275 $ 21,435 23,095 2013 — — — — $ 369 $ 3,170 $ 7,826 $ 14,753 $ 16,787 18,949 2014 — — — — — $ 394 $ 2,260 $ 7,460 $ 10,519 14,604 2015 — — — — — — $ (350 ) $ 786 $ 4,854 11,626 2016 — — — — — — — $ (182 ) $ (195 ) 2,883 2017 — — — — — — — — $ (6,809 ) (5,858 ) 2018 — — — — — — — — — 65 Total 130,757 All outstanding liabilities before 2009, net of reinsurance 7,985 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 169,941 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Healthcare Professional Liability Claims-Made 5.4% 19.5% 22.8% 17.0% 10.4% 5.9% 4.6% 2.4% 1.4% 2.1% Healthcare Professional Liability Occurrence (2.3%) 6.1% 15.0% 17.6% 15.2% 11.7% 6.1% 3.1% 1.5% 3.2% Medical Technology Liability Reserve The risks insured in the medical technology liability line of business are more varied and policies are individually priced based on the risk characteristics of the policy and the account. These policies often have substantial deductibles or self-insured retentions and the insured risks range from startup operations to large multinational entities. Premiums are established using the most recently developed actuarial estimates of losses expected to be incurred based on factors which include: results from prior analysis of similar business, industry indications, observed trends and judgment. Claims in this line of business primarily involve bodily injury to individuals and are affected by factors similar to those of the HCPL line of business. For the medical technology liability line of business, ProAssurance also establishes an initial reserve using a loss ratio approach, including a provision in consideration of historical loss volatility that this line of business has exhibited. Medical Technology Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2018 ($ in thousands) Year Ended December 31, IBNR* Cumulative Number of Reported Claims 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 30,462 $ 31,183 $ 27,523 $ 26,181 $ 23,425 $ 21,733 $ 20,551 $ 19,264 $ 18,176 $ 17,984 $ 251 699 2010 — $ 26,077 $ 27,063 $ 25,175 $ 23,307 $ 19,315 $ 17,439 $ 16,047 $ 16,878 18,611 $ 402 498 2011 — — $ 17,249 $ 20,930 $ 19,166 $ 15,836 $ 13,794 $ 12,487 $ 12,358 8,202 $ 500 521 2012 — — — $ 11,162 $ 9,989 $ 8,906 $ 7,441 $ 5,824 $ 4,797 5,051 $ 732 220 2013 — — — — $ 9,807 $ 9,955 $ 9,536 $ 7,226 $ 4,697 3,566 $ 380 218 2014 — — — — — $ 9,989 $ 10,306 $ 9,012 $ 8,984 7,679 $ 2,544 272 2015 — — — — — — $ 9,376 $ 8,757 $ 7,193 5,929 $ 2,770 155 2016 — — — — — — — $ 9,200 $ 8,467 7,413 $ 3,482 180 2017 — — — — — — — — $ 11,049 10,143 $ 7,834 95 2018 — — — — — — — — — 10,141 $ 9,818 188 Total $ 94,719 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 116 $ 5,071 $ 7,742 $ 14,675 $ 14,933 $ 15,097 $ 15,184 $ 15,186 $ 16,515 $ 17,522 2010 — $ 485 $ 3,557 $ 8,491 $ 12,283 $ 11,725 $ 12,146 $ 12,253 $ 15,366 17,660 2011 — — $ 118 $ 2,034 $ 3,846 $ 5,062 $ 7,376 $ 7,240 $ 7,799 7,664 2012 — — — $ 568 $ 1,520 $ 2,805 $ 3,247 $ 3,366 $ 3,676 3,800 2013 — — — — $ 102 $ 1,029 $ 1,967 $ 2,599 $ 3,092 3,102 2014 — — — — — $ 388 $ 1,527 $ 2,564 $ 3,046 3,724 2015 — — — — — — $ 25 $ 440 $ 1,625 2,097 2016 — — — — — — — $ 53 $ 1,690 2,365 2017 — — — — — — — — $ 56 1,681 2018 — — — — — — — — — 6 Total 59,621 All outstanding liabilities before 2009, net of reinsurance 1,101 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 36,199 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Medical Technology Liability 2.6 % 19.1 % 19.7 % 16.4 % 8.6 % 1.6 % 2.6 % 5.0 % 9.9 % 5.6 % Workers' Compensation Insurance Reserve Many factors affect the ultimate losses incurred for the workers' compensation coverages in the Workers' Compensation Insurance segment including, but not limited to, the type and severity of the injury, the age and occupation of the injured worker, the estimated length of disability, medical treatment and related costs, and the jurisdiction and workers' compensation laws of the injury occurrence. ProAssurance uses various actuarial methodologies in developing the workers’ compensation reserve combined with a review of the exposure base generally based upon payroll of the insured. For the current accident year, given the lack of seasoned information, the different actuarial methodologies produce results with considerable variability; therefore, more emphasis is placed on supplementing results from the actuarial methodologies with trends in exposure base, medical expense inflation, general inflation, severity, and claim counts, among other things, to select an expected loss ratio. Workers' Compensation Insurance Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2018 ($ in thousands) Year Ended December 31, IBNR* Cumulative Number of Reported Claims 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 45,354 $ 45,354 $ 45,354 $ 45,354 $ 47,811 $ 48,372 $ 47,905 $ 47,480 $ 47,480 $ 47,480 $ 80 10,129 2010 — $ 55,852 $ 55,852 $ 55,852 $ 54,837 $ 54,779 $ 55,200 $ 54,600 $ 54,600 54,600 $ 58 12,913 2011 — — $ 65,665 $ 65,783 $ 71,521 $ 72,280 $ 72,420 $ 72,495 $ 72,795 72,795 $ 354 15,244 2012 — — — $ 80,285 $ 76,551 $ 75,848 $ 76,357 $ 75,836 $ 75,636 75,136 $ 724 16,204 2013 — — — — $ 86,973 $ 85,935 $ 86,928 $ 88,010 $ 88,810 88,810 $ 1,017 16,429 2014 — — — — — $ 93,019 $ 93,529 $ 93,029 $ 92,229 92,229 $ 3,350 16,210 2015 — — — — — — $ 100,101 $ 100,454 $ 98,454 97,654 $ 8,522 16,548 2016 — — — — — — — $ 101,348 $ 97,348 92,148 $ 13,540 15,972 2017 — — — — — — — — $ 99,874 99,874 $ 12,489 16,058 2018 — — — — — — — — — 118,095 $ 32,816 17,556 Total $ 838,821 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 14,701 $ 31,465 $ 39,351 $ 43,436 $ 45,689 $ 46,321 $ 46,928 $ 47,012 $ 47,089 $ 47,189 2010 — $ 20,086 $ 39,098 $ 46,762 $ 51,117 $ 52,530 $ 53,443 $ 53,734 $ 53,974 54,014 2011 — — $ 21,993 $ 50,900 $ 62,307 $ 67,945 $ 70,146 $ 70,934 $ 71,662 71,856 2012 — — — $ 27,448 $ 56,122 $ 65,908 $ 70,558 $ 72,766 $ 73,662 73,676 2013 — — — — $ 30,554 $ 63,825 $ 76,813 $ 82,369 $ 85,689 86,783 2014 — — — — — $ 30,368 $ 65,922 $ 77,631 $ 85,022 87,314 2015 — — — — — — $ 32,078 $ 65,070 $ 78,947 83,483 2016 — — — — — — — $ 28,377 $ 58,192 69,237 2017 — — — — — — — — $ 31,586 70,333 2018 — — — — — — — — — 41,619 Total 685,504 All outstanding liabilities before 2009, net of reinsurance 2,208 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 155,525 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Workers' Compensation Insurance 33.2 % 36.5 % 14.1 % 7.1 % 3.3 % 1.3 % 0.7 % 0.3 % 0.1 % 0.2 % Segregated Portfolio Cell Reinsurance - Workers' Compensation Reserve The Company estimates and reserves for the workers' compensation business assumed by the Segregated Portfolio Cell Reinsurance segment in the same manner as for its workers' compensation business in the Workers' Compensation Insurance segment, as previously discussed. Segregated Portfolio Cell Reinsurance - Workers' Compensation Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2018 ($ in thousands) Year Ended December 31, IBNR* Cumulative Number of Reported Claims 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 17,790 $ 16,337 $ 15,886 $ 15,948 $ 15,809 $ 15,695 $ 15,618 $ 15,277 $ 15,277 $ 15,279 $ 107 2,962 2010 — $ 19,767 $ 18,265 $ 17,715 $ 17,825 $ 17,736 $ 17,541 $ 17,320 $ 17,278 17,224 $ 275 2,914 2011 — — $ 18,790 $ 19,360 $ 19,629 $ 19,282 $ 18,644 $ 18,725 $ 18,666 18,606 $ 363 3,154 2012 — — — $ 22,940 $ 21,513 $ 21,048 $ 20,028 $ 19,972 $ 19,864 19,799 $ 441 3,454 2013 — — — — $ 23,809 $ 25,310 $ 26,758 $ 26,619 $ 26,260 26,033 $ 544 3,723 2014 — — — — — $ 28,248 $ 28,423 $ 29,000 $ 28,373 28,281 $ 942 4,433 2015 — — — — — — $ 36,423 $ 32,519 $ 28,746 27,548 $ 1,601 4,949 2016 — — — — — — — $ 37,601 $ 34,055 30,998 $ 2,528 5,326 2017 — — — — — — — — $ 42,725 38,594 $ 7,314 5,699 2018 — — — — — — — — — 43,654 $ 18,788 6,228 Total $ 266,016 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Accident Year Unaudited 2009 $ 5,000 $ 10,782 $ 13,202 $ 14,660 $ 14,881 $ 14,954 $ 15,147 $ 15,165 $ 15,166 $ 15,172 2010 — $ 6,503 $ 12,904 $ 15,087 $ 16,214 $ 16,757 $ 16,842 $ 16,810 $ 16,850 16,904 2011 — — $ 5,940 $ 14,045 $ 17,197 $ 17,869 $ 18,054 $ 18,177 $ 18,176 18,185 2012 — — — $ 7,808 $ 14,740 $ 17,728 $ 18,474 $ 19,208 $ 19,402 19,328 2013 — — — — $ 8,131 $ 19,054 $ 24,268 $ 25,209 $ 25,366 25,489 2014 — — — — — $ 9,933 $ 21,880 $ 26,173 $ 26,810 26,959 2015 — — — — — — $ 11,257 $ 21,706 $ 23,977 24,781 2016 — — — — — — — $ 10,980 $ 23,003 26,285 2017 — — — — — — — — $ 12,404 24,791 2018 — — — — — — — — — 12,517 Total 210,411 All outstanding liabilities before 2009, net of reinsurance 912 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 56,517 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Segregated Portfolio Cell Reinsurance - Workers' Compensation 34.5 % 38.5 % 14.3 % 4.6 % 1.7 % 0.6 % 0.2 % 0.1 % 0.2 % — % Syndicate 1729 Reserve Given the recent inception date for Syndicate 1729 (January 1, 2014) there is limited reliable historical claims data to use in establishing initial reserves for the exposures in the Lloyd's Syndicates segment. Consequently, ProAssurance estimates initial losses using the loss assumptions by risk category incorporated into the business plan submitted to Lloyd’s with consideration given to loss experience incurred to date. These assumptions are influenced by loss results in Lloyd's historical data for similar risks. In addition, Lloyd's market data for payment patterns is utilized to develop the payout patterns in the tables shown below. As the book of business matures and additional loss information becomes available, the actual loss experience of Syndicate 1729's book of business will be utilized to a greater extent. This will occur sooner for property coverages than for casualty coverages due to the shorter claim reporting and resolution time described above. Claim count information for assumed reinsurance coverage written by Syndicate 1729 is not meaningful in many instances. Certain reinsurance contracts provide aggregate coverage for loss events involving numerous underlying claims, resulting in a single claim count for reinsurance purposes, while other reinsurance contracts provide individual per-claim coverage. Still others may provide aggregate stop loss coverage based on the total losses or loss ratio of a class of business. As a result, claim count information is not included in the Syndicate 1729 Casualty and Syndicate 1729 Property Reinsurance tables shown below. Syndicate 1729 writes coverage in a variety of jurisdictions and currencies, although the majority of its business is in U.S. dollars. For purposes of th |
