Reserve For Losses And Loss Expenses | 6. Reserve for losses and loss expenses Activity in the reserve for losses and loss expenses for the years ended December 31, 2016 , 2015 and 2014 is summarized as follows: 2016 2015 2014 Gross reserve for losses and loss expenses, January 1 $ 4,510,415 $ 3,846,859 $ 4,002,259 Reinsurance recoverable on unpaid losses 907,944 670,795 593,755 Net reserve for losses and loss expenses, January 1 3,602,471 3,176,064 3,408,504 Incurred related to: Current year 1,542,602 1,160,572 1,203,977 Prior years (221,550 ) (243,464 ) (233,815 ) Total incurred 1,321,052 917,108 970,162 Paid related to: Current year (295,863 ) (265,898 ) (439,169 ) Prior years (890,027 ) (867,739 ) (719,043 ) Total paid (1,185,890 ) (1,133,637 ) (1,158,212 ) Amounts acquired (1) — 675,019 — Foreign currency translation and other (45,624 ) (32,083 ) (44,390 ) Net reserve for losses and loss expenses, December 31 3,692,009 3,602,471 3,176,064 Reinsurance recoverable on unpaid losses 1,213,129 907,944 670,795 Gross reserve for losses and loss expenses, December 31 $ 4,905,138 $ 4,510,415 $ 3,846,859 (1) Represents the fair value of Montpelier's reserve for losses and loss expenses and reinsurance recoverable acquired at July 31, 2015. During 2016 , the Company's estimated ultimate losses for prior accident years were reduced by $221.6 million ( 2015 - $243.5 million ; 2014 - $233.8 million ) due to lower claims emergence than originally estimated by the Company. During 2016 , the Company experienced favorable reserve development of $144.4 million across each line of business in the Reinsurance segment and $77.1 million of favorable development across each line of business in the Insurance segment. During 2015 , the Company experienced favorable development of $161.5 million across each line of business in the Reinsurance segment and $82.0 million of favorable development across each line of business in the Insurance segment. During 2014 , the Company experienced favorable development of $153.2 million across each line of business in the Reinsurance segment and $80.6 million of favorable development across each line of business in the Insurance segment. Reserves for losses and loss expenses are based in part upon the estimation of losses resulting from catastrophic events. Estimation of these losses and loss expenses are based upon the Company's historical claims experience and is inherently difficult because of the Company's short operating history and the possible severity of catastrophe claims. Therefore, the Company uses both proprietary and commercially available models, as well as historical reinsurance industry catastrophe claims experience in addition to its own historical data for purposes of evaluating trends and providing an estimate of ultimate claims costs. A significant portion of the Company's contracts and policies cover excess layers for high severity exposures. Underwriting results and ultimate claims payments for this type of coverage are therefore not typically reported to the Company until later in the contract and policy lives. As a result, the level of losses reported to date is not necessarily indicative of expected future results. 6. Reserve for losses and loss expenses, cont'd. The Company monitors the performance of its underwriting operations through review of discrete information related to its two reportable segments, Insurance and Reinsurance. Within each of these segments, the Company writes a variety of different types of insurance and reinsurance. For reporting purposes, management has combined its many business units, including within the Insurance segment - agriculture, casualty and other specialty, professional lines and property, marine/energy and aviation; and within the Reinsurance segment- catastrophe, property, casualty, professional lines and specialty. Management believes that the businesses combined within these business lines have similarities that make it appropriate to evaluate each as a group. The Company has included reserves acquired as part of its acquisition of Montpelier on a retrospective basis within its existing lines of business. In addition, the Company has restated all periods reflected in the various tables at the foreign exchange rates as of December 31, 2016. The Company incorporates a variety of actuarial methods and judgments in its reserving process. Two key inputs in the various actuarial methods employed by the Company are initial expected loss ratios and expected loss reporting patterns. These key inputs impact the potential variability in the estimate of the reserve for losses and loss expenses and are applicable to each of the Company's business segments. The Company's loss and loss expense reserves consider and reflect, in part, deviations resulting from differences between expected loss and actual loss reporting as well as judgments relating to the weights applied to the reserve levels indicated by the actuarial methods. Expected loss reporting patterns are based upon internal and external historical data and assumptions regarding claims reporting trends over a period of time that extends beyond the Company's own operating history. IBNR Reserves and Claims Frequency The Company establishes loss and loss expense reserves to provide for the estimated costs of paying claims under insurance policies and reinsurance contracts underwritten by the Company. These reserves include estimates for both claims that have been reported and those that have been incurred but not reported and include estimates of all expenses associated with processing and settling these claims. Estimating the ultimate cost of future claims and claim adjustment expenses is based on management judgment and thus, actual losses incurred may vary significantly from management's estimates. For insurance policies, the Company generally receives claims notices that are recorded by the claims staff within our underwriting, financial and claims systems. When we are notified of insured losses or discover potential losses as part of our claims audits, claims personnel record a case reserve as appropriate for the estimated amount of the exposure at that time. Reserves are also established to provide for the estimated expense of settling claims, including legal and other fees and the general expenses of administering the claims adjustment process. The Company counts an insurance claim when either an indemnity or allocated adjustment expense amount has been paid, or at any quarter end, the Company recorded a case reserve. The Company's Reinsurance segment and line of business include contracts written on a proportional or excess of loss basis. For proportional reinsurance business, the Company receives a bordereau indicating the Company's share of losses as well as other financial items. The Company does not have direct access to claims frequency information, and as such, the number of claims represented by the losses reported cannot be determined by the Company. The Company has determined that it is impracticable to provide claims frequency information related to its reinsurance contracts written on a proportional basis. The amount of IBNR related to proportional reinsurance contracts was $700.0 million at December 31, 2016. For Reinsurance contracts written on an excess of loss basis, the Company has developed claims frequency information. The Company determines claims frequency for excess of loss contracts when either a loss has been paid or at any quarter-end, the Company recorded a case reserve. Claims are counted by contract. 6. Reserve for losses and loss expenses, cont'd. The following tables show, by segment by line of business, the incurred losses and loss expenses and cumulative paid losses and loss expenses, net of reinsurance, as of December 31, 2016 . The following also includes the amount of IBNR reserves recorded as well as the cumulative number of reported claims for the Insurance segment lines of business and only excess of loss reinsurance contracts for the Reinsurance segment lines of business. Insurance Segment - Agriculture Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — — 2008 — 333,380 318,709 313,296 313,800 313,814 313,938 313,834 313,834 313,834 — 30,036 2009 — — 298,914 284,277 280,798 281,667 281,594 281,365 281,365 281,365 — 26,540 2010 — — — 305,131 280,330 280,409 280,166 280,008 280,008 280,008 — 18,331 2011 — — — — 520,388 509,531 508,424 507,930 507,847 507,847 — 37,061 2012 — — — — — 581,455 576,836 573,376 572,995 572,469 — 38,297 2013 — — — — — — 566,483 563,158 562,122 562,826 — 44,138 2014 — — — — — — — 451,710 451,843 449,705 — 53,886 2015 — — — — — — — — 241,501 227,634 — 39,508 2016 — — — — — — — — — 200,353 20,453 29,353 Total $ 3,396,041 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 2008 — 239,498 310,235 313,196 313,708 313,722 313,859 313,834 313,834 313,834 2009 — — 178,206 281,996 280,468 280,991 281,058 281,365 281,365 281,365 2010 — — — 144,296 279,397 279,768 279,859 280,008 280,008 280,008 2011 — — — — 461,335 506,905 507,790 507,918 507,847 507,847 2012 — — — — — 478,797 573,781 572,885 572,995 572,469 2013 — — — — — — 438,034 562,046 562,075 561,652 2014 — — — — — — — 352,202 448,046 449,705 2015 — — — — — — — — 122,696 222,212 2016 — — — — — — — — — 75,894 Total $ 3,264,986 Reserve for losses and loss expenses, net of reinsurance $ 131,055 6. Reserve for losses and loss expenses, cont'd. Insurance Segment - Casualty & Other Specialty Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 254,678 $ 251,840 $ 228,021 $ 232,156 $ 232,186 $ 235,482 $ 213,895 $ 197,246 $ 196,072 $ 191,927 $ 20,274 988 2008 — 285,334 296,079 333,844 366,479 363,094 347,477 339,927 328,153 312,759 35,706 1,602 2009 — — 198,689 240,235 237,368 237,101 234,983 230,594 218,900 206,077 24,553 2,509 2010 — — — 150,636 179,854 179,208 175,922 160,450 135,214 122,748 19,995 2,738 2011 — — — — 151,344 169,803 222,470 226,274 201,355 186,588 48,836 4,319 2012 — — — — — 164,568 182,924 187,141 183,644 179,929 73,724 6,268 2013 — — — — — — 153,377 165,853 205,041 230,081 81,540 6,790 2014 — — — — — — — 120,226 132,184 141,970 84,031 7,969 2015 — — — — — — — — 145,828 156,771 77,472 8,717 2016 — — — — — — — — — 165,558 137,608 5,305 Total $ 1,894,408 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 9,090 $ 38,777 $ 66,865 $ 103,283 $ 124,887 $ 139,923 $ 144,982 $ 152,297 $ 159,687 $ 163,236 2008 — 36,479 82,811 129,840 169,331 200,021 239,185 255,585 261,201 266,264 2009 — — 15,098 50,815 83,210 103,922 139,011 150,241 160,903 168,351 2010 — — — 863 4,279 27,379 64,917 83,634 88,737 96,785 2011 — — — — 3,279 14,468 30,074 54,598 91,817 97,285 2012 — — — — — 3,707 16,190 32,686 51,381 75,508 2013 — — — — — — 3,145 15,581 89,771 119,524 2014 — — — — — — — 3,389 18,914 36,446 2015 — — — — — — — — 18,426 49,196 2016 — — — — — — — — — 14,281 Total $ 1,086,876 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 30,599 Adjustment for unallocated claim expenses 43,666 Reserve for losses and loss expenses, net of reinsurance $ 881,797 6. Reserve for losses and loss expenses, cont'd. Insurance Segment - Professional Lines Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 52,739 $ 110,525 $ 150,972 $ 120,358 $ 119,243 $ 117,895 $ 113,520 $ 116,711 $ 125,496 $ 122,969 $ 47 232 2008 — 62,838 62,586 83,358 88,047 96,887 109,471 127,641 138,119 164,412 3,932 379 2009 — — 100,914 118,432 104,421 106,597 109,441 99,973 92,165 93,803 5,728 1,039 2010 — — — 108,369 105,611 101,591 92,931 82,421 74,856 69,387 9,860 1,594 2011 — — — — 102,012 98,353 99,466 79,988 98,989 105,619 15,265 1,232 2012 — — — — — 101,872 103,358 101,426 79,591 69,333 18,080 1,233 2013 — — — — — — 78,988 79,732 70,564 61,499 27,377 1,255 2014 — — — — — — — 64,437 66,524 57,446 29,232 2,599 2015 — — — — — — — — 74,823 72,559 58,966 3,464 2016 — — — — — — — — — 107,761 99,005 3,814 Total $ 924,788 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 83 $ 987 $ 1,744 $ 62,321 $ 90,128 $ 100,560 $ 100,693 $ 110,254 $ 120,328 $ 122,867 2008 — 54 1,898 14,027 15,888 16,613 48,997 72,576 98,770 113,175 2009 — — 1,045 8,755 32,193 38,000 56,126 73,072 77,628 80,201 2010 — — — 1,932 16,014 27,557 36,506 46,982 48,978 51,885 2011 — — — — 2,367 11,766 21,266 33,639 71,782 85,003 2012 — — — — — 2,582 13,185 22,237 29,854 35,678 2013 — — — — — — 2,193 13,807 21,289 26,783 2014 — — — — — — — 1,167 7,081 20,020 2015 — — — — — — — — 1,243 7,130 2016 — — — — — — — — — 2,324 Total $ 545,066 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 61 Adjustment for unallocated claim expenses 26,477 Reserve for losses and loss expenses, net of reinsurance $ 406,260 6. Reserve for losses and loss expenses, cont'd. Insurance Segment - Property, Marine/Energy & Aviation Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 45,128 $ 32,772 $ 25,714 $ 28,766 $ 29,071 $ 28,925 $ 33,206 $ 33,741 $ 34,083 $ 32,680 $ — 201 2008 — 113,427 104,626 84,425 74,111 84,093 80,158 78,176 78,178 77,373 13 459 2009 — — 60,589 48,196 23,651 21,225 19,933 19,423 19,780 19,341 33 568 2010 — — — 93,741 54,986 48,033 42,918 41,703 42,202 43,240 992 1,423 2011 — — — — 163,234 139,932 125,588 124,243 127,840 133,297 256 2,486 2012 — — — — — 172,535 137,329 123,134 121,281 121,873 405 2,704 2013 — — — — — — 115,600 101,878 85,794 80,971 3,933 3,145 2014 — — — — — — — 136,748 114,243 102,002 7,588 4,405 2015 — — — — — — — — 183,192 184,867 18,890 6,281 2016 — — — — — — — — — 234,235 72,271 6,600 Total $ 1,029,879 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 10,626 $ 19,644 $ 21,987 $ 22,614 $ 23,482 $ 23,780 $ 32,561 $ 33,546 $ 34,084 $ 32,671 2008 — 40,140 57,685 62,922 64,434 75,187 75,042 77,234 77,910 77,239 2009 — — 11,014 16,967 18,120 18,657 18,887 19,075 19,407 19,261 2010 — — — 11,680 29,150 33,938 36,306 38,880 40,782 41,802 2011 — — — — 17,871 63,710 82,967 103,301 117,337 123,496 2012 — — — — — 18,709 79,533 87,216 102,447 108,983 2013 — — — — — — 20,929 57,243 66,851 71,423 2014 — — — — — — — 26,491 60,418 79,321 2015 — — — — — — — — 52,121 131,697 2016 — — — — — — — — — 77,448 Total $ 763,341 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 3 Adjustment for unallocated claim expenses 7,855 Reserve for losses and loss expenses, net of reinsurance $ 274,396 6. Reserve for losses and loss expenses, cont'd. Reinsurance Segment - Catastrophe Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 168,640 $ 126,561 $ 104,527 $ 102,855 $ 91,502 $ 88,252 $ 86,273 $ 90,379 $ 97,851 $ 102,929 $ 153 192 2008 — 405,190 378,838 389,111 392,668 384,117 382,382 382,068 384,864 381,551 317 336 2009 — — 102,411 74,817 59,051 55,933 55,229 56,944 58,910 60,788 559 204 2010 — — — 272,094 234,576 226,060 226,208 231,531 237,677 224,323 1,394 265 2011 — — — — 622,350 591,965 589,614 603,680 612,274 624,448 4,640 574 2012 — — — — — 245,011 180,145 163,109 154,240 151,003 3,884 345 2013 — — — — — — 157,097 129,469 127,984 124,311 1,454 315 2014 — — — — — — — 141,173 126,822 126,512 3,156 229 2015 — — — — — — — — 60,465 47,255 4,057 224 2016 — — — — — — — — — 137,357 27,654 216 Total $ 1,980,477 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 31,590 $ 85,271 $ 87,267 $ 91,214 $ 83,511 $ 82,285 $ 80,852 $ 88,684 $ 97,279 $ 102,497 2008 — 154,382 255,721 316,023 353,658 375,455 378,322 380,366 382,431 380,409 2009 — — 26,869 45,763 48,440 49,847 51,013 54,189 57,551 59,865 2010 — — — 58,556 124,322 152,264 173,341 193,340 207,716 208,329 2011 — — — — 230,619 385,304 495,351 561,864 593,831 615,504 2012 — — — — — 56,614 105,745 126,802 134,288 136,862 2013 — — — — — — 34,236 83,259 106,983 116,996 2014 — — — — — — — 49,337 107,546 117,040 2015 — — — — — — — — 20,084 31,850 2016 — — — — — — — — — 43,793 Total $ 1,813,145 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 91 Adjustment for unallocated claim expenses 3,002 Reserve for losses and loss expenses, net of reinsurance $ 170,425 6. Reserve for losses and loss expenses, cont'd. Reinsurance Segment - Property Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 123,502 $ 137,474 $ 127,294 $ 120,598 $ 116,552 $ 115,947 $ 119,773 $ 121,653 $ 121,902 $ 117,706 $ 2 309 2008 — 173,437 151,764 133,022 123,162 124,861 126,887 126,991 125,622 122,943 3 612 2009 — — 151,371 123,151 116,114 114,137 114,342 115,111 115,213 111,782 114 991 2010 — — — 221,480 216,726 190,322 186,817 188,516 188,304 174,952 419 1,126 2011 — — — — 344,015 334,865 312,365 312,278 305,567 335,228 2,089 942 2012 — — — — — 314,924 259,753 240,928 240,070 244,651 2,224 813 2013 — — — — — — 255,632 239,844 217,661 199,195 5,650 1,017 2014 — — — — — — — 211,769 211,888 197,761 11,702 1,060 2015 — — — — — — — — 184,586 181,761 16,927 880 2016 — — — — — — — — — 166,629 55,289 542 Total $ 1,852,608 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 23,678 $ 71,828 $ 103,059 $ 111,825 $ 111,155 $ 112,559 $ 116,499 $ 119,203 $ 120,881 $ 116,680 2008 — 30,553 79,457 104,279 107,291 110,039 118,745 122,512 123,954 121,472 2009 — — 27,690 71,123 89,940 97,377 103,688 107,021 109,796 107,609 2010 — — — 49,442 117,260 141,348 163,173 175,919 180,555 170,367 2011 — — — — 76,880 172,679 254,657 286,065 291,961 326,570 2012 — — — — — 53,488 146,671 192,022 214,711 230,684 2013 — — — — — — 55,668 138,841 173,888 176,721 2014 — — — — — — — 51,635 134,663 158,766 2015 — — — — — — — — 37,685 100,328 2016 — — — — — — — — — 33,787 Total $ 1,542,984 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 4,954 Adjustment for unallocated claim expenses 4,301 Reserve for losses and loss expenses, net of reinsurance $ 318,879 6. Reserve for losses and loss expenses, cont'd. Reinsurance Segment - Casualty Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 108,468 $ 116,074 $ 116,095 $ 120,815 $ 115,024 $ 114,484 $ 112,945 $ 111,664 $ 110,369 $ 112,366 $ 13,382 549 2008 — 112,680 118,736 116,204 114,790 107,336 101,613 98,504 97,260 93,732 9,538 406 2009 — — 116,515 126,969 124,218 127,972 126,505 121,969 115,317 114,901 20,438 433 2010 — — — 186,667 179,891 176,073 170,938 172,699 160,142 159,409 27,794 506 2011 — — — — 198,159 199,035 197,138 204,187 195,094 196,946 35,929 604 2012 — — — — — 195,983 191,436 193,164 183,512 174,625 42,134 701 2013 — — — — — — 178,401 172,604 170,144 163,986 62,188 842 2014 — — — — — — — 125,515 120,521 119,143 45,271 615 2015 — — — — — — — — 119,276 119,529 58,182 250 2016 — — — — — — — — — 143,263 106,858 127 Total $ 1,397,900 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 3,009 $ 13,399 $ 23,890 $ 35,928 $ 48,519 $ 57,254 $ 64,711 $ 73,518 $ 77,378 $ 87,170 2008 — 8,475 17,338 30,528 43,923 51,831 58,419 67,856 72,592 75,906 2009 — — 7,367 21,841 34,770 51,576 61,615 70,558 76,463 83,892 2010 — — — 14,826 34,469 56,997 75,290 92,382 104,037 114,875 2011 — — — — 28,035 50,998 77,748 104,394 116,519 141,449 2012 — — — — — 30,667 54,457 75,456 92,072 105,209 2013 — — — — — — 18,577 35,808 56,564 71,677 2014 — — — — — — — 10,390 33,215 49,951 2015 — — — — — — — — 15,817 34,396 2016 — — — — — — — — — 18,837 Total $ 783,362 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 106,483 Adjustment for unallocated claim expenses 10,637 Reserve for losses and loss expenses, net of reinsurance $ 731,658 6. Reserve for losses and loss expenses, cont'd. Reinsurance Segment - Professional Lines Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 46,031 $ 51,283 $ 49,539 $ 43,988 $ 41,956 $ 41,037 $ 43,261 $ 42,115 $ 41,989 $ 37,980 $ 1,539 310 2008 — 41,797 50,276 47,154 44,672 47,084 44,526 42,863 41,599 39,059 1,171 262 2009 — — 41,430 43,003 41,681 40,763 35,771 36,560 36,474 38,720 2,098 204 2010 — — — 58,153 58,567 67,335 62,185 53,825 46,661 45,024 3,733 110 2011 — — — — 55,812 56,535 55,286 44,921 36,691 31,390 4,828 57 2012 — — — — — 43,519 42,443 43,426 36,707 30,576 5,803 81 2013 — — — — — — 48,933 49,513 45,382 41,403 21,619 48 2014 — — — — — — — 91,943 88,915 90,713 50,367 62 2015 — — — — — — — — 130,595 130,832 99,261 55 2016 — — — — — — — — — 148,671 139,857 10 Total $ 634,368 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 144 $ 2,310 $ 5,649 $ 10,694 $ 16,764 $ 21,259 $ 28,121 $ 30,796 $ 33,144 $ 32,771 2008 — 341 2,156 6,200 12,752 22,496 26,811 30,169 32,873 33,434 2009 — — 1,033 3,330 7,963 15,666 19,184 23,469 27,039 32,329 2010 — — — 2,249 7,348 14,481 24,511 31,313 36,100 36,181 2011 — — — — 1,685 4,943 9,405 15,168 20,124 22,142 2012 — — — — — 965 1,929 4,204 9,147 13,757 2013 — — — — — — 997 2,561 6,694 11,636 2014 — — — — — — — 1,149 6,446 22,822 2015 — — — — — — — — 2,941 14,357 2016 — — — — — — — — — 1,920 Total $ 221,349 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 5,540 Adjustment for unallocated claim expenses 6,164 Reserve for losses and loss expenses, net of reinsurance $ 424,723 6. Reserve for losses and loss expenses, cont'd. Reinsurance Segment - Specialty Incurred losses and loss expenses, net of reinsurance For the years ended December 31, At December 31, 2016 Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IBNR reserves Cumulative number of reported claims (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 229,505 $ 202,655 $ 197,905 $ 193,084 $ 189,577 $ 187,961 $ 187,949 $ 185,743 $ 183,044 $ 174,205 $ 435 288 2008 — 125,389 94,050 92,039 79,903 79,052 77,556 75,348 73,745 67,604 3,549 195 2009 — — 98,431 81,269 73,387 69,691 67,605 65,333 62,834 62,501 4,414 170 2010 — — — 123,741 107,630 97,718 86,949 85,252 84,817 82,937 1,856 218 2011 — — — — 111,517 100,639 86,832 82,514 82,984 82,014 2,565 274 2012 — — — — — 135,448 111,813 99,700 92,162 85,852 5,174 294 2013 — — — — — — 103,014 93,335 92,119 83,806 9,865 329 2014 — — — — — — — 120,335 116,642 108,392 19,693 342 2015 — — — — — — — — 150,288 149,473 35,118 318 2016 — — — — — — — — — 156,042 111,660 134 Total $ 1,052,826 Cumulative paid losses and loss expenses, net of reinsurance For the years ended December 31, Accident Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2007 $ 16,023 $ 123,632 $ 143,800 $ 153,622 $ 160,113 $ 169,797 $ 174,059 $ 175,948 $ 177,082 $ 169,673 2008 — 15,525 38,261 47,410 52,461 58,971 61,915 64,489 65,005 61,384 2009 — — 13,286 33,142 39,439 43,804 47,556 52,481 52,635 55,068 2010 — — — 15,110 48,043 57,822 64,199 68,915 72,072 74,797 2011 — — — — 22,755 44,494 61,019 68,869 73,730 75,760 2012 — — — — — 29,756 53,695 64,242 72,510 74,517 2013 — — — — — — 14,696 37,621 52,015 62,458 2014 — — — — — — — 23,579 49,847 66,813 2015 — — — — — — — — 18,994 70,659 2016 — — — — — — — — — 19,265 Total $ 730,394 Reserve for losses and loss expenses from accident year 2006 and prior, net of reinsurance 24,265 Adjustment for unallocated claim expenses 6,119 Reserve for losses and loss expenses, net of reinsurance $ 352,816 6. Reserve for losses and loss expenses, cont'd. Reconciliation of Claims Development Tables to Gross Reserve for Losses and Loss Expenses The following is a reconciliation of the net incurred and paid claims development tables to the reserve for losses and loss expenses in the consolidated balance sheet at December 31, 2016 . December 31, 2016 Net reserve for losses and loss expenses Reinsurance recoverable on unpaid losses Gross reserve for losses and loss expenses Insurance Agriculture $ 131,055 $ 116,832 $ 247,887 Casualty & other specialty 881,797 490,447 1,372,244 Professional lines 406,260 305,114 711,374 Property, marine/energy & aviation 274,396 193,088 467,484 Reinsurance Catastrophe 170,425 39,419 209,844 Property 318,879 1,466 320,345 Casualty 731,658 1,175 732,833 Professional lines 424,723 449 425,172 Specialty 352,816 65,139 417,955 Total $ 3,692,009 $ 1,213,129 $ 4,905,138 Historical Claims Duration The following is unaudited supplementary information about historical average claims duration by line of business. Average annual percentage payout of incurred claims by age, net of reinsurance (number of years) 1 2 3 4 5 6 7 8 9 10 Insurance Segment Agriculture 73.3 % 24.1 % 0.1 % 0.3 % — % — % — % — % — % — % Casualty & other specialty 5.5 % 11.3 % 15.5 % 15.1 % 12.8 % 7.1 % 4.5 % 2.7 % 3.7 % 1.4 % Professional lines 1.5 % 7.8 % 11.0 % 14.3 % 15.0 % 14.4 % 10.3 % 8.9 % 8.3 % 7.2 % Property, marine/energy & aviation 24.4 % 39.3 % 18.0 % 9.9 % 4.3 % 2.1 % 3.2 % 0.4 % 1.1 % 0.2 % Reinsurance Segment Catastrophe 32.4 % 36.1 % 15.4 % 7.6 % 3.4 % 1.7 % 0.2 % 0.3 % 1.3 % 1.0 % Property 24.1 % 39.4 % 19.5 % 6.5 % 3.5 % 2.7 % 0.5 % 0.9 % 0.9 % 0.3 % Casualty 9.2 % 12.6 % 12.7 % 11.9 % 9.9 % 8.2 % 6.3 % 5.5 % 4.4 % 3.2 % Professional lines 1.9 % 6.7 % 12.1 % 18.5 % 16.9 % 12.2 % 8.2 % 6.4 % 4.3 % 3.3 % Specialty 13.9 % 37.7 % 20.6 % 7.0 % 7.6 % 4.6 % 2.2 % 3.1 % 0.6 % — % |