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Unpaid Losses And Loss Adjustment Expenses | 12 Months Ended
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Dec. 31, 2023
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract] |
Unpaid Losses And Loss Adjustment Expenses | Unpaid Losses and Loss Adjustment Expenses a) The following table presents a reconciliation of consolidated beginning and ending reserves for losses and loss adjustment expenses.
| Years Ended December 31,
(dollars in thousands) | 2023 |  | 2022 |  | 2021
Gross reserves for losses and loss adjustment expenses, beginning of year | $ | 20,947,898 |  |  | $ | 18,178,894 |  |  | $ | 16,222,376 |
Reinsurance recoverables on unpaid losses, beginning of year | 7,994,884 |  |  | 6,876,317 |  |  | 5,736,659 |
Net reserves for losses and loss adjustment expenses, beginning of year | 12,953,014 |  |  | 11,302,577 |  |  | 10,485,717 |
Effect of foreign currency rate changes on beginning of year balance | 70,344 |  |  | (160,622) |  |  | (54,736) |
Adjusted net reserves for losses and loss adjustment expenses, beginning of year | 13,023,358 |  |  | 11,141,955 |  |  | 10,430,981 |
Incurred losses and loss adjustment expenses: |  |  |  |  |
Current accident year | 5,360,559 |  |  | 4,613,035 |  |  | 4,061,000 |
Prior accident years | (38,550) |  |  | (167,446) |  |  | (478,930) |
Total incurred losses and loss adjustment expenses | 5,322,009 |  |  | 4,445,589 |  |  | 3,582,070 |
Payments: |  |  |  |  |
Current accident year | 729,895 |  |  | 580,537 |  |  | 637,169 |
Prior accident years | 2,663,165 |  |  | 2,396,446 |  |  | 2,066,290 |
Total payments | 3,393,060 |  |  | 2,976,983 |  |  | 2,703,459 |
Effect of foreign currency rate changes on current year activity | (1,532) |  |  | (5,468) |  |  | (4,253) |
Change in net reserves for losses and loss adjustment expenses of Markel CATCo Re (see note 17) | (162,954) |  |  | 347,921 |  |  | — |
Net reserves for losses and loss adjustment expenses of insurance companies sold | — |  |  | — |  |  | (2,762) |
Reinsurance recoverable on retroactive reinsurance transactions | (125,067) |  |  | — |  |  | — |
Net reserves for losses and loss adjustment expenses, end of year | 14,662,754 |  |  | 12,953,014 |  |  | 11,302,577 |
Reinsurance recoverables on unpaid losses, end of year | 8,820,567 |  |  | 7,994,884 |  |  | 6,876,317 |
Gross reserves for losses and loss adjustment expenses, end of year | $ | 23,483,321 |  |  | $ | 20,947,898 |  |  | $ | 18,178,894 |
In 2023, the Company completed a retroactive reinsurance transaction to cede its portfolio of policies comprised of liabilities for its run-off book of United Kingdom (U.K.) motor casualty business in exchange for payments totaling $125.1 million, which approximated the carrying value of the Company's reserves for losses and loss adjustment expenses on the ceded policies. In 2023, the Company recognized losses on its intellectual property collateral protection insurance product written within the Insurance segment's professional liability product line. These losses included $65.0 million of credit losses recognized in connection with fraudulent letters of credit that were provided by an affiliate of Vesttoo Ltd. as collateral for reinsurance purchased on two policies, which the Company believes represents its full exposure to credit losses on the related reinsurance recoverables. The Company is actively pursuing remedies to make recoveries on the reinsurance recoverables impacted by the fraudulent letters of credit and does not have any other ceded reinsurance contracts with Vesttoo Ltd. or its affiliates. In 2023, current accident year losses and loss adjustment expenses included $40.1 million of net losses and loss adjustment expenses attributed to the Hawaiian wildfires and Hurricane Idalia. These losses and loss adjustment expenses were net of ceded losses of $9.3 million. In 2022, current accident year losses and loss adjustment expenses included $46.2 million of net losses and loss adjustment expenses attributed to Hurricane Ian. These losses and loss adjustment expenses were net of ceded losses of $115.3 million. The Company also had gross losses and loss adjustment expenses of $850.0 million within its program services and other fronting operations attributed to Hurricane Ian, all of which were ceded to third-party reinsurers managed through the Company's insurance-linked securities operations. In 2022, current accident year losses and loss adjustment expenses also included $35.7 million of net losses and loss adjustment expenses attributed to the Russia-Ukraine conflict. These losses and loss adjustment expenses were net of ceded losses of $44.3 million. In 2021, current accident year losses and loss adjustment expenses included $195.0 million of net losses and loss adjustment expenses from Winter Storm Uri, European Floods and Hurricane Ida. These losses and loss adjustment expenses were net of ceded losses of $221.7 million. b) Reserving Methodology The Company uses a variety of techniques to establish the liabilities for unpaid losses and loss adjustment expenses based upon estimates of the ultimate amounts payable. The Company maintains reserves for specific claims incurred and reported (case reserves) and reserves for claims incurred but not reported (IBNR reserves), which include expected development on reported claims. The Company does not discount its reserves for losses and loss adjustment expenses to reflect estimated present value, except for reserves held for a run-off book of U.K. motor business. Additionally, reserves assumed in connection with an acquisition are recorded at fair value at the acquisition date. The fair value adjustment includes an adjustment to reflect the acquired reserves for losses and loss adjustment expenses at present value plus a risk premium, the net of which is amortized to losses and loss adjustment expenses within the consolidated statements of income. As of any balance sheet date, all claims have not yet been reported, and some claims may not be reported for many years. As a result, the liability for unpaid losses and loss adjustment expenses includes significant estimates for incurred but not reported claims. There is normally a time lag between when a loss event occurs and when it is reported to the Company. The actuarial methods that the Company uses to estimate losses have been designed to address the lag in loss reporting as well as the delay in obtaining information that would allow the Company to more accurately estimate future payments. There is also often a time lag between cedents establishing case reserves or re-estimating their reserves and notifying the Company of those new or revised case reserves. As a result, the reporting lag is more pronounced in reinsurance contracts than in the insurance contracts. On reinsurance transactions, the reporting lag will generally be 60 to 90 days after the end of a reporting period, but can be longer in some cases. There may also be a more pronounced reporting lag, as well as reliance on third-party claims handling practices and reserve estimates, on insurance contracts for which the Company is not the primary insurer and participates only in excess layers of loss. Based on the experience of the Company's actuaries and management, the Company selects loss development factors and trending techniques to mitigate the difficulties caused by reporting lags. At least annually, the Company evaluates its loss development factors and trending assumptions using its own loss data, as well as cedent-specific and industry data, and updates them as needed. IBNR reserves are based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. IBNR reserves are calculated by subtracting paid losses and loss adjustment expenses and case reserves from estimated ultimate losses and loss adjustment expenses. IBNR reserves were 72% of total unpaid losses and loss adjustment expenses at December 31, 2023 compared to 70% at December 31, 2022. In establishing liabilities for unpaid losses and loss adjustment expenses, the Company's actuaries estimate an ultimate loss ratio, by accident year or underwriting year, for each product line with input from underwriting and claims personnel. For product lines in which loss reserves are established on an underwriting year basis, the Company has developed a methodology to convert from underwriting year to accident year for financial reporting purposes. In estimating an ultimate loss ratio for a particular line of business, the actuaries may use one or more actuarial reserving methods and select from these a single point estimate. To varying degrees, these methods include detailed statistical analysis of past claim reporting, settlement activity, claim frequency and severity, policyholder loss experience, industry loss experience and changes in market and economic conditions, policy forms and exposures. Greater judgment may be required when new product lines are introduced or when there have been changes in claims handling practices, as the statistical data available may be insufficient. Greater judgment also may be required for product lines that experience a low frequency of high severity claims, particularly when the Company is reliant on third party case reserve estimates and claims handling practices. These estimates also reflect implicit and explicit assumptions regarding the potential effects of external factors, including economic and social inflation, judicial decisions, changes in law, general economic conditions and recent trends in these factors. Management believes the process of evaluating past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events. Estimates for losses from widespread catastrophic events, such as hurricanes and earthquakes, as well as pandemics and wars, are based on claims received to date, industry loss estimates and output from both industry, broker and proprietary models, as well as analysis of the Company's ceded reinsurance contracts. The Company may also perform detailed policy and reinsurance contract level reviews. The level of reliance on these procedures varies depending on the timing of the event relative to the point at which the Company develops its estimates. The Company also considers loss experience on historical events that may have similar characteristics to the underlying event and current market conditions, including the level of economic inflation. In the period shortly after an event occurs, more weight is put on modeling and industry estimates, whereas with the passage of time, greater reliance is placed on incurred claims data and historical claim patterns. Due to the inherent uncertainty in estimating such losses, these estimates are subject to variability, which increases with the severity and complexity of the underlying event. As additional claims are reported and paid, and industry loss estimates are revised, the Company incorporates this new information into its analysis and adjusts its estimate of ultimate losses and loss adjustment expenses as appropriate. Loss reserves are established at management's best estimate, which is developed using the actuarially calculated point estimate as the starting point. The actuarial point estimate represents the actuaries' estimate of the most likely amount that will ultimately be paid to settle the losses that have occurred at a particular point in time; however, there is inherent uncertainty in the point estimate as it is the expected value in a range of possible reserve estimates. Similarly, the point estimate for ceded losses is calculated based on the ultimate gross loss amount expected to be paid, as well as the frequency and severity of the underlying claims, which ultimately determines coverage under the applicable ceded reinsurance contracts. Therefore, ceded loss estimates are subject to many of the same judgments and assumptions as the gross loss estimates. In some cases, actuarial analyses, which are generally based on statistical analysis, cannot fully incorporate all of the subjective factors that affect development of losses. In other cases, management's perspective of these more subjective factors may differ from the actuarial perspective. Subjective factors influencing the development of management's best estimate include: the credibility and timeliness of claims and loss information received from cedents and other third parties; and the impacts of economic and social inflation, judicial decisions, changes in law, changes in underwriting or claims handling practices, general economic conditions, the risk of moral hazard and other current and developing trends within the insurance and reinsurance markets, including the effects of competition. For example, the Company's loss experience in recent years has reflected higher than anticipated levels of economic inflation, as well as the impacts of social inflation, including the rising cost to adjust and settle claims and the impact of more pervasive litigation financing trends. Inherent in the Company's reserving practices is the desire to establish loss reserves that are more likely redundant than deficient, and therefore, will ultimately prove to be adequate. This approach to establishing loss reserves typically results in loss reserves that exceed the calculated actuarial point estimate. However, following an acquisition of insurance operations, acquired reserves initially are recorded at fair value, and therefore the acquired loss reserves may be closer to the actuarial point estimate until the Company builds total loss reserves that are consistent with the Company's historic level of confidence. Management continually attempts to improve its loss estimation process by refining its ability to analyze loss development patterns, claim payments and other information, but uncertainty remains regarding the potential for adverse development of estimated ultimate liabilities. The Company's ultimate liability may be greater or less than current reserves. Changes in the Company's estimated ultimate liability for loss reserves generally occur as a result of the emergence of unanticipated loss activity, the completion of specific actuarial or claims studies or changes in internal or external factors that impact the assumptions used to derive the Company's estimates. The Company closely monitors new information on reported claims and uses statistical analyses prepared by its actuaries to evaluate the adequacy of recorded reserves. Management exercises judgment when assessing the relative credibility of loss development trends. Management currently believes the Company's gross and net reserves are adequate. However, there is no precise method for evaluating the impact of any significant factor on the adequacy of reserves, and actual results will differ from original estimates. c) Prior Accident Year Loss Development The following tables summarize, by segment, the product lines with the most significant changes in prior accident years loss reserves for the years ended December 31, 2023, 2022 and 2021, along with the corresponding accident years and the trends and factors that impacted management's best estimate of ultimate losses and loss adjustment expenses on underlying products in each of these product lines. The Company does not estimate losses at this level of aggregation as it offers a diverse portfolio of products and manages these products in logical groupings within each underwriting segment. As a result of the trends and factors described in the following tables, the Company's actuaries adjusted their estimates of the ultimate liability for unpaid losses and loss adjustment expenses. For those product lines with favorable development on prior accident years loss reserves, management has now given more credibility to the favorable trends observed by the Company's actuaries and after also incorporating these favorable trends into its best estimate, reduced prior years loss reserves accordingly. The unfavorable claims and loss trends experienced on the Company's U.S. and Bermuda general liability and professional liability product lines in 2023 and 2022 reflected broader market conditions, including the effects of economic and social inflation, and disrupted the development of the claims trend observed in 2021 and prior years. In 2022, these changes in trends were most impactful on the 2018 and 2019 accident years for the professional liability product lines and the 2016 to 2019 accident years for the general liability product lines. In 2023, we continued to observe similar trends on those accident years and also determined that the loss trends on more recent accident years were following a similar loss development trend at the same stage as older accident years. Consistent with the Company's reserving philosophy, management is responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of previous expectations, however in instances where trends have been more favorable than previously anticipated, management will wait to reduce loss reserves until those trends are observed over additional periods of time.
| Year Ended December 31, 2023
(dollars in millions) | Loss Development |  | Accident Years with Most Significant Development |  | Trends and Factors Impacting Loss Estimates
Insurance segment: |  |  |  |  |
General liability |  |  |  |  |
U.S. and Bermuda | $ | 274.0 |  |  | 2016 to 2021 |  | Increased frequency of large claims and unfavorable loss cost trends, primarily on primary casualty contractors' liability and excess and umbrella product lines
International | (36.5) |  |  | 2020 to 2022 |  | Lower loss frequency and severity than previously anticipated
Professional liability |  |  |  |  |
U.S. and Bermuda | 56.8 |  |  | Several |  | Increased frequency of large claims and unfavorable loss cost trends, primarily on risk-managed errors and omissions product line
International | (102.2) |  |  | 2020 |  | Lower loss frequency and severity than previously anticipated
Property | (95.1) |  |  | 2020 to 2022 |  | Lower loss severity than previously anticipated and net favorable development on catastrophe events
Marine and energy | (76.5) |  |  | 2021 and 2022 |  | Lower loss severity than previously anticipated
Personal lines | (42.8) |  |  | 2022 |  | Lower loss frequency and severity than previously anticipated
Workers' compensation | (36.5) |  |  | 2021 and 2022 |  | Lower loss severity than previously anticipated
Other products | (45.9) |  |  |  |  |
Total Insurance | (104.7) |  |  |  |  |
Reinsurance segment: |  |  |  |  |
General liability | 95.5 |  |  | 2015 to 2021 |  | Large reported claims and adverse loss development trends
Public entity | 53.7 |  |  | 2014 to 2019 |  | Increased frequency of large claims on a segment of business that we discontinued writing in 2020
Premium adjustments | 11.4 |  |  | 2021 and 2022 |  | Recognition of additional exposures on prior accident years related to net favorable premium adjustments primarily on general liability, partially offset by reduced exposures recognized primarily on professional liability
Property | (21.6) |  |  | 2017 to 2019 |  | More favorable loss experience and lower loss severity than previously anticipated
Workers' compensation | (14.9) |  |  | Several |  | Lower loss frequency and severity than previously anticipated
Other products | (67.0) |  |  |  |  |
Total Reinsurance | 57.1 |  |  |  |  |
Other underwriting | 9.0 |  |  |  |  |
Total decrease | $ | (38.6) |  |  |  |  |
| Year Ended December 31, 2022
(dollars in millions) | Loss Development |  | Accident Years with Most Significant Development |  | Trends and Factors Impacting Loss Estimates
Insurance segment: |  |  |  |  |
Professional liability |  |  |  |  |
2018 and 2019 accident years | $ | 121.0 |  |  | 2018 and 2019 |  | Unfavorable claims settlements and increased claim frequency and severity, primarily on directors and officers, errors and omissions and employment practices liability lines
All other accident years | (91.1) |  |  | Several |  | More favorable loss experience and lower loss severity than previously anticipated
General liability |  |  |  |  |
2016 to 2019 accident years | 61.6 |  |  | 2016 to 2019 |  | Unfavorable claims settlements and increased claim frequency and severity, primarily on contractors and excess and umbrella lines
All other accident years | (20.5) |  |  | Several |  | Lower loss frequency and severity than previously anticipated
Workers' compensation | (62.1) |  |  | 2016 to 2021 |  | Lower loss severity than previously anticipated
Programs | (48.3) |  |  | 2020 and 2021 |  | Lower than expected frequency of claims
Property | (48.1) |  |  | 2020 and 2021 |  | Lower loss severity than originally anticipated as well as favorable development on COVID-19
Credit and surety | (31.7) |  |  | 2019 to 2021 |  | Lower than expected frequency of claims
Other products | (23.7) |  |  |  |  |
Total Insurance | (142.9) |  |  |  |  |
Reinsurance segment: |  |  |  |  |
Property | (29.2) |  |  | 2017 to 2019 |  | Favorable development on catastrophe events
Credit and surety | (22.9) |  |  | Several |  | Favorable commutations on mortgage insurance contracts
Premium adjustments | 53.1 |  |  | 2020 and 2021 |  | Recognition of additional exposures on prior accident years related to net favorable premium adjustments primarily on general liability, credit and surety and professional liability
Other products | (27.1) |  |  |  |  |
Total Reinsurance | (26.1) |  |  |  |  |
Other underwriting | 1.6 |  |  |  |  |
Total decrease | $ | (167.4) |  |  |  |  |
| Year Ended December 31, 2021
(dollars in millions) | Loss Development |  | Accident Years with Most Significant Development |  | Trends and Factors Impacting Loss Estimates
Insurance segment: |  |  |  |  |
General liability | $ | (139.7) |  |  | Several |  | Lower than expected frequency of claims and more favorable experience than originally anticipated across several sub-product lines
Property | (96.5) |  |  | 2018 to 2020 |  | Lower than expected frequency of large claims as well as favorable development on COVID-19 and catastrophe events
Workers' compensation | (79.0) |  |  | Several |  | Lower loss severity than originally anticipated
Marine and energy | (60.0) |  |  | 2018 to 2020 |  | Lower loss frequency and severity than originally anticipated
Professional liability | (54.7) |  |  | Several |  | Lower loss frequency and severity than originally anticipated
Other products | (76.4) |  |  |  |  |
Total Insurance | (506.3) |  |  |  |  |
Reinsurance segment: |  |  |  |  |
Property | 35.0 |  |  | 2020 |  | Adverse development on COVID-19 and catastrophe events
Professional liability | 29.2 |  |  | Several |  | Recognition of additional exposures on prior accident years related to net favorable premium adjustments
General liability | (19.2) |  |  | 2011, 2012, 2017 and 2020 |  | Favorable development on COVID-19 and catastrophe events as well as lower than expected paid losses on reported claims
Credit and surety | (16.6) |  |  | 2020 |  | Favorable commutations on mortgage insurance contracts
Other products | (8.5) |  |  |  |  |
Total Reinsurance | 19.9 |  |  |  |  |
Other | 6.6 |  |  |  |  |
Total decrease | $ | (479.8) |  |  |  |  |
d) Historic Loss Development The following tables present undiscounted loss development information, by accident year, for the Company's Insurance and Reinsurance segments, including cumulative incurred and paid losses and allocated loss adjustment expenses, net of reinsurance, as well as the corresponding amount of IBNR reserves as of December 31, 2023. This level of disaggregation is consistent with how the Company analyzes loss reserves for both internal and external reporting purposes. The loss development information for the years ended December 31, 2014 through 2022 is presented as supplementary information. All amounts included in the following tables related to transactions denominated in a foreign currency have been translated into U.S. Dollars using the exchange rates in effect at December 31, 2023. The difference between the segment loss development implied by the tables for the year ended December 31, 2023 and actual losses and loss adjustment expenses recognized on prior accident years for the Insurance and Reinsurance segments for the year ended December 31, 2023 is primarily attributed to the fact that amounts presented in these tables exclude amounts attributed to the 2013 and prior accident years. Favorable development on 2013 and prior accident years for the year ended December 31, 2023 totaled $25.9 million for the Insurance segment, reflecting modest favorable development on the segment's professional liability, marine and energy and general liability product lines. Favorable development on 2013 and prior accident years for the year ended December 31, 2023 totaled $69.4 million for the Reinsurance segment, which was due in part to lower loss severity than previously anticipated on the segment's professional liability and property product lines. Additionally, within the Reinsurance segment, net reserves on the 2014 and 2015 accident years decreased $28.1 million as a result of reserves ceded in connection with the retroactive reinsurance transaction related to the Company's run-off book of U.K.motor casualty business completed in 2023. The remaining difference between the segment loss development implied by the tables for the year ended December 31, 2023 and actual losses and loss adjustment expenses on prior accident years is attributed to the fact that amounts presented in these tables exclude unallocated loss adjustment expenses and amounts attributable to reserve discounting, as well as differences in the presentation of foreign currency movements, as previously described, none of which are material to the Insurance or Reinsurance segments. The Insurance segment table that follows also includes claim frequency information, by accident year. The Company defines a claim as a single claim incident, per policy, which may include multiple claimants and multiple coverages on a single policy. Claim counts include claims closed without a payment as well as claims where the Company is monitoring to determine if an exposure exists, even if a reserve has not been established. All of the business contained within the Company's Reinsurance segment represents treaty business that is assumed from other insurance or reinsurance companies, for which the Company does not have access to the underlying claim counts. Further, this business includes both quota share and excess of loss treaty reinsurance, through which only a portion of each reported claim results in losses to the Company. As such, the Company has excluded claim count information from the Reinsurance segment disclosures. Insurance Segment
(dollars in millions) | Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance |  | Total of Incurred-but-Not-Reported Liabilities, Net of Reinsurance |  | Cumulative Number of Reported Claims
Unaudited |  | As of December 31, |  |
As of December 31, |  |  |
Accident Year | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | December 31, 2023
2014 | $ | 1,859.0 |  |  | $ | 1,690.3 |  |  | $ | 1,622.7 |  |  | $ | 1,565.5 |  |  | $ | 1,517.2 |  |  | $ | 1,496.0 |  |  | $ | 1,469.3 |  |  | $ | 1,466.2 |  |  | $ | 1,446.3 |  |  | $ | 1,431.5 |  |  | $ | 30.1 |  |  | 86,000 |
2015 |  |  | 1,778.1 |  |  | 1,704.8 |  |  | 1,582.0 |  |  | 1,527.9 |  |  | 1,497.2 |  |  | 1,464.9 |  |  | 1,460.6 |  |  | 1,450.4 |  |  | 1,470.7 |  |  | 67.8 |  |  | 90,000 |
2016 |  |  |  |  | 1,866.1 |  |  | 1,862.7 |  |  | 1,763.4 |  |  | 1,710.1 |  |  | 1,683.4 |  |  | 1,676.2 |  |  | 1,687.9 |  |  | 1,742.5 |  |  | 123.9 |  |  | 100,000 |
2017 |  |  |  |  |  |  | 2,321.4 |  |  | 2,190.6 |  |  | 2,071.0 |  |  | 2,009.3 |  |  | 2,016.2 |  |  | 2,035.4 |  |  | 2,122.9 |  |  | 138.2 |  |  | 138,000 |
2018 |  |  |  |  |  |  |  |  | 2,444.6 |  |  | 2,339.2 |  |  | 2,215.0 |  |  | 2,074.1 |  |  | 2,166.1 |  |  | 2,347.4 |  |  | 216.2 |  |  | 191,000 |
2019 |  |  |  |  |  |  |  |  |  |  | 2,569.4 |  |  | 2,421.1 |  |  | 2,257.8 |  |  | 2,308.4 |  |  | 2,486.8 |  |  | 296.4 |  |  | 227,000 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  | 3,202.3 |  |  | 2,987.6 |  |  | 2,928.0 |  |  | 2,867.6 |  |  | 770.7 |  |  | 182,000 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,103.7 |  |  | 2,926.7 |  |  | 2,770.9 |  |  | 986.7 |  |  | 143,000 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,767.7 |  |  | 3,385.5 |  |  | 1,765.5 |  |  | 149,000 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,461.3 |  |  | 3,324.3 |  |  | 135,000 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 25,087.1 |  |  |  |  |
| Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance |  |  |  |
| Unaudited |  | As of December 31, |  |  |  |
| As of December 31, |  |  |  |  |
Accident Year | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  |  |  |
2014 | $ | 331.0 |  |  | $ | 656.1 |  |  | $ | 891.0 |  |  | $ | 1,058.2 |  |  | $ | 1,163.3 |  |  | $ | 1,246.9 |  |  | $ | 1,290.0 |  |  | $ | 1,315.7 |  |  | $ | 1,347.1 |  |  | $ | 1,365.4 |  |  |  |  |
2015 |  |  | 321.8 |  |  | 663.0 |  |  | 874.0 |  |  | 1,037.7 |  |  | 1,147.1 |  |  | 1,215.0 |  |  | 1,266.8 |  |  | 1,299.4 |  |  | 1,335.3 |  |  |  |  |
2016 |  |  |  |  | 371.3 |  |  | 750.0 |  |  | 979.0 |  |  | 1,164.5 |  |  | 1,269.7 |  |  | 1,357.6 |  |  | 1,434.0 |  |  | 1,488.3 |  |  |  |  |
2017 |  |  |  |  |  |  | 437.2 |  |  | 988.2 |  |  | 1,281.2 |  |  | 1,469.8 |  |  | 1,628.1 |  |  | 1,749.7 |  |  | 1,850.1 |  |  |  |  |
2018 |  |  |  |  |  |  |  |  | 494.1 |  |  | 1,023.8 |  |  | 1,292.9 |  |  | 1,507.0 |  |  | 1,684.4 |  |  | 1,871.4 |  |  |  |  |
2019 |  |  |  |  |  |  |  |  |  |  | 526.0 |  |  | 995.8 |  |  | 1,269.8 |  |  | 1,584.0 |  |  | 1,920.3 |  |  |  |  |
2020 |  |  |  |  |  |  |  |  |  |  |  |  | 571.2 |  |  | 1,155.2 |  |  | 1,525.0 |  |  | 1,783.2 |  |  |  |  |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 475.0 |  |  | 989.7 |  |  | 1,363.0 |  |  |  |  |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 486.2 |  |  | 1,063.6 |  |  |  |  |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 598.9 |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 14,639.5 |  |  |  |  |
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2014, net of reinsurance |  | 258.2 |  |  |  |  |
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance |  | $ | 10,705.8 |  |  |  |  |
Variability in claim counts is primarily attributable to claim counts on pet health liability, a product which has a high claim frequency and low claim severity. The Company did not write this product from 2014 to 2016. Additionally, there was an elevated number of claims on this product line in 2018, 2019 and 2020. The related net incurred losses and allocated loss adjustment expenses are not material to the Insurance segment. Reinsurance Segment
| Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance |  | Total of Incurred-but-Not-Reported Liabilities, Net of Reinsurance |  |
| Unaudited |  | As of December 31, |  |
(dollars in millions) | As of December 31, |  |  |
Accident Year | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | December 31, 2023 |  |
2014 | $ | 572.6 |  |  | $ | 557.1 |  |  | $ | 529.5 |  |  | $ | 571.8 |  |  | $ | 550.4 |  |  | $ | 526.9 |  |  | $ | 511.3 |  |  | $ | 512.7 |  |  | $ | 508.1 |  |  | $ | 477.1 |  |  | $ | 46.0 |  |  |
2015 |  |  | 525.3 |  |  | 511.2 |  |  | 528.1 |  |  | 519.3 |  |  | 508.1 |  |  | 502.8 |  |  | 490.5 |  |  | 490.7 |  |  | 503.2 |  |  | 81.9 |  |  |
2016 |  |  |  |  | 513.8 |  |  | 523.6 |  |  | 523.0 |  |  | 521.3 |  |  | 531.1 |  |  | 554.8 |  |  | 558.3 |  |  | 580.3 |  |  | 62.7 |  |  |
2017 |  |  |  |  |  |  | 899.5 |  |  | 932.5 |  |  | 937.8 |  |  | 939.0 |  |  | 911.0 |  |  | 923.0 |  |  | 934.8 |  |  | 80.3 |  |  |
2018 |  |  |  |  |  |  |  |  | 748.1 |  |  | 772.9 |  |  | 765.5 |  |  | 770.0 |  |  | 765.7 |  |  | 829.3 |  |  | 157.8 |  |  |
2019 |  |  |  |  |  |  |  |  |  |  | 661.6 |  |  | 675.5 |  |  | 689.2 |  |  | 700.2 |  |  | 726.1 |  |  | 174.2 |  |  |
2020 |  |  |  |  |  |  |  |  |  |  |  |  | 681.3 |  |  | 735.0 |  |  | 745.2 |  |  | 764.7 |  |  | 286.6 |  |  |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 738.6 |  |  | 739.7 |  |  | 760.8 |  |  | 379.3 |  |  |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 664.2 |  |  | 604.5 |  |  | 483.0 |  |  |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 660.6 |  |  | 607.2 |  |  |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 6,841.4 |  |  |  |  |
| Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance |  |  |  |
| Unaudited |  | As of December 31, |  |  |  |
| As of December 31, |  |  |  |  |
Accident Year | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  |  |  |
2014 | $ | 97.6 |  |  | $ | 156.4 |  |  | $ | 222.5 |  |  | $ | 269.5 |  |  | $ | 306.0 |  |  | $ | 339.6 |  |  | $ | 357.3 |  |  | $ | 373.9 |  |  | $ | 384.3 |  |  | $ | 398.1 |  |  |  |  |
2015 |  |  | 63.7 |  |  | 132.0 |  |  | 204.1 |  |  | 255.0 |  |  | 302.3 |  |  | 327.2 |  |  | 347.1 |  |  | 364.0 |  |  | 380.2 |  |  |  |  |
2016 |  |  |  |  | 79.3 |  |  | 168.8 |  |  | 239.3 |  |  | 295.8 |  |  | 347.8 |  |  | 381.6 |  |  | 421.9 |  |  | 455.7 |  |  |  |  |
2017 |  |  |  |  |  |  | 157.6 |  |  | 358.5 |  |  | 480.0 |  |  | 562.1 |  |  | 625.7 |  |  | 694.9 |  |  | 749.9 |  |  |  |  |
2018 |  |  |  |  |  |  |  |  | 87.1 |  |  | 240.5 |  |  | 341.3 |  |  | 411.3 |  |  | 481.5 |  |  | 551.0 |  |  |  |  |
2019 |  |  |  |  |  |  |  |  |  |  | 53.6 |  |  | 172.3 |  |  | 266.3 |  |  | 357.4 |  |  | 441.5 |  |  |  |  |
2020 |  |  |  |  |  |  |  |  |  |  |  |  | 94.0 |  |  | 204.6 |  |  | 311.1 |  |  | 384.5 |  |  |  |  |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 79.6 |  |  | 188.4 |  |  | 284.0 |  |  |  |  |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 24.2 |  |  | 66.9 |  |  |  |  |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 27.3 |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 3,739.1 |  |  |  |  |
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2014, net of reinsurance |  | 210.1 |  |  |  |  |
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance |  | $ | 3,312.4 |  |  |  |  |
The following table presents supplementary information about average historical claims duration as of December 31, 2023 based on the cumulative incurred and paid losses and allocated loss adjustment expenses presented above.
| Average Annual Percentage Payout of Incurred Losses by Age (in Years), Net of Reinsurance
Unaudited | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Insurance | 19.4 | % |  | 21.2 | % |  | 13.3 | % |  | 10.4 | % |  | 8.2 | % |  | 5.8 | % |  | 3.9 | % |  | 2.4 | % |  | 2.3 | % |  | 1.3 | %
Reinsurance | 11.2 | % |  | 14.8 | % |  | 13.1 | % |  | 9.9 | % |  | 8.8 | % |  | 6.7 | % |  | 5.1 | % |  | 4.2 | % |  | 2.7 | % |  | 2.9 | %
The following table reconciles the net incurred and paid loss development tables to the liability for losses and loss adjustment expenses on the consolidated balance sheet.
(dollars in thousands) | December 31, 2023
Net outstanding liabilities |
Insurance segment | $ | 10,705,776 |
Reinsurance segment | 3,312,405 |
Other underwriting | 71,575 |
Program services and other fronting | 10,092 |
Markel CATCo Re (see note 17) | 184,967 |
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance | 14,284,815 |
Reinsurance recoverable on unpaid losses |
Insurance segment | 3,168,100 |
Reinsurance segment | 387,366 |
Other underwriting | 88,701 |
Program services and other fronting | 5,176,400 |
Total reinsurance recoverable on unpaid losses | 8,820,567 |
Unallocated loss adjustment expenses | 377,939 |
Total gross liability for unpaid losses and loss adjustment expenses | $ | 23,483,321 |
e) The Company has exposure to asbestos and environmental (A&E) claims primarily resulting from policies written by acquired insurance operations before their acquisition by the Company. The Company's exposure to A&E claims originated from umbrella, excess and commercial general liability insurance policies and assumed reinsurance contracts that were written on an occurrence basis from the 1970s to mid-1980s. Exposure also originated from claims-made policies that were designed to cover environmental risks provided that all other terms and conditions of the policy were met. A&E claims include property damage and clean-up costs related to pollution, as well as personal injury allegedly arising from exposure to hazardous materials. Development on A&E loss reserves is monitored separately from the Company's ongoing underwriting operations and is not included in a reportable segment. At December 31, 2023, A&E reserves were $132.5 million and $39.6 million on a gross and net basis, respectively. At December 31, 2022, A&E reserves were $153.2 million and $54.5 million on a gross and net basis, respectively. The Company's reserves for losses and loss adjustment expenses related to A&E exposures represent management's best estimate of ultimate settlement values based on statistical analysis of these reserves by the Company's actuaries. A&E exposures are subject to significant uncertainty due to potential loss severity and frequency resulting from the uncertain and unfavorable legal climate. A&E reserves could be subject to increases in the future, however, management believes the Company's gross and net A&E reserves at December 31, 2023 are adequate.

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