XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.20.2

Unpaid losses and loss expenses | 6 Months Ended
--- | ---
Jun. 30, 2020
Liability for Claims and Claims Adjustment Expense [Abstract] |
Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block] | Unpaid losses and loss expenses The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:
| Six Months Ended June 30 |  |
(in millions of U.S. dollars) | 2020 |  | 2019
Gross unpaid losses and loss expenses – beginning of period | $ | 62,690 |  |  | $ | 62,960 |
Reinsurance recoverable on unpaid losses - beginning of period (1) | (14,181) |  |  | (14,689) |
Net unpaid losses and loss expenses – beginning of period | 48,509 |  |  | 48,271 |
Net losses and loss expenses incurred in respect of losses occurring in: |  |  |
Current year | 11,111 |  |  | 9,224 |
Prior years (2) | (49) |  |  | (411) |
Total | 11,062 |  |  | 8,813 |
Net losses and loss expenses paid in respect of losses occurring in: |  |  |
Current year | 2,263 |  |  | 2,288 |
Prior years | 5,842 |  |  | 5,823 |
Total | 8,105 |  |  | 8,111 |
Foreign currency revaluation and other | (128) |  |  | (1) |
Net unpaid losses and loss expenses – end of period | 51,338 |  |  | 48,972 |
Reinsurance recoverable on unpaid losses (1) | 14,361 |  |  | 14,233 |
Gross unpaid losses and loss expenses – end of period | $ | 65,699 |  |  | $ | 63,205 |
(1) Net of valuation allowance for uncollectible reinsurance. (2) Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments and earned premiums totaling $6 million and $19 million for the six months ended June 30, 2020 and 2019, respectively. Gross and net unpaid losses and loss expenses increased $3,009 million and $2,829 million, respectively, for the six months ended June 30, 2020, driven by catastrophe losses incurred principally related to the COVID-19 pandemic and an increase in underlying reserves, partially offset by favorable foreign exchange movement. Prior Period Development Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years. Long-tail lines include lines such as workers' compensation, general liability, and professional liability; while short-tail lines include lines such as most property lines, energy, personal accident, and agriculture. The following table summarizes (favorable) and adverse PPD by segment.
| Three Months Ended June 30 |  |  |  |  |  | Six Months Ended June 30 |  |  |  |
(in millions of U.S. dollars) | Long-tail |  | Short-tail |  | Total |  | Long-tail |  | Short-tail |  | Total
2020 |  |  |  |  |  |  |  |  |  |  |
North America Commercial P&C Insurance | $ | (141) |  |  | $ | (5) |  |  | $ | (146) |  |  | $ | (184) |  |  | $ | (67) |  |  | $ | (251) |
North America Personal P&C Insurance | — |  |  | (1) |  |  | (1) |  |  | — |  |  | — |  |  | — |
North America Agricultural Insurance | — |  |  | — |  |  | — |  |  | — |  |  | (14) |  |  | (14) |
Overseas General Insurance | (1) |  |  | (35) |  |  | (36) |  |  | (1) |  |  | (39) |  |  | (40) |
Global Reinsurance | (19) |  |  | 3 |  |  | (16) |  |  | (19) |  |  | (4) |  |  | (23) |
Corporate | 274 |  |  | — |  |  | 274 |  |  | 285 |  |  | — |  |  | 285 |
Total | $ | 113 |  |  | $ | (38) |  |  | $ | 75 |  |  | $ | 81 |  |  | $ | (124) |  |  | $ | (43) |
2019 |  |  |  |  |  |  |  |  |  |  |
North America Commercial P&C Insurance | $ | (206) |  |  | $ | 21 |  |  | $ | (185) |  |  | $ | (271) |  |  | $ | (45) |  |  | $ | (316) |
North America Personal P&C Insurance | — |  |  | (16) |  |  | (16) |  |  | — |  |  | (26) |  |  | (26) |
North America Agricultural Insurance | — |  |  | — |  |  | — |  |  | — |  |  | (61) |  |  | (61) |
Overseas General Insurance | — |  |  | (20) |  |  | (20) |  |  | — |  |  | (24) |  |  | (24) |
Global Reinsurance | (33) |  |  | 33 |  |  | — |  |  | (34) |  |  | 26 |  |  | (8) |
Corporate | 33 |  |  | — |  |  | 33 |  |  | 43 |  |  | — |  |  | 43 |
Total | $ | (206) |  |  | $ | 18 |  |  | $ | (188) |  |  | $ | (262) |  |  | $ | (130) |  |  | $ | (392) |
Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate. North America Commercial P&C Insurance 2020 For the three months ended June 30, 2020, net favorable PPD was $146 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $141 million in long-tail business, primarily from: •Net favorable development of $152 million in our workers’ compensation lines. This included favorable development of $62 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2019 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. This development in accident year 2019 was partially offset by some higher than expected activity from other claims. The remaining overall favorable development was mainly in accident years 2015 and prior, driven by lower than expected loss experience and related updates to loss development factors; •Net favorable development of $59 million in general liability portfolios, mainly driven by lower than expected paid and reported loss experience in accident years 2016 and prior, partly offset by some adverse emergence in accident years 2017 through 2019; •Net adverse development of $75 million in commercial automobile liability, mainly in high deductible and excess portfolios, driven by adverse paid and reported loss experience and related updates to loss development factors, mainly in accident years 2015 through 2019; and •Net adverse development of $5 million for U.S. child molestation claims, predominantly reviver statute-related. For the six months ended June 30, 2020, net favorable PPD was $251 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $184 million in long-tail business, primarily from: •Net favorable development of $182 million in workers’ compensation lines, mainly due to the same factors experienced for the three months ended June 30, 2020, as described above; •Net favorable development of $66 million in professional liability (errors & omissions and cyber), in accident years 2016 and prior, due to lower than expected emergence; •Net favorable development of $43 million in voluntary environmental lines, in accident years 2016 and prior, due to lower than expected emergence and a favorable revision to loss development patterns; •Net favorable development of $36 million in general liability coverages, mainly due to the same factors experienced for the three months ended June 30, 2020, as described above, as well as adverse wholesale general liability results, driven by higher than expected reported loss emergence in accident years 2014 through 2019; •Net adverse development of $75 million in commercial automobile liability, due to the same factors experienced for the three months ended June 30, 2020, as described above; •Net adverse development of $40 million in excess and umbrella portfolios, with accident years 2015 through 2019 experiencing higher than expected reported development, partially offset by lower than expected emergence in accident years 2014 and prior; and •Net adverse development of $5 million for U.S. child molestation claims, predominantly reviver statute-related. •Net favorable development of $67 million in short-tail business, primarily from: •Net favorable development of $37 million, in accident & health, mainly in accident years 2018 and 2019, driven by lower than expected paid loss emergence; and •Net favorable development of $31 million in surety, driven by accident year 2018, where loss emergence was lower than expected. 2019 For the three months ended June 30, 2019, net favorable PPD was $185 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $206 million in long-tail business, primarily from: •Net favorable development of $163 million in our workers’ compensation lines. This included favorable development of $61 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2018 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. This development in accident year 2018 was partially offset by some higher than expected activity from other claims and from involuntary pools. The remaining overall favorable development was mainly in accident years 2014 and prior, driven by lower than expected loss experience and related updates to loss development factors; •Net favorable development of $50 million in our general liability portfolios, mainly driven by lower than expected paid and reported loss experience in accident years 2015 and prior, partly offset by adverse developments in more recent accident years; and •Net adverse development of $25 million in automobile liability, driven by adverse paid and reported loss experience mainly in accident years 2014 through 2018. •Net adverse development of $21 million in short-tail business, which was the result of several adverse movements, in lines such as automobile physical damage and involuntary pools, none of which were significant individually or in the aggregate, mainly impacting accident year 2018. For the six months ended June 30, 2019, net favorable PPD was $316 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $271 million in long-tail business, primarily from: •Net favorable development of $200 million in our workers’ compensation lines, mainly due to the same factors experienced for the three months ended June 30, 2019, as described above; •Net favorable development of $54 million in professional liability (errors & omissions and cyber), mainly in the 2015 and prior accident years where case activity was less than expected, partially offset by adverse development in the 2016 accident year, which was driven by several large adverse claim developments; •Net favorable development of $31 million in commercial excess and umbrella portfolios, driven by the 2013 and prior accident years, where case emergence was less than expected and greater weight was given to experience-based methods; this was partially offset by higher than expected claim activity in the 2015, 2016, and 2018 accident years which led to reserve strengthening in those years; and •Net adverse development of $31 million in automobile liability, mainly due to the same factors experienced for the three months ended June 30, 2019, as described above. •Net favorable development of $45 million in short-tail business, primarily from favorable development of $49 million in surety business, mainly in the 2017 accident year, driven by lower than expected reported loss activity. North America Agricultural Insurance Prior period development in this segment mainly relates to our Multiple Peril Crop Insurance (MPCI) business and was favorable due to better than expected crop yield results in certain states at the prior year-end period (i.e., 2020 results based on 2019 crop year). Overseas General Insurance For the three and six months ended June 30, 2020, net favorable PPD was $36 million and $40 million, respectively, which was the net result of several underlying favorable and adverse movements, including $19 million and $22 million, respectively, in marine lines across all regions mainly in accident years 2017 and 2018 and favorable case-specific settlements in accident years 2014 and prior. Global Reinsurance For the three and six months ended June 30, 2020, net favorable PPD was $16 million and $23 million, respectively, which was the net result of several underlying favorable and adverse movements, none of which is significant individually or in the aggregate. Corporate 2020 For the three and six months ended June 30, 2020, net adverse development was $274 million and $285 million, respectively, driven by adverse development of $254 million for U.S. child molestation claims, predominantly reviver statute-related. The remainder of the adverse development ($20 million and $31 million, respectively) was driven by increased claim costs on a limited number of non-A&E run-off casualty and workers’ compensation exposures, and charges relating to unallocated loss adjustment expenses due to run-off operating expenses. 2019 For the three and six months ended June 30, 2019, net adverse development was $33 million and $43 million, respectively, from the non A&E run-off casualty exposures, including workers' compensation, driven by increased claim costs and net adverse settlements on a limited number of claims and charges relating to unallocated loss adjustment expenses due to run-off operating expenses.

X
- References No definition available. + Details
Name: | us-gaap_LiabilityForClaimsAndClaimsAdjustmentExpenseAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
Name: | us-gaap_LiabilityForFuturePolicyBenefitsAndUnpaidClaimsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration