Reserves for Losses and LAE | NOTE 5. RESERVES FOR LOSSES AND LAE We establish reserves for the estimated unpaid ultimate liability for losses and LAE under the terms of our policies and agreements. The determination of reserves for losses and LAE is partially dependent upon the receipt of information from agents and brokers. Reserves include estimates for both claims that have been reported and for IBNR, and include estimates of expenses associated with processing and settling these claims. Reserves are recorded in Reserves for Losses and LAE in the Consolidated Balance Sheets. Our estimates and judgments may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed, or as laws change. Frequency/severity analyses are also performed for certain books of business. To the extent that reserves are found deficient or redundant, a strengthening or release is recognized as a charge or credit to earnings. The following table summarizes activity for our Company’s Reserves for Losses and LAE for the years ended December 31, 2017, 2016 and 2015: Years Ended December 31, amounts in thousands 2017 2016 2015 Net Reserves for Losses and LAE at Beginning of Year $ 1,510,451 $ 1,393,126 $ 1,308,136 Provision for Losses and LAE for Claims Occurring in the Current Year 771,955 693,976 637,267 Increase (Decrease) in Estimated Losses and LAE for Claims Occurring in Prior Years 34,310 (28,528 ) (64,669 ) Incurred Losses and LAE $ 806,265 $ 665,448 $ 572,598 Losses and LAE Paid for Claims Occurring During: Current Year (144,095 ) (119,485 ) (159,802 ) Prior Years (478,979 ) (412,544 ) (320,863 ) Losses and LAE Payments $ (623,074 ) $ (532,029 ) $ (480,665 ) Foreign Currency Adjustment 11,738 (16,094 ) (6,943 ) Net Reserves for Losses and LAE at End of Period 1,705,380 1,510,451 1,393,126 Reinsurance Recoverables on Unpaid Losses and LAE 809,765 779,276 809,518 Gross Reserves for Losses and LAE at End of Period $ 2,515,145 $ 2,289,727 $ 2,202,644 The reporting and operating segments breakdowns of prior period net reserve strengthening (releases) for the years ended December 31, 2017, 2016 and 2015 are as follows: Years Ended December 31, amounts in thousands 2017 2016 2015 U.S. Insurance Marine $ 1,696 $ (10,122 ) $ (24,825 ) P&C 1,613 2,790 (706 ) Professional Liability 13,405 5,984 (3,788 ) Total $ 16,714 $ (1,348 ) $ (29,319 ) Int'l Insurance Marine $ 6,518 $ (22,068 ) $ (21,914 ) P&C 3,118 (7,051 ) (8,458 ) Professional Liability 5,198 4,100 4,156 Total $ 14,834 $ (25,019 ) $ (26,216 ) GlobalRe $ 2,762 $ (2,161 ) $ (9,134 ) Total Strengthening (Releases) $ 34,310 $ (28,528 ) $ (64,669 ) For the year ended December 31, 2017, our Incurred Losses and LAE increased $140.8 million as compared to the same period in 2016. The Provision for Losses and LAE for Claims Occurring in the Current Year increased primarily due to additional net current accident year (“AY”) loss activity related to a higher level of catastrophe (“CAT”) losses incurred during the year ended December 31, 2017, including Hurricanes Irma ($28.3 million), Maria ($23.4 million) and Harvey ($15.8 million), Typhoon Hato ($4.2 million) the Puebla Mexican Earthquake ($3.5 million), and $9.6 million of other CAT events, as compared to the same period in 2016, which included Alberta Wildfires ($11.7 million), Hurricane Matthew ($7.1 million), Ecuador Earthquake ($3.8 million) and Taiwan Earthquake ($3.3 million). Additionally, growth in Net Earned Premium over the prior year added to the increase in Provision for Losses and LAE for Claims Occurring in the Current Year. The following is a discussion of CAT losses incurred of $84.8 million for the year ended December 31, 2017: • Our U.S. Insurance reporting segment incurred $8.2 million of CAT losses, including $6.6 million and $1.6 million in our P&C and Marine operating segments, respectively, primarily due to Hurricanes Harvey, Irma and Maria. • Our Int’l Insurance reporting segment incurred $32.9 million of CAT losses, including $16.9 million and $16.0 million within our P&C and Marine operating segments, primarily due to Hurricanes Irma, Maria and Harvey, Typhoon Hato, and to a lesser extent, the California Wildfires and Puebla Mexican Earthquake. • Our GlobalRe reporting segment incurred $43.7 million of CAT losses primarily due to Hurricanes Irma, Maria and Harvey, and the Puebla Mexican Earthquake. For the year ended December 31, 2016, our Incurred Losses and LAE increased $92.9 million as compared to the same period in 2015. The Provision for Losses and LAE for Claims Occurring in the Current Year increased primarily due to additional net current AY loss activity related to higher level of catastrophe losses during the year ended December 31, 2016, including the Alberta Wildfires, ($11.7 million), Hurricane Matthew ($7.1 million), Ecuador Earthquake ($3.8 million) and Taiwan Earthquake ($3.3 million), as compared to the same period in 2015 which was impacted by large loss activity. The following is a discussion of CAT losses incurred of $26.8 million for the year ended December 31, 2016: • Our Int’l Insurance reporting segment incurred $17.4 million of CAT losses, primarily due to Hurricane Matthew and the Alberta Wildfires. • Our GlobalRe reporting segment incurred $9.4 million of CAT losses, primarily due to the Alberta Wildfires and the Ecuador Earthquake. Our December 31, 2017 Net Reserves for Losses and LAE include $18.5 million of net incurred but not reported (“IBNR”) claims activities for numerous catastrophe events. We caution that the magnitude and complexity of losses arising from these events inherently increases the level of uncertainty and therefore the level of management judgement involved in arriving at our estimated Net Reserves for Losses and LAE. As a result, our actual losses for these events may ultimately differ materially from our current estimates. The following is a discussion of the relevant factors related to the prior period net reserve strengthening of $34.3 million recorded for the year ended December 31, 2017: Our U.S. Insurance reporting segment recorded prior period net reserve strengthening of $16.7 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve strengthening of $1.7 million driven by large loss activity within our Cargo product line. • Our P&C operating segment recorded prior period net reserve strengthening of $1.6 million driven by large loss activity within our Primary Casualty division, partially offset by ongoing favorable performance within our Excess Casualty, Environmental and Other P&C divisions. • Our Professional Liability operating segment recorded prior period net reserve strengthening of $13.4 million driven by large loss activity within our D&O division. Our Int’l Insurance reporting segment recorded prior period net reserve strengthening of $14.8 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve strengthening of $6.5 million due to unfavorable loss development predominately from our Cargo, Specie and P&I products. • Our P&C operating segment recorded prior period net reserve strengthening of $3.1 million primarily due to unfavorable loss development within our Property division, partially offset by favorable loss emergence in our Energy & Engineering division. • Our Professional Liability operating segment recorded prior period net reserve strengthening of $5.2 million primarily due to large loss development within our E&O and D&O divisions. Our GlobalRe reporting segment recorded prior period net reserve strengthening of $2.8 million primarily driven by the settlement of a large claim in our A&H product, and unfavorable loss emergence within our P&C product. This strengthening was partially offset by reserve releases in our Agriculture and Marine products due to favorable loss emergence. The following is a discussion of the relevant factors related to the prior period net reserve releases of $28.5 million recorded for the year ended December 31, 2016: Our U.S. Insurance reporting segment recorded prior period net reserve releases of $1.3 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve releases of $10.1 million driven by favorable claims development in the Craft, Marine Liability, Customs Bonds and Inland Marine products. • Our P&C operating segment recorded prior period net reserve strengthening of $2.8 million driven by large loss activity within our Primary Casualty division, partially offset by ongoing favorable performance within our Excess Casualty, Environmental and Other P&C divisions. • Our Professional Liability operating segment recorded prior period net reserve strengthening of $6.0 million driven by unfavorable development on a few large D&O claims. Our Int’l Insurance reporting segment recorded prior period net reserve releases of $25.0 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve releases of $22.1 million due to favorable claims development predominately from our Marine Liability product. • Our P&C operating segment recorded prior period net reserve releases of $7.1 million primarily due to favorable claims development in our Energy & Engineering division, partially offset by large loss activity within our Property division. • Our Professional Liability operating segment recorded prior period net reserve strengthening of $4.1 million primarily due to a decline in expected recoveries from a large reinsurer resulting in an increase in bad debt reserve within our D&O division. Our GlobalRe reporting segment recorded prior period net reserve releases of $2.2 million primarily driven by favorable loss development in our A&H, P&C and Professional Liability products, partially offset by large loss activity in our Marine product. The following is a discussion of the relevant factors related to the prior period net reserve releases of $64.7 million recorded for the year ended December 31, 2015: Our U.S. Insurance reporting segment recorded prior period net reserve releases of $29.3 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve releases of $24.8 million driven by favorable claims development in the Marine Liability, Inland Marine and Cargo products. • Our P&C operating segment recorded prior period net reserve releases of $0.7 million driven by ongoing favorable performance within our Excess Casualty, Environmental and Other P&C divisions, mostly offset by large loss activity within our Primary Casualty division. • Our Professional Liability operating segment recorded prior period net reserve releases of $3.8 million driven by favorable emergence in our E&O division, partially offset by unfavorable development in several large D&O claims. Our Int’l Insurance reporting segment recorded prior period net reserve releases of $26.2 million. The drivers are as follows: • Our Marine operating segment recorded prior period net reserve releases of $21.9 million primarily due to favorable claims development on the Marine Liability, Protection and Indemnity and Specie products. • Our P&C operating segment recorded prior period net reserve releases of $8.5 million due to favorable claims development on the Offshore Energy product within the Energy & Engineering division. • Our Professional Liability operating segment recorded prior period net reserve strengthening of $4.2 million driven by adverse development in our D&O division related to two large losses, partially offset by favorable claims development on our E&O division. Our GlobalRe reporting segment recorded prior period net reserve releases of $9.1 million primarily driven by favorable loss development in our Marine, P&C and A&H products. Supplemental tables related to Short Duration Contracts Effectively all property and casualty insurance contracts are described as “Short Duration Contracts” as opposed to life insurance, by the Securities and Exchange Commission. Our Company only issues short duration contracts. Below are two tables with reserve data for each reporting and operating segment. These tables are presented net of reinsurance. The first table reflects incurred claims development as of December 31, 2017, as well as the cumulative claims frequency and the total of Incurred But Not Reported (“IBNR”) liabilities and expected development on reported claims included within the net incurred claims amounts. The second table reflects the cumulative paid claims development as of December 31, 2017. The conversion of all non USD currencies amounts, for all accident years, is in USD as of December 31, 2017. The information provided in our supplemental tables related to short duration contracts includes estimates. Beginning in the 2016 calendar year, the Company implemented a process for the business underwritten through Syndicate 1221 that captures and retains more detailed incurred claim data to enable it to assign AY information as accurately and completely as possible using the data available. Prior to the 2016 calendar year, records for Syndicate 1221 were not available by individual AY, which impacts the presentation of our Int’l Insurance and, to a limited extent, our Global Re supplemental tables for 2015 and prior reporting years. For this 2017 calendar year report, we revised and improved the allocation process used in our 2016 presentation in relation to our Syndicate 1221 business. For the 2016 calendar year report, we applied an allocation process using inception to date gross paid and case information through 2016 to extrapolate the data for reporting years 2012 through 2015 in our supplemental tables. Upon further consideration, for 2017 reporting, the Company developed a process to allocate the Syndicate 1221 incurred claims to individual prior accident years using only data known as of the end of such calendar year. While the estimation process used in 2016 provided information regarding the systematic nature of loss emergence, the revised and improved process applied in the current calendar year more accurately reflects information on variability of loss emergence from period to period. We believe that this process is more aligned with the objectives of this disclosure, and aligns with the first table of this Note 5 In addition, due to the limitations of the data available for our Syndicate 1221 business, the supplemental tables below for our Int’l Insurance and GlobalRe reporting segments begin with the 2012 reporting year and will increase by one year until ten years are presented. Claims frequency is based on claims posted in our Company’s data system as reported. Generally, for most direct insurance and excess-of-loss assumed reinsurance, one claim count is posted for each claim. For assumed bordereau business and business written on binders, one claim count is posted for each bordereau received, which could account for multiple claims. Additionally, if the insured is covered for multiple years, a claim may be initially established in all potentially impacted policy years until the appropriate policy year is determined. The information about incurred claims development and cumulative paid claims and Allocated Loss Adjustment Expense (“ALAE”), net of reinsurance, for the years ended December 31, 2008 through 2016, is presented as unaudited supplementary information. Note that asbestos reserves are included in the U.S. Marine operating segment in years prior to 2007. IBNR values shown in the following tables are the difference between the case reserves for reported losses and the estimated future payments for claims arising from the specific accident period. Our Company has always applied prudent claim reserving practices. For a number of segments, this has resulted in case reserves for more mature accident years exceeding the future payments consistently. IBNR estimates will be negative where our history indicates such favorable future emergence is the best estimate. U.S. Marine Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 56,878 $ 67,421 $ 72,259 $ 73,734 $ 73,494 $ 68,393 $ 68,557 $ 66,717 $ 66,937 $ 66,849 $ 282 3,194 2009 62,556 59,278 56,052 50,501 48,366 49,571 51,783 50,874 51,537 205 2,323 2010 64,753 63,812 60,035 54,813 52,847 57,008 56,458 56,281 (224 ) 2,007 2011 70,219 69,293 67,640 63,099 61,912 60,329 59,750 630 1,910 2012 85,275 87,606 72,219 68,841 70,337 70,887 (619 ) 1,856 2013 61,356 57,865 51,748 54,381 56,319 144 1,814 2014 59,270 42,684 41,006 45,762 (377 ) 1,927 2015 61,106 51,864 50,331 5,148 2,187 2016 53,011 48,791 12,748 2,352 2017 54,061 23,327 1,986 Total $ 560,568 U.S. Marine Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 $ 7,554 $ 36,397 $ 54,175 $ 56,460 $ 62,398 $ 62,700 $ 63,027 $ 63,140 $ 64,029 $ 64,433 2009 12,947 29,266 35,449 41,650 43,450 46,033 46,894 49,573 50,191 2010 16,582 32,323 39,825 42,896 48,114 51,887 55,096 55,249 2011 14,955 39,821 48,850 52,408 56,955 57,929 58,558 2012 27,254 46,308 54,673 60,734 67,220 69,059 2013 17,831 35,471 41,488 47,162 51,466 2014 10,717 23,415 34,899 41,021 2015 16,945 31,010 40,586 2016 11,610 25,154 2017 18,947 Total $ 474,664 Net reserves < 2008 15,187 Total Net reserves $ 101,091 U.S. Marine Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 U.S. Marine 27.7 % 31.8 % 16.7 % 8.4 % 7.7 % 3.3 % 2.2 % 1.9 % 1.3 % 0.6 % U.S. P&C Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 151,401 $ 152,659 $ 138,860 $ 135,255 $ 136,498 $ 138,499 $ 142,641 $ 147,763 $ 152,814 $ 154,169 $ 3,706 10,937 2009 127,237 129,613 130,860 135,984 141,186 146,321 147,036 150,294 149,622 6,143 8,515 2010 96,885 96,446 94,317 100,006 103,038 104,955 107,914 110,170 7,776 7,874 2011 79,832 78,093 86,557 89,666 90,613 98,238 100,461 12,051 6,450 2012 103,089 89,758 91,502 99,207 107,245 111,146 18,194 4,579 2013 139,517 125,952 129,100 137,298 149,409 20,569 3,898 2014 191,515 159,477 148,541 155,248 51,231 3,880 2015 244,311 218,973 214,547 76,700 3,672 2016 271,351 243,754 190,052 3,136 2017 295,386 263,648 2,527 Total $ 1,683,912 U.S. P&C Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 $ 10,266 $ 32,307 $ 54,663 $ 78,024 $ 99,825 $ 111,420 $ 119,766 $ 128,886 $ 142,284 $ 146,295 2009 11,245 33,049 55,773 86,736 110,648 123,981 129,461 136,636 138,829 2010 11,985 26,482 46,478 65,094 77,302 85,740 90,625 97,125 2011 3,630 14,579 30,359 46,638 58,489 70,486 79,682 2012 4,761 17,311 27,513 47,005 67,502 82,906 2013 7,146 20,914 48,716 84,494 118,506 2014 5,229 13,264 44,468 74,979 2015 3,575 24,057 78,856 2016 5,831 29,131 2017 12,860 Total $ 859,169 Net reserves < 2008 24,266 Total Net reserves $ 849,009 U.S. P&C Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 U.S. P&C 5.0 % 10.9 % 17.1 % 18.6 % 15.7 % 10.0 % 5.7 % 5.5 % 5.1 % 2.6 % U.S. Professional Liability Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 34,346 $ 38,449 $ 39,130 $ 35,844 $ 37,603 $ 37,939 $ 37,497 $ 37,620 $ 41,766 $ 43,003 $ 875 770 2009 47,473 53,273 61,023 58,600 60,789 58,487 58,660 58,143 61,083 788 1,370 2010 52,302 64,020 68,375 75,619 74,535 86,787 85,348 86,164 932 1,431 2011 58,116 62,087 70,240 73,028 79,181 79,136 82,558 699 1,726 2012 61,196 54,480 57,097 55,917 58,344 58,563 2,254 2,175 2013 60,899 54,982 49,104 48,298 54,228 3,915 1,982 2014 50,020 35,870 39,826 42,060 5,255 2,017 2015 31,659 30,764 31,088 8,721 1,674 2016 41,673 36,650 12,608 1,806 2017 51,708 44,396 1,902 Total $ 547,105 U.S. Professional Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 $ 1,880 $ 15,288 $ 25,042 $ 30,581 $ 34,902 $ 35,206 $ 35,598 $ 37,175 $ 42,056 $ 42,046 2009 3,837 21,742 41,675 51,642 55,378 53,859 57,744 58,095 58,150 2010 2,981 23,147 46,868 54,019 59,765 82,013 84,511 84,529 2011 3,204 23,878 43,551 59,576 65,710 75,641 78,258 2012 3,855 22,635 35,681 44,028 49,675 54,728 2013 4,677 22,167 32,904 38,876 47,062 2014 2,304 14,371 29,392 35,114 2015 2,257 11,249 18,428 2016 2,382 18,687 2017 2,682 Total $ 439,684 Net reserves < 2008 881 Total Net reserves $ 108,302 U.S. Professional Liability Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 U.S. Professional Liability 5.8 % 30.6 % 25.9 % 13.7 % 9.2 % 8.9 % 3.3 % 1.4 % 5.7 % 0.0 % Int'l Marine Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 85,148 $ 80,793 $ 80,589 $ 84,122 $ 84,449 $ 83,962 (135 ) 5,733 2009 96,465 91,705 90,527 83,477 82,074 81,729 (265 ) 5,045 2010 132,080 130,102 119,156 114,940 112,259 108,523 (428 ) 5,129 2011 100,162 85,720 82,441 77,848 73,970 74,309 (500 ) 4,643 2012 110,316 132,245 107,636 100,029 93,052 92,983 (1,224 ) 4,908 2013 87,987 94,614 82,641 81,989 84,100 3,168 4,716 2014 104,397 117,974 116,899 119,767 (1,483 ) 4,986 2015 99,067 95,001 96,614 (1,913 ) 7,400 2016 88,388 95,584 8,335 9,114 2017 107,915 32,198 7,385 Total $ 945,486 Int'l Marine Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2012 2013 2014 2015 2016 2017 2008 $ 71,355 $ 73,799 $ 75,255 $ 79,024 $ 80,185 $ 80,183 2009 66,388 70,553 73,321 76,783 77,487 78,772 2010 78,509 90,871 96,920 100,897 103,188 103,646 2011 45,896 59,341 63,778 68,702 69,672 70,022 2012 23,382 54,954 70,657 78,789 81,411 83,381 2013 23,731 46,552 58,687 64,859 67,730 2014 29,977 57,629 81,941 90,619 2015 22,862 54,550 76,044 2016 23,665 55,420 2017 29,082 Total $ 734,899 Net reserves < 2008 11,072 Total Net reserves $ 221,659 Int'l Marine Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Int'l Marine 25.1 % 29.7 % 19.0 % 7.8 % 4.3 % 2.4 % 2.3 % 1.9 % 1.5 % 0.0 % Int'l P&C Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 37,256 $ 34,428 $ 34,495 $ 33,877 $ 41,536 $ 41,472 $ 67 913 2009 38,680 40,896 40,984 40,692 34,186 34,461 206 885 2010 43,096 42,527 41,922 42,196 42,822 42,613 309 1,089 2011 71,531 61,564 59,405 59,529 59,516 55,127 221 1,216 2012 45,693 37,520 36,444 32,472 32,622 33,075 152 1,358 2013 36,044 37,520 36,599 34,499 35,443 1,027 1,592 2014 27,829 22,787 20,997 16,449 (1,396 ) 1,300 2015 34,889 36,689 33,969 10 1,986 2016 79,393 92,108 18,665 3,556 2017 56,953 10,229 2,213 Total $ 441,670 Int'l P&C Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2012 2013 2014 2015 2016 2017 2008 $ 38,275 $ 39,489 $ 39,869 $ 40,398 $ 40,249 $ 40,333 2009 28,919 33,223 33,685 33,317 33,405 33,494 2010 35,192 40,880 43,429 41,102 41,204 41,691 2011 38,548 47,851 50,753 53,318 54,239 52,225 2012 13,238 21,578 27,084 30,135 31,332 31,596 2013 7,160 18,441 25,840 28,682 30,279 2014 3,902 9,015 13,232 16,805 2015 6,845 18,436 29,624 2016 26,190 55,749 2017 15,019 Total $ 346,815 Net reserves < 2008 825 Total Net reserves $ 95,680 Int'l P&C Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Int'l P&C 25.0 % 32.4 % 26.5 % 13.0 % 4.3 % -1.0 % -1.5 % 0.9 % -0.1 % 0.2 % Int'l Professional Liability Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 11,749 $ 13,524 $ 13,798 $ 13,829 $ 14,082 $ 14,463 $ 258 439 2009 16,661 17,225 17,365 17,016 16,020 15,988 758 624 2010 14,423 14,023 14,225 14,221 15,864 14,639 247 745 2011 15,390 18,125 19,429 8,923 6,989 12,823 1,769 665 2012 6,835 11,506 12,789 13,457 17,168 18,068 2,365 1,102 2013 10,218 4,099 14,532 15,748 16,842 1,607 1,174 2014 20,662 24,519 23,861 21,758 4,216 1,747 2015 28,319 30,539 35,586 9,550 2,370 2016 36,167 34,218 22,567 2,744 2017 47,697 41,954 1,522 Total $ 232,082 Int'l Professional Liability Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2012 2013 2014 2015 2016 2017 2008 $ 12,198 $ 13,360 $ 13,754 $ 13,784 $ 14,071 $ 14,105 2009 8,954 10,901 12,983 14,008 14,331 14,918 2010 5,909 7,320 10,659 12,840 13,597 13,643 2011 1,221 2,038 2,994 4,087 4,677 16,642 2012 2,141 3,236 4,293 5,600 7,526 6,933 2013 733 2,285 3,078 9,478 13,906 2014 1,387 2,493 5,228 8,945 2015 3,457 5,939 17,502 2016 2,076 6,955 2017 2,024 Total $ 115,573 Net reserves < 2008 274 Total Net reserves $ 116,783 Int'l Professional Liability Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Int'l Professional 6.7 % 8.8 % 16.6 % 20.8 % 15.2 % 5.4 % 35.0 % 0.8 % 2.8 % 0.2 % GlobalRe Loss and ALAE, Net of Reinsurance amounts in thousands except # of reported claims For the Years Ended December 31, As of December 31, 2017 AY 2012 2013 2014 2015 2016 2017 Total IBNR # of Reported Claims 2008 $ 14,467 $ 14,846 $ 14,198 $ 13,792 $ 13,487 $ 13,123 $ 529 306 2009 11,247 11,381 11,267 10,516 10,567 10,406 53 200 2010 13,150 13,110 14,142 11,908 12,631 13,159 (54 ) 201 2011 53,868 76,362 76,164 73,610 72,877 73,530 (438 ) 769 2012 107,189 99,116 92,730 88,367 115,058 119,771 (815 ) 1,456 2013 114,873 118,779 102,632 105,172 102,433 1,067 1,285 2014 119,379 142,058 121,716 118,255 5,062 1,070 2015 101,764 91,767 94,428 6,897 896 2016 88,543 90,755 15,972 749 2017 129,150 60,576 428 Total $ 765,010 GlobalRe Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance amounts in thousands For the Years Ended December 31, AY 2012 2013 2014 2015 2016 2017 2008 $ 11,775 $ 11,799 $ 11,661 $ 11,640 $ 11,702 $ 11,797 2009 8,694 8,930 9,060 10,018 10,133 10,133 2010 10,005 10,349 10,529 11,154 11,207 11,272 2011 43,450 71,138 71,816 72,102 72,246 72,414 2012 37,746 77,227 83,408 84,801 111,962 117,782 2013 53,476 82,701 90,721 98,484 100,059 2014 66,286 119,249 105,648 108,794 2015 41,660 64,527 76,973 2016 36,352 66,277 2017 43,663 Total $ 619,164 Net reserves < 2008 2,504 Total Net reserves $ 148,350 GlobalRe Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 GlobalRe 39.3 % 34.0 % 3.2 % 3.8 % 8.2 % 3.3 % 3.3 % 0.5 % 0.2 % 0.7 % The reconciliation of the net incurred and paid claims development tables to the Reserve for losses and LAE in the consolidated statement of financial position is as follows: Carried Reserves Reconciliation amounts in thousands As of December 31, 2017 Total Net Reserves Reinsurance Recoverables on Unpaid Claims Total Gross Reserves U.S. Marine $ 101,091 $ 98,373 $ 199,464 U.S. P&C 849,009 371,651 1,220,660 U.S. Professional Liability 108,302 49,650 157,952 Int'l Marine 221,659 90,792 312,451 Int'l P&C 95,680 126,365 222,045 Int'l Professional Liability 116,783 55,393 172,176 GlobalRe 148,350 17,541 165,891 Liabilities for Unpaid Claims and Claim Adjustment Expenses $ 1,640,874 $ 809,765 $ 2,450,639 Unallocated Claims Adjustment Expenses 64,269 Other 237 Total Gross Liability for Unpaid Claims and Claim Adjustment Expense $ 2,515,145 F-1 |