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Reserve For Losses, LAE And Future Policy Benefit Reserve

9 Months Ended

Sep. 30, 2019

Reserve For Losses LAE And Future Policy Benefit Reserve [Abstract]

Reserve For Losses LAE And Future Policy Benefit Reserve

5. RESERVE FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

Activity in the reserve for losses and LAE is summarized for the periods indicated:

	Nine Months Ended
	September 30,
(Dollars in thousands)	2019		2018
Gross reserves beginning of period	$	13,119,090	$	11,884,321
Less reinsurance recoverables		(1,619,641)		(1,212,649)
Net reserves beginning of period		11,499,449		10,671,672

Incurred related to:
Current year		3,559,505		3,218,162
Prior years		(44,401)		432,187
Total incurred losses and LAE		3,515,104		3,650,349

Paid related to:
Current year		550,724		724,791
Prior years		2,406,753		2,730,015
Total paid losses and LAE		2,957,477		3,454,806

Foreign exchange/translation adjustment		(52,125)		(78,103)

Net reserves end of period		12,004,952		10,789,112
Plus reinsurance recoverables		1,632,687		1,601,041
Gross reserves end of period	$	13,637,639	$	12,390,153

(Some amounts may not reconcile due to rounding.)

Incurred prior years losses decreased by $44,401 thousand for the nine months ended September 30, 2019 and increased by $432,187 thousand for the nine months ended September 30, 2018. The $44,401 thousand decrease for the nine months ended September 30, 2019, primarily related to reserve reductions associated with the early commutation of a multi-year contract. The increase for the nine months ended September 30, 2018 was mainly due to $532,156 thousand of adverse development on prior years catastrophe losses, primarily related to Hurricanes Harvey, Irma and Maria, as well as the 2017 California wildfires. The increase in loss estimates for Hurricanes Harvey, Irma and Maria was mostly driven by re-opened claims, loss inflation from higher than expected loss adjustment expenses and in particular, their impact on aggregate covers. This reserve increase was partially offset by $99,968 thousand of favorable development on prior years attritional losses which mainly related to U.S. and international property and casualty reinsurance business.