| Reserves For Losses And Loss Expenses | Reserves for Losses and Loss Expenses The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported liabilities (IBNR). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss reserve development on reported claims. Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit. The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations. Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags. The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. A claim may be defined as an event, as a claimant (number of parties claiming damages from an event) or by exposure type (e.g., an event may give rise to two parties, each claiming loss for bodily injury and property damage). The most commonly used claim count method is by event. Most of the Company's operating units use the number of events to define and quantify the number of claims. However, in certain lines of business, where it is common for multiple parties to claim damages arising from a single event, an operating unit may quantify claims on the basis of the number of separate parties involved in an event. This may be the case with businesses writing substantial automobile or transportation exposure. Claim counts for assumed reinsurance will vary based on whether the business is written on a facultative or treaty basis. Further variability as respects treaty claim counts may be reflective of the nature of the treaty, line of business coverage, and type of participation such as quota share or excess of loss contracts. Accordingly, the claim counts have been excluded from the below Reinsurance segment tables due to this variability. The claim count information set forth in the tables presented below may not provide an accurate reflection of ultimate loss payouts by product line. The following tables present undiscounted incurred and paid claims development as of December 31, 2018, net of reinsurance, as well as cumulative claim frequency and the total of incurred but not reported liabilities (IBNR). The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as supplementary information. To enhance the comparability of the loss development data, the Company has removed the impact of foreign exchange rate movements by using the December 31, 2018 exchange rate for all periods. Beginning with accident year 2012, the Company's U.K. and European insurance business is included in the Insurance segment's tables for Other Liability, Professional Liability, Commercial Automobile and Short-Tail Lines. Prior to 2012, the actuarial analysis for its U.K. and European insurance business was performed on an underwriting year basis and accident year data is not available for those years. Insurance Other Liability (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 689,634 $ 656,788 $ 624,991 $ 599,235 $ 589,659 $ 561,784 $ 557,661 $ 553,058 $ 546,746 $ 542,568 $ 18,690 23 2010 — 612,210 615,797 592,117 590,818 577,679 574,780 573,532 571,305 566,695 26,658 23 2011 — — 665,035 673,730 660,023 659,026 653,864 649,055 645,123 634,264 30,381 24 2012 — — — 693,447 702,342 703,118 709,026 713,266 723,610 718,166 47,001 24 2013 — — — — 751,544 792,464 784,906 784,342 805,288 811,592 78,784 26 2014 — — — — — 847,207 848,947 847,008 851,503 864,157 128,856 26 2015 — — — — — — 951,041 986,792 961,289 964,415 217,570 26 2016 — — — — — — — 1,018,454 1,011,368 1,019,749 375,609 25 2017 — — — — — — — — 1,067,376 1,100,243 567,982 23 2018 — — — — — — — — — 1,104,518 837,548 18 Total $ 8,326,367 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 44,801 $ 122,850 $ 214,498 $ 311,979 $ 385,068 $ 429,128 $ 470,830 $ 486,893 $ 500,953 $ 510,474 2010 — 45,193 128,946 248,698 336,243 417,166 461,442 491,104 508,359 525,016 2011 — — 48,825 142,713 266,780 379,845 470,849 524,314 556,110 575,194 2012 — — — 58,108 158,869 299,842 417,686 513,644 580,750 622,687 2013 — — — — 63,868 189,936 332,871 473,933 589,564 650,428 2014 — — — — — 79,078 191,394 338,961 481,039 595,024 2015 — — — — — — 82,829 210,940 382,498 538,502 2016 — — — — — — — 69,620 209,212 390,552 2017 — — — — — — — — 80,174 256,448 2018 — — — — — — — — — 87,075 Total $ 4,751,400 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 121,405 Reserves for loss and loss adjustment expenses, net of reinsurance $ 3,696,372 Primary Workers' Compensation (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 327,537 $ 332,303 $ 326,766 $ 386,870 $ 392,158 $ 394,303 $ 392,287 $ 395,288 $ 398,994 $ 401,431 $ 10,693 43 2010 — 358,734 361,808 409,237 418,315 426,622 429,952 429,762 427,698 424,374 13,958 45 2011 — — 419,364 442,550 454,797 470,026 472,087 474,076 475,729 471,471 17,942 46 2012 — — — 499,752 499,882 503,956 503,863 509,167 512,707 508,169 26,626 48 2013 — — — — 551,342 547,295 546,995 543,238 547,000 542,274 35,177 53 2014 — — — — — 639,436 637,307 627,767 617,242 615,435 57,455 57 2015 — — — — — — 712,800 690,525 650,997 641,169 83,941 58 2016 — — — — — — — 702,716 696,339 684,700 117,425 57 2017 — — — — — — — — 762,093 733,505 191,034 57 2018 — — — — — — — — — 778,964 359,337 53 Total $ 5,801,492 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 93,647 $ 197,736 $ 257,972 $ 297,079 $ 317,796 $ 333,793 $ 344,771 $ 352,516 $ 360,289 $ 364,712 2010 — 107,742 214,034 279,226 317,986 344,631 362,078 374,013 382,665 388,405 2011 — — 106,157 234,694 307,873 355,909 385,759 408,304 420,945 428,811 2012 — — — 114,998 253,781 339,560 387,368 419,588 437,196 451,991 2013 — — — — 117,502 277,538 363,028 414,160 447,894 466,580 2014 — — — — — 148,405 319,743 412,611 471,235 503,915 2015 — — — — — — 139,320 323,744 421,734 477,541 2016 — — — — — — — 142,998 338,835 446,072 2017 — — — — — — — — 153,456 362,299 2018 — — — — — — — — — 171,006 Total $ 4,061,332 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 170,897 Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,911,057 Excess Workers' Compensation (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 168,762 $ 153,766 $ 153,912 $ 148,223 $ 148,189 $ 138,765 $ 142,768 $ 134,716 $ 129,249 $ 130,790 $ 21,734 1 2010 — 135,639 123,497 120,272 118,712 100,331 104,732 100,065 94,986 95,374 14,497 1 2011 — — 88,650 93,993 98,051 87,064 85,299 83,850 78,246 74,109 17,280 1 2012 — — — 72,366 73,230 71,780 73,653 72,441 67,878 69,361 16,293 1 2013 — — — — 63,995 48,493 46,025 42,419 38,551 35,120 16,473 1 2014 — — — — — 63,465 57,558 49,478 45,758 41,671 18,448 1 2015 — — — — — — 69,977 57,897 50,099 45,115 25,425 — 2016 — — — — — — — 72,657 70,281 71,404 37,500 — 2017 — — — — — — — — 76,701 80,508 42,652 1 2018 — — — — — — — — — 77,820 46,840 1 Total $ 721,272 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 5,060 $ 8,402 $ 11,037 $ 14,138 $ 20,729 $ 25,272 $ 29,150 $ 33,573 $ 37,817 $ 41,243 2010 — 2,867 4,003 5,571 8,701 9,084 11,699 14,261 18,821 22,355 2011 — — 2,593 4,848 6,395 12,104 15,684 18,638 20,164 21,463 2012 — — — 1,127 6,097 9,480 11,167 13,234 15,738 17,982 2013 — — — — 647 630 2,158 3,008 3,396 4,418 2014 — — — — — 358 1,729 3,354 4,175 5,808 2015 — — — — — — 2,069 2,481 3,272 4,099 2016 — — — — — — — 2,498 4,783 5,573 2017 — — — — — — — — 6,282 12,810 2018 — — — — — — — — — 6,141 Total $ 141,892 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 740,877 Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,320,257 Professional Liability (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 134,784 $ 139,091 $ 145,515 $ 148,899 $ 147,994 $ 150,452 $ 150,783 $ 153,492 $ 152,711 $ 157,451 $ 1,087 3 2010 — 147,649 165,755 179,383 177,957 176,723 172,585 174,883 177,844 182,818 1,807 4 2011 — — 179,875 165,233 186,918 190,096 177,128 173,545 176,865 175,963 3,185 4 2012 — — — 238,233 241,944 264,808 250,457 238,704 245,076 243,893 9,507 7 2013 — — — — 269,280 247,320 242,792 248,974 270,449 279,092 15,395 7 2014 — — — — — 253,284 246,668 259,964 243,936 239,555 19,315 8 2015 — — — — — — 259,569 258,251 274,950 276,406 47,934 9 2016 — — — — — — — 310,678 324,979 361,929 90,872 10 2017 — — — — — — — — 333,803 333,194 178,091 9 2018 — — — — — — — — — 335,751 260,095 9 Total $ 2,586,052 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 12,604 $ 52,583 $ 85,902 $ 117,683 $ 127,728 $ 138,876 $ 143,950 $ 144,713 $ 147,599 $ 151,499 2010 — 14,832 58,916 108,566 129,757 144,474 160,598 165,018 171,330 178,879 2011 — — 18,779 62,442 103,097 134,608 150,840 159,014 167,286 168,874 2012 — — — 21,875 87,008 128,281 159,183 190,295 214,315 223,424 2013 — — — — 24,232 64,030 119,552 177,343 206,655 248,520 2014 — — — — — 19,545 83,856 138,753 176,181 199,245 2015 — — — — — — 20,478 85,561 139,952 187,767 2016 — — — — — — — 28,702 102,853 202,131 2017 — — — — — — — — 36,733 96,814 2018 — — — — — — — — — 28,307 Total $ 1,685,460 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 4,198 Reserves for loss and loss adjustment expenses, net of reinsurance $ 904,790 Commercial Automobile (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 362,302 $ 345,139 $ 340,967 $ 335,851 $ 337,915 $ 336,855 $ 334,652 $ 335,089 $ 334,977 $ 334,926 $ 398 39 2010 — 310,591 320,098 330,190 328,854 332,716 331,581 330,552 330,263 329,942 372 37 2011 — — 312,224 320,898 328,269 331,694 341,362 341,162 342,052 343,524 1,232 37 2012 — — — 314,073 326,585 342,379 355,433 364,175 364,437 366,662 1,539 40 2013 — — — — 326,789 348,513 368,318 376,569 366,976 366,565 3,013 42 2014 — — — — — 363,308 384,692 418,215 416,194 413,697 6,431 45 2015 — — — — — — 389,101 417,403 423,601 431,857 18,247 50 2016 — — — — — — — 431,633 431,680 443,030 35,867 49 2017 — — — — — — — — 430,352 428,601 70,289 44 2018 — — — — — — — — — 442,862 145,744 39 Total $ 3,901,666 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 136,433 $ 209,553 $ 257,326 $ 291,925 $ 312,902 $ 328,843 $ 331,482 $ 333,143 $ 333,605 $ 333,677 2010 — 136,029 208,790 263,639 295,347 313,253 324,963 326,770 327,206 327,829 2011 — — 135,350 211,756 262,659 296,332 321,786 333,949 338,283 340,319 2012 — — — 136,844 215,078 273,277 312,178 344,428 355,740 360,799 2013 — — — — 142,480 218,005 266,694 322,141 343,274 353,159 2014 — — — — — 155,065 237,118 328,156 365,424 394,147 2015 — — — — — — 159,679 265,396 325,369 370,450 2016 — — — — — — — 185,045 280,146 342,214 2017 — — — — — — — — 180,627 267,469 2018 — — — — — — — — — 180,213 Total $ 3,270,276 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 2,482 Reserves for loss and loss adjustment expenses, net of reinsurance $ 633,872 Short-tail lines (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR Cumulative Number of Reported Claims 2009 $ 346,870 $ 335,921 $ 326,440 $ 318,111 $ 318,349 $ 314,290 $ 314,117 $ 314,010 $ 316,220 $ 317,098 $ 550 18 2010 — 385,541 370,291 358,373 355,916 346,226 346,719 346,885 346,463 346,172 833 19 2011 — — 478,556 471,555 463,006 459,814 457,011 450,115 449,320 451,211 1,093 21 2012 — — — 526,312 535,500 535,885 531,729 507,646 506,705 508,565 3,083 25 2013 — — — — 572,103 583,603 575,582 553,621 552,137 548,730 5,740 26 2014 — — — — — 701,335 709,832 664,303 663,282 664,350 6,562 30 2015 — — — — — — 743,872 731,468 727,677 726,606 15,079 32 2016 — — — — — — — 771,416 774,514 761,891 20,857 34 2017 — — — — — — — — 750,786 752,193 34,275 38 2018 — — — — — — — — — 759,340 161,107 36 Total $ 5,836,156 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 212,521 $ 291,338 $ 304,634 $ 306,020 $ 309,916 $ 310,428 $ 311,079 $ 311,357 $ 311,655 $ 315,966 2010 — 245,036 325,156 337,686 346,768 340,210 342,918 344,102 345,085 345,106 2011 — — 303,012 417,701 436,585 440,777 445,073 446,745 447,342 450,155 2012 — — — 281,456 453,157 503,364 513,733 498,506 499,446 503,738 2013 — — — — 312,945 486,692 534,939 531,386 538,158 539,443 2014 — — — — — 371,194 596,829 613,621 633,020 648,373 2015 — — — — — — 396,086 612,335 667,846 689,875 2016 — — — — — — — 416,144 669,029 710,618 2017 — — — — — — — — 444,407 688,821 2018 — — — — — — — — — 415,206 Total $ 5,307,301 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 2,362 Reserves for loss and loss adjustment expenses, net of reinsurance $ 531,217 Reinsurance Casualty (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR 2009 $ 334,804 $ 328,321 $ 327,236 $ 309,228 $ 301,495 $ 293,275 $ 282,411 $ 288,115 $ 281,592 $ 279,372 $ 17,086 2010 — 290,285 298,300 288,141 276,234 265,771 254,550 251,308 249,062 248,145 18,428 2011 — — 290,635 309,621 304,409 299,628 306,911 303,867 295,576 292,162 21,264 2012 — — — 331,603 335,661 331,006 324,014 332,932 335,636 333,889 25,536 2013 — — — — 319,159 270,221 273,528 283,580 292,447 298,061 33,269 2014 — — — — — 320,250 320,176 319,855 331,836 326,251 49,301 2015 — — — — — — 259,609 232,203 231,020 253,264 30,511 2016 — — — — — — — 241,282 253,450 246,235 62,140 2017 — — — — — — — — 231,826 221,820 122,752 2018 — — — — — — — — — 221,945 184,317 Total $ 2,721,144 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 21,332 $ 53,636 $ 85,761 $ 124,030 $ 155,124 $ 181,946 $ 196,775 $ 211,143 $ 221,141 $ 228,990 2010 — 17,964 45,626 77,191 106,381 129,041 149,322 165,027 180,544 190,295 2011 — — 17,876 52,365 97,702 134,285 168,244 191,864 207,692 220,011 2012 — — — 22,390 62,198 111,928 151,635 186,483 219,106 240,926 2013 — — — — 28,920 63,849 109,202 143,268 177,101 204,820 2014 — — — — — 21,306 69,134 116,266 155,764 198,993 2015 — — — — — — 17,865 48,593 91,548 141,834 2016 — — — — — — — 19,923 61,930 100,587 2017 — — — — — — — — 16,493 40,338 2018 — — — — — — — — — 11,152 Total $ 1,577,946 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 369,801 Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,512,999 Property (In thousands) Loss and Loss Expenses Incurred, Net of Reinsurance As of December 31, 2018 For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IBNR 2009 $ 48,029 $ 43,193 $ 42,352 $ 38,711 $ 38,124 $ 37,505 $ 36,913 $ 36,263 $ 35,293 $ 35,763 $ — 2010 — 58,576 55,647 52,561 51,448 51,500 50,971 50,871 50,699 50,932 201 2011 — — 95,217 87,970 85,118 86,544 85,006 84,739 84,471 84,882 314 2012 — — — 103,744 94,720 86,426 85,451 83,925 83,938 84,875 626 2013 — — — — 141,298 112,590 114,063 111,915 112,555 111,876 1,192 2014 — — — — — 112,987 96,668 97,363 100,148 99,410 1,739 2015 — — — — — — 127,039 117,582 131,777 130,452 4,367 2016 — — — — — — — 167,989 174,562 181,858 11,130 2017 — — — — — — — — 206,604 200,535 24,102 2018 — — — — — — — — — 108,281 40,135 Total $ 1,088,864 Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance For the Year Ended December 31, Unaudited Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 9,766 $ 21,945 $ 28,226 $ 29,444 $ 31,248 $ 31,238 $ 32,540 $ 34,759 $ 34,027 $ 35,158 2010 — 23,654 37,739 42,413 43,898 44,824 46,419 49,048 49,303 50,053 2011 — — 31,478 58,875 73,359 76,010 78,577 81,780 82,322 83,401 2012 — — — 15,675 51,774 64,238 70,672 77,540 79,099 81,808 2013 — — — — 36,609 74,602 92,646 101,553 104,333 106,051 2014 — — — — — 38,919 67,000 82,329 88,507 91,646 2015 — — — — — — 53,498 89,228 109,187 118,686 2016 — — — — — — — 78,969 133,653 157,622 2017 — — — — — — — — 72,157 141,458 2018 — — — — — — — — — 34,125 Total $ 900,008 Reserves for loss and loss adjustment expenses before 2009, net of reinsurance 776 Reserves for loss and loss adjustment expenses, net of reinsurance $ 189,632 The reconciliation of the net incurred and paid claims development tables to the reserves for loss and loss adjustment expenses in the consolidated balance sheet is as follows: (In thousands) December 31, 2018 Undiscounted reserves for loss and loss expenses, net of reinsurance: Other liability $ 3,696,372 Primary workers' compensation 1,911,057 Excess workers' compensation 1,320,257 Professional liability 904,790 Commercial automobile 633,872 Short-tail lines 531,217 Other 111,779 Insurance 9,109,344 Casualty 1,512,999 Property 189,632 Reinsurance 1,702,631 Total undiscounted reserves for loss and loss expenses, net of reinsurance $ 10,811,975 (In thousands) December 31, 2018 Due from reinsurers on unpaid claims: Other liability $ 451,073 Primary workers' compensation 374,805 Excess workers' compensation 37,405 Professional liability 344,958 Commercial automobile 15,405 Short-tail lines 293,376 Other 34,260 Insurance 1,551,282 Casualty 116,782 Property 49,501 Reinsurance 166,283 Total due from reinsurers on unpaid claims $ 1,717,565 (In thousands) December 31, 2018 Loss reserve discount: Other liability $ — Primary workers' compensation — Excess workers' compensation (434,302 ) Professional liability — Commercial automobile — Short-tail lines — Other — Insurance (434,302 ) Casualty (128,790 ) Property — Reinsurance (128,790 ) Total loss reserve discount $ (563,092 ) Total gross reserves for loss and loss expenses $ 11,966,448 The following is supplementary information regarding average historical claims duration as of December 31, 2018 : Insurance Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Other liability 8.0 % 14.4 % 18.4 % 16.8 % 13.8 % 8.2 % 5.9 % 3.0 % 2.8 % 1.8 % Primary workers' compensation 22.5 % 27.6 % 15.6 % 9.4 % 5.9 % 4.0 % 2.8 % 1.9 % 1.6 % 1.1 % Excess workers' compensation 3.8 % 3.3 % 2.7 % 3.1 % 3.0 % 3.3 % 2.7 % 3.3 % 3.5 % 2.6 % Professional liability 8.7 % 22.7 % 22.3 % 16.6 % 9.4 % 9.1 % 3.5 % 1.6 % 4.3 % 2.5 % Commercial automobile 39.7 % 21.6 % 15.6 % 10.7 % 6.8 % 3.5 % 1.0 % 0.4 % 0.2 % — % Short-tail lines 59.6 % 29.8 % 5.8 % 1.6 % 0.1 % 0.3 % 0.4 % 0.3 % — % 1.4 % Reinsurance Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Casualty 7.2 % 12.5 % 14.6 % 13.3 % 11.2 % 9.0 % 5.9 % 5.2 % 3.8 % 2.8 % Property 35.3 % 32.3 % 14.8 % 5.5 % 3.9 % 2.0 % 3.2 % 2.7 % — % 3.2 % The table below provides a reconciliation of the beginning and ending reserve balances: (In thousands) 2018 2017 2016 Net reserves at beginning of year $ 10,056,914 $ 9,590,265 $ 9,244,872 Net provision for losses and loss expenses: Claims occurring during the current year (1) 3,926,489 3,963,543 3,826,620 Increase (decrease) in estimates for claims occurring in prior years (2) 6,831 (5,165 ) (29,904 ) Loss reserve discount accretion 41,382 43,970 49,084 Total 3,974,702 4,002,348 3,845,800 Net payments for claims: Current year 964,808 1,027,405 1,052,452 Prior year 2,700,077 2,562,550 2,401,722 Total 3,664,885 3,589,955 3,454,174 Foreign currency translation (117,848 ) 54,256 (46,233 ) Net reserves at end of year 10,248,883 10,056,914 9,590,265 Ceded reserve at end of year 1,717,565 1,613,494 1,606,930 Gross reserves at end of year $ 11,966,448 $ 11,670,408 $ 11,197,195 _______________________________________ (1) Claims occurring during the current year are net of loss reserve discounts of $24,381,000 , $22,064,000 and $18,929,000 in 2018 , 2017 , and 2016 , respectively. (2) The increase (decrease) in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $3,738,000 , $32,132,000 and $59,175,000 in 2018 , 2017 and 2016 , respectively. Favorable prior year development (net of additional and return premiums) was $39 million in 2018 . Insurance - Reserves for the Insurance segment developed favorably by $43 million in 2018. The favorable development was primarily attributable to workers' compensation business, partially offset by unfavorable development for professional liability business. For workers' compensation, the favorable development was spread across many accident years, including prior to 2009, but was most significant in accident years 2015 through 2017. The favorable workers' compensation development reflects a continuation during 2018 of the benign loss cost trends experienced during recent years, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The long term trend of declining workers' compensation frequency can be attributable to improved workplace safety. Loss severity trends were also aided by our continued investment in claims handling initiatives such as medical case management services and vendor savings through usage of preferred provider networks. Reported workers' compensation losses in 2018 continued to be better than our expectations at most of our operating units, and were below the assumptions underlying our previous reserve estimates. For professional liability business, adverse development was primarily related to unexpected large directors and officers (“D&O”) liability losses at one of our U.S. operating units, as well as lawyers professional liability losses at another operating unit. The adverse development stemmed primarily from accident years 2015 and 2016, and was driven by a higher frequency of large losses than we had experienced in previous years. Reinsurance - Reserves for the Reinsurance segment developed unfavorably by $4 million in 2018. The unfavorable development was primarily due to U.S. casualty facultative business from accident years 2009 and prior related to construction projects, and was largely offset by favorable development on assumed excess of loss workers compensation business. Favorable prior year development (net of additional and return premiums) was $ 37 million in 2017 . Insurance - Reserves for the Insurance segment developed favorably by $ 68 million in 2017 . The favorable development was primarily attributable to workers' compensation business, and was partially offset by unfavorable development for professional liability business. For workers' compensation, the favorable development was related to both primary and excess business and was spread across many accident years, including those prior to 2008, but was most significant in accident years 2014 through 2016. The favorable workers' compensation development reflects a continuation during 2017 of the generally benign loss cost trends experienced in recent years, particularly the favorable claim frequency trends (i.e. number of reported claims per unit of exposure). Reported workers' compensation losses in 2017 continued to be better than our expectations at most of our operating units, and were below the assumptions underlying our previous reserve estimates. The favorable severity trends were also impacted by our continued investment in medical case management services and the higher usage of preferred provider networks. The long term trend of declining workers' compensation frequency can be attributed to improved workplace safety. For professional liability business, adverse development was primarily related to unexpected large D&O liability losses at one of our U.S. operating units, and large professional indemnity and D&O losses in the U.K. The adverse development stemmed mainly from accident years 2013 through 2016 in the U.S. and 2011 through 2016 in the U.K. Reinsurance - Reserves for the Reinsurance segment developed unfavorably by $ 31 million in 2017 . This adverse development was due to reserve strengthening associated with claims impacted by the change in the Ogden discount rate in the U.K., as well as adverse development on the U.S. facultative casualty excess of loss business. The Ogden rate is the discount rate used to calculate lump-sum bodily injury payouts in the U.K., and was reduced by the U.K. Ministry of Justice from + 2.5% to -0.75% in 2017 ; the adverse development mostly related to U.K. motor bodily injury claims which we reinsured on an excess of loss basis in accident years 2012 through 2016. The adverse development on U.S. facultative casualty business was due to construction related risks in accident years 2008 and prior. Favorable prior year development (net of additional and return premiums) was $59 million in 2016. Insurance - Reserves for the Insurance segment developed favorably by $53 million in 2016 . The favorable development was primarily related to workers' compensation business, and was partially offset by unfavorable development for medical professional liability business. For workers' compensation, the favorable development was related to both primary and excess business and to many accident years, including those prior to 2007. During 2016 , reported workers' compensation losses continued to be better than our expectations at most of our operating units. Loss frequency and severity trends continued to be better than the assumptions underlying our previous reserve estimates. Loss severity trends also benefited from our continued investment in medical case management services and from our preferred provider networks. The long term trend of declining workers' compensation frequency can be attributed to improved workplace safety. For medical professional liability business, unfavorable development was primarily related to a class of business that has been discontinued. The adverse development for that business stemmed main |
