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RESERVE FOR LOSSES AND LAE | 12 Months Ended
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Dec. 31, 2024
Insurance [Abstract] |
RESERVE FOR LOSSES AND LAE | RESERVE FOR LOSSES AND LAE Reserve for losses and LAE. The following table provides a roll forward of the Company’s beginning and ending reserve for losses and LAE and is summarized for the periods indicated:
| Years Ended December 31,
(Dollars in millions) | 2024 |  | 2023 |  | 2022
Gross reserves beginning of period | $ | 24,604 |  |  | $ | 22,065 |  |  | $ | 19,009 |
Less reinsurance recoverables on unpaid losses | (2,098) |  |  | (2,105) |  |  | (1,946) |
Net reserves beginning of period | 22,506 |  |  | 19,960 |  |  | 17,063 |
Incurred related to: |  |  |  |  |
Current year | 9,967 |  |  | 8,432 |  |  | 8,102 |
Prior years | 1,337 |  |  | (5) |  |  | (2) |
Total incurred losses and LAE | 11,305 |  |  | 8,427 |  |  | 8,100 |
Paid related to: |  |  |  |  |
Current year | 1,258 |  |  | 1,379 |  |  | 1,220 |
Prior years | 5,279 |  |  | 4,731 |  |  | 3,740 |
Total paid losses and LAE | 6,537 |  |  | 6,110 |  |  | 4,960 |
Foreign exchange/translation adjustment | (298) |  |  | 229 |  |  | (243) |
Net reserves end of period | 26,975 |  |  | 22,506 |  |  | 19,960 |
Plus reinsurance recoverables on unpaid losses | 2,915 |  |  | 2,098 |  |  | 2,105 |
Gross reserves end of period | $ | 29,889 |  |  | $ | 24,604 |  |  | $ | 22,065 |
(Some amounts may not reconcile due to rounding.) Current year incurred losses were $10.0 billion, $8.4 billion and $8.1 billion in 2024, 2023 and 2022, respectively. The increase in current year incurred losses from 2023 to 2024 was primarily related to an increase of $1.1 billion in current year attritional losses, resulting from the impact of the increase in premiums earned and changes in the mix of business, as well as an increase of $423 million in current year catastrophe losses. Gross and net reserves increased in 2023, reflecting an increase in underlying exposure due to premium growth, year over year and changes in the mix of business, partially offset by a decrease of $585 million in 2023 current year catastrophe losses compared to 2022. Incurred prior years unfavorable development in losses was $1.3 billion in 2024. Incurred prior years favorable development in losses was $5 million in 2023 and $2 million in 2022. The net unfavorable development on prior year reserves of $1.3 billion in 2024 is primarily comprised of $1.1 billion of unfavorable development on prior years attritional losses for the Insurance segment, mainly driven by a combination of social inflation and portfolio concentrations in certain U.S. casualty lines and $403 million of unfavorable development on prior years attritional losses for Other segment, mainly related to certain sports and leisure lines for accident years 2019 through 2023, including A&E reserve strengthening of $54 million resulting in a 3-year net asbestos survival ratio of 7 years. In addition, the Reinsurance segment recorded $684 million of unfavorable development on prior year casualty reserves. This unfavorable development in the Reinsurance segment was largely offset by favorable development booked on property and mortgage lines. The net favorable development on prior year reserves of $5 million in 2023 is comprised of $401 million of favorable development on prior years attritional losses for reinsurance lines, mainly related to mortgage and short-tail lines of business, mostly offset by $285 million of unfavorable development on prior years attritional losses for insurance lines, mainly related to casualty lines for accident years from 2016 through 2019 as well as $110 million of unfavorable development on prior years attritional losses for other lines. The favorable development on prior year reserves of $2 million in 2022 is primarily driven by better than expected loss emergence in workers’ compensation and surety lines of business, as well as attritional property. The following is information about incurred and paid claims development as of December 31, 2024, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. Each of the Company’s financial reporting segments has been disaggregated into casualty and property business. The casualty and property segregation results in groups that have homogeneous loss development characteristics and are large enough to represent credible trends. Generally, casualty claims take longer to be reported and settled, resulting in longer payout patterns and increased volatility. Property claims on the other hand, tend to be reported and settled quicker and therefore tend to exhibit less volatility. The property business is more exposed to catastrophe losses, which can result in year over year fluctuations in incurred claims depending on the frequency and severity of catastrophes claims in any one accident year. The information about incurred and paid claims development for the years ended December 31, 2015 to December 31, 2023 is presented as supplementary information. The Cumulative Number of Reported Claims is shown only for Insurance Casualty as it is impractical to provide the information for the remaining groups. The reinsurance groups each include pro rata contracts for which ceding companies provide only summary information via a bordereau. This summary information does not include the number of reported claims underlying the paid and reported losses. Therefore, it is not possible to provide this information. The Insurance Property group includes Accident and Health insurance business. This business is written via a master contract and individual claim counts are not provided. This business represents a significant enough portion of the business in the Insurance Property group so that including the number of reported claims for the remaining business would distort any analytics performed on the group. The Cumulative Number of Reported Claims shown for the Insurance Casualty is determined by claim and line of business. For example, a claim event with three claimants in the same line of business is a single claim. However, a claim event with a single claimant that spans two lines of business contributes two claims. Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated statement of financial position is as follows:
| December 31, 2024
(Dollars in millions) |
Net outstanding liabilities |
Reinsurance Casualty | $ | 12,810 |
Reinsurance Property | 6,028 |
Insurance Casualty | 5,891 |
Insurance Property | 762 |
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance (1) | 25,491 |
Reinsurance recoverable on unpaid claims |
Reinsurance Casualty | 73 |
Reinsurance Property | 624 |
Insurance Casualty | 1,750 |
Insurance Property | 237 |
Total reinsurance recoverable on unpaid claims (1) | 2,683 |
Insurance lines other than short-duration | — |
Unallocated claims adjustment expenses | 316 |
Other (2) | 1,400 |
| 1,716 |
Total gross liability for unpaid claims and claim adjustment expense | $ | 29,889 |
(Some amounts may not reco ncile due to rounding.) (1) Amounts disclosed are for reinsurance and insurance reportable segments. (2) The other amount is primarily comprised of the new Other segment, which includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses. The following tables present the ultimate loss and allocated LAE and the paid loss and allocated LAE, net of reinsurance for casualty and property, as well as the average annual percentage payout of incurred claims by age, net of reinsurance for each of our disclosed lines of business. Reinsurance - Casualty Business
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | At December 31, 2024
|  | Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024 |  |
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 777 |  |  | $ | 821 |  |  | $ | 818 |  |  | $ | 815 |  |  | $ | 799 |  |  | $ | 835 |  |  | $ | 835 |  |  | $ | 833 |  |  | $ | 832 |  |  | $ | 845 |  |  | $ | 45 |  |  | N/A
2016 |  |  |  | 792 |  |  | 870 |  |  | 867 |  |  | 862 |  |  | 938 |  |  | 940 |  |  | 970 |  |  | 1,000 |  |  | 1,022 |  |  | 52 |  |  | N/A
2017 |  |  |  |  |  | 875 |  |  | 834 |  |  | 841 |  |  | 922 |  |  | 931 |  |  | 986 |  |  | 1,051 |  |  | 1,079 |  |  | 24 |  |  | N/A
2018 |  |  |  |  |  |  |  | 1,447 |  |  | 1,445 |  |  | 1,522 |  |  | 1,553 |  |  | 1,621 |  |  | 1,718 |  |  | 1,775 |  |  | 246 |  |  | N/A
2019 |  |  |  |  |  |  |  |  |  | 1,761 |  |  | 1,826 |  |  | 1,828 |  |  | 1,853 |  |  | 1,893 |  |  | 1,954 |  |  | 346 |  |  | N/A
2020 |  |  |  |  |  |  |  |  |  |  |  | 1,957 |  |  | 1,928 |  |  | 1,907 |  |  | 1,869 |  |  | 1,911 |  |  | 588 |  |  | N/A
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,491 |  |  | 2,487 |  |  | 2,427 |  |  | 2,518 |  |  | 1,229 |  |  | N/A
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,730 |  |  | 2,688 |  |  | 2,739 |  |  | 1,658 |  |  | N/A
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,958 |  |  | 3,123 |  |  | 2,315 |  |  | N/A
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,275 |  |  | 2,756 |  |  | N/A
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 20,240 |  |  |  |  |
(Some amounts may not reconcile due to rounding.)
|  | Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31,
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 56 |  |  | $ | 158 |  |  | $ | 265 |  |  | $ | 410 |  |  | $ | 499 |  |  | $ | 567 |  |  | $ | 613 |  |  | $ | 650 |  |  | $ | 677 |  |  | $ | 702 |
2016 |  |  |  | 89 |  |  | 189 |  |  | 323 |  |  | 429 |  |  | 542 |  |  | 618 |  |  | 693 |  |  | 762 |  |  | 826 |
2017 |  |  |  |  |  | 80 |  |  | 186 |  |  | 317 |  |  | 458 |  |  | 582 |  |  | 681 |  |  | 790 |  |  | 917 |
2018 |  |  |  |  |  |  |  | 188 |  |  | 296 |  |  | 497 |  |  | 652 |  |  | 828 |  |  | 1,008 |  |  | 1,214 |
2019 |  |  |  |  |  |  |  |  |  | 239 |  |  | 364 |  |  | 533 |  |  | 735 |  |  | 963 |  |  | 1,234 |
2020 |  |  |  |  |  |  |  |  |  |  |  | 205 |  |  | 307 |  |  | 486 |  |  | 720 |  |  | 987 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 206 |  |  | 319 |  |  | 542 |  |  | 845 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 184 |  |  | 345 |  |  | 646 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 201 |  |  | 422 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 256 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 8,048 |
All outstanding liabilities prior to 2015, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 617 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 12,810 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited)
Years | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Casualty | 8.4 | % |  | 6.7 | % |  | 10.4 | % |  | 11.6 | % |  | 11.6 | % |  | 10.4 | % |  | 9.2 | % |  | 7.9 | % |  | 4.9 | % |  | 2.9 | %
Reinsurance - Property Business
|  |  |  | At December 31, 2024
|  | Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024 |  |
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 1,378 |  |  | $ | 1,037 |  |  | $ | 956 |  |  | $ | 930 |  |  | $ | 933 |  |  | $ | 925 |  |  | $ | 927 |  |  | $ | 924 |  |  | $ | 921 |  |  | $ | 911 |  |  | $ | — |  |  | N/A
2016 |  |  |  | 1,681 |  |  | 1,502 |  |  | 1,538 |  |  | 1,532 |  |  | 1,510 |  |  | 1,511 |  |  | 1,507 |  |  | 1,509 |  |  | 1,502 |  |  | 1 |  |  | N/A
2017 |  |  |  |  |  | 2,773 |  |  | 3,396 |  |  | 3,507 |  |  | 3,636 |  |  | 3,681 |  |  | 3,692 |  |  | 3,705 |  |  | 3,724 |  |  | 3 |  |  | N/A
2018 |  |  |  |  |  |  |  | 2,594 |  |  | 2,469 |  |  | 2,471 |  |  | 2,409 |  |  | 2,362 |  |  | 2,347 |  |  | 2,382 |  |  | 3 |  |  | N/A
2019 |  |  |  |  |  |  |  |  |  | 2,005 |  |  | 2,036 |  |  | 1,981 |  |  | 1,866 |  |  | 1,869 |  |  | 1,920 |  |  | 2 |  |  | N/A
2020 |  |  |  |  |  |  |  |  |  |  |  | 2,388 |  |  | 2,461 |  |  | 2,405 |  |  | 2,377 |  |  | 2,379 |  |  | 3 |  |  | N/A
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,745 |  |  | 2,770 |  |  | 2,692 |  |  | 2,582 |  |  | 14 |  |  | N/A
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,202 |  |  | 2,880 |  |  | 2,586 |  |  | 261 |  |  | N/A
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,788 |  |  | 2,411 |  |  | 662 |  |  | N/A
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,940 |  |  | 2,214 |  |  | N/A
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 24,337 |  |  |  |  |
(Some amounts may not reconcile due to rounding.)
|  | Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31,
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 369 |  |  | $ | 591 |  |  | $ | 740 |  |  | $ | 823 |  |  | $ | 850 |  |  | $ | 871 |  |  | $ | 879 |  |  | $ | 884 |  |  | $ | 888 |  |  | $ | 889 |
2016 |  |  |  | 459 |  |  | 946 |  |  | 1,056 |  |  | 1,080 |  |  | 1,089 |  |  | 1,081 |  |  | 1,082 |  |  | 1,084 |  |  | 1,128 |
2017 |  |  |  |  |  | 810 |  |  | 2,170 |  |  | 2,733 |  |  | 3,117 |  |  | 3,313 |  |  | 3,407 |  |  | 3,482 |  |  | 3,590 |
2018 |  |  |  |  |  |  |  | 534 |  |  | 1,509 |  |  | 1,857 |  |  | 2,047 |  |  | 2,121 |  |  | 2,184 |  |  | 2,307 |
2019 |  |  |  |  |  |  |  |  |  | 714 |  |  | 1,159 |  |  | 1,482 |  |  | 1,645 |  |  | 1,771 |  |  | 1,934 |
2020 |  |  |  |  |  |  |  |  |  |  |  | 571 |  |  | 1,302 |  |  | 1,706 |  |  | 1,989 |  |  | 2,251 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 679 |  |  | 1,523 |  |  | 2,014 |  |  | 2,420 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 619 |  |  | 1,364 |  |  | 1,896 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 600 |  |  | 1,165 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 774 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 18,355 |
All outstanding liabilities prior to 2015, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | 46 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 6,028 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited)
Years | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Property | 25.2 | % |  | 31.2 | % |  | 16.2 | % |  | 10.0 | % |  | 5.4 | % |  | 3.2 | % |  | 2.4 | % |  | 1.9 | % |  | 2.0 | % |  | 0.2 | %
Insurance - Casualty Business
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | At December 31, 2024
|  | Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024 |  |
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 487 |  |  | $ | 492 |  |  | $ | 500 |  |  | $ | 503 |  |  | $ | 427 |  |  | $ | 426 |  |  | $ | 427 |  |  | $ | 434 |  |  | $ | 426 |  |  | $ | 445 |  |  | $ | 11 |  |  | 27,331 |
2016 |  |  |  | 504 |  |  | 510 |  |  | 538 |  |  | 557 |  |  | 489 |  |  | 474 |  |  | 478 |  |  | 488 |  |  | 494 |  |  | 17 |  |  | 31,267 |
2017 |  |  |  |  |  | 559 |  |  | 557 |  |  | 567 |  |  | 585 |  |  | 559 |  |  | 559 |  |  | 584 |  |  | 580 |  |  | 32 |  |  | 34,793 |
2018 |  |  |  |  |  |  |  | 643 |  |  | 648 |  |  | 679 |  |  | 685 |  |  | 697 |  |  | 772 |  |  | 811 |  |  | 64 |  |  | 34,838 |
2019 |  |  |  |  |  |  |  |  |  | 774 |  |  | 777 |  |  | 797 |  |  | 804 |  |  | 953 |  |  | 1,089 |  |  | 145 |  |  | 37,837 |
2020 |  |  |  |  |  |  |  |  |  |  |  | 912 |  |  | 989 |  |  | 977 |  |  | 975 |  |  | 1,096 |  |  | 273 |  |  | 39,675 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,117 |  |  | 1,159 |  |  | 1,153 |  |  | 1,353 |  |  | 464 |  |  | 44,458 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,241 |  |  | 1,239 |  |  | 1,597 |  |  | 739 |  |  | 46,433 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,424 |  |  | 1,740 |  |  | 1,125 |  |  | 44,372 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,788 |  |  | 1,546 |  |  | 33,512 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 10,993 |  |  |  |  |
(Some amounts may not reconcile due to rounding.)
|  | Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31,
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 43 |  |  | $ | 127 |  |  | $ | 208 |  |  | $ | 270 |  |  | $ | 325 |  |  | $ | 351 |  |  | $ | 379 |  |  | $ | 397 |  |  | $ | 409 |  |  | $ | 417 |
2016 |  |  |  | 51 |  |  | 156 |  |  | 253 |  |  | 314 |  |  | 362 |  |  | 398 |  |  | 430 |  |  | 448 |  |  | 460 |
2017 |  |  |  |  |  | 52 |  |  | 165 |  |  | 263 |  |  | 343 |  |  | 404 |  |  | 467 |  |  | 493 |  |  | 527 |
2018 |  |  |  |  |  |  |  | 61 |  |  | 196 |  |  | 296 |  |  | 407 |  |  | 539 |  |  | 623 |  |  | 678 |
2019 |  |  |  |  |  |  |  |  |  | 69 |  |  | 218 |  |  | 364 |  |  | 498 |  |  | 646 |  |  | 828 |
2020 |  |  |  |  |  |  |  |  |  |  |  | 63 |  |  | 229 |  |  | 372 |  |  | 531 |  |  | 659 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 105 |  |  | 246 |  |  | 428 |  |  | 655 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 79 |  |  | 282 |  |  | 578 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 93 |  |  | 311 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 85 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 5,200 |
All outstanding liabilities prior to 2015, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | 97 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 5,891 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited)
Years | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Casualty | 6.4 | % |  | 14.3 | % |  | 15.3 | % |  | 14.2 | % |  | 12.7 | % |  | 11.5 | % |  | 6.1 | % |  | 4.6 | % |  | 2.6 | % |  | 1.9 | %
Insurance - Property Business
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | At December 31, 2024
|  | Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024 |  |
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 179 |  |  | $ | 169 |  |  | $ | 159 |  |  | $ | 160 |  |  | $ | 161 |  |  | $ | 162 |  |  | $ | 163 |  |  | $ | 165 |  |  | $ | 164 |  |  | $ | 165 |  |  | $ | 1 |  |  | N/A
2016 |  |  |  | 289 |  |  | 281 |  |  | 284 |  |  | 292 |  |  | 297 |  |  | 299 |  |  | 300 |  |  | 302 |  |  | 301 |  |  | 2 |  |  | N/A
2017 |  |  |  |  |  | 486 |  |  | 494 |  |  | 486 |  |  | 494 |  |  | 496 |  |  | 508 |  |  | 509 |  |  | 506 |  |  | 1 |  |  | N/A
2018 |  |  |  |  |  |  |  | 403 |  |  | 399 |  |  | 401 |  |  | 410 |  |  | 428 |  |  | 436 |  |  | 435 |  |  | 3 |  |  | N/A
2019 |  |  |  |  |  |  |  |  |  | 347 |  |  | 352 |  |  | 350 |  |  | 365 |  |  | 380 |  |  | 375 |  |  | 6 |  |  | N/A
2020 |  |  |  |  |  |  |  |  |  |  |  | 601 |  |  | 508 |  |  | 498 |  |  | 503 |  |  | 492 |  |  | 10 |  |  | N/A
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 646 |  |  | 585 |  |  | 602 |  |  | 628 |  |  | 37 |  |  | N/A
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 770 |  |  | 796 |  |  | 698 |  |  | 42 |  |  | N/A
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 717 |  |  | 669 |  |  | 94 |  |  | N/A
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 597 |  |  | 192 |  |  | N/A
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,864 |  |  |  |  |
(Some amounts may not reconcile due to rounding.)
|  | Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31,
Accident Year |  | 2015 (unaudited) |  | 2016 (unaudited) |  | 2017 (unaudited) |  | 2018 (unaudited) |  | 2019 (unaudited) |  | 2020 (unaudited) |  | 2021 (unaudited) |  | 2022 (unaudited) |  | 2023 (unaudited) |  | 2024
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  | $ | 107 |  |  | $ | 153 |  |  | $ | 155 |  |  | $ | 158 |  |  | $ | 160 |  |  | $ | 161 |  |  | $ | 162 |  |  | $ | 163 |  |  | $ | 163 |  |  | $ | 164 |
2016 |  |  |  | 167 |  |  | 249 |  |  | 272 |  |  | 290 |  |  | 296 |  |  | 297 |  |  | 299 |  |  | 299 |  |  | 299 |
2017 |  |  |  |  |  | 176 |  |  | 416 |  |  | 452 |  |  | 477 |  |  | 493 |  |  | 505 |  |  | 504 |  |  | 505 |
2018 |  |  |  |  |  |  |  | 240 |  |  | 356 |  |  | 376 |  |  | 407 |  |  | 424 |  |  | 429 |  |  | 431 |
2019 |  |  |  |  |  |  |  |  |  | 226 |  |  | 313 |  |  | 335 |  |  | 355 |  |  | 363 |  |  | 368 |
2020 |  |  |  |  |  |  |  |  |  |  |  | 292 |  |  | 413 |  |  | 450 |  |  | 465 |  |  | 473 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  | 325 |  |  | 482 |  |  | 544 |  |  | 565 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 377 |  |  | 567 |  |  | 594 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 400 |  |  | 503 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 200 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,102 |
All outstanding liabilities prior to 2015, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | — |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | 762 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited)
Years | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Property | 54.0 | % |  | 30.4 | % |  | 6.3 | % |  | 4.6 | % |  | 2.5 | % |  | 1.4 | % |  | 0.3 | % |  | 0.1 | % |  | — | % |  | 0.3 | %
Reserving Methodology The Company maintains reserves equal to management’s estimated ultimate liability for losses and LAE for reported and unreported claims for our insurance and reinsurance businesses. Because reserves are based on estimates of ultimate losses and LAE by underwriting or accident year, the Company uses a variety of statistical and actuarial techniques to monitor reserve adequacy over time, evaluate new information as it becomes known and adjust reserves whenever an adjustment appears warranted. The Company considers many factors when setting reserves including: (1) exposure base and projected ultimate premium; (2) expected loss ratios by product and class of business, which are developed collaboratively by underwriters and actuaries; (3) actuarial methodologies and assumptions which analyze loss reporting and payment experience, reports from ceding companies and historical trends, such as reserving patterns, loss payments and product mix; (4) current legal interpretations of coverage and liability; and (5) economic conditions. Management’s best estimate is developed through collaboration with actuarial, underwriting, claims, legal and finance departments and culminates with the input of reserve committees. Each segment reserve committee includes the participation of the relevant parties from actuarial, finance, claims and segment senior management. Reserves are further reviewed by Everest’s Chief Reserving Actuary and senior management. The objective of such process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability. Actual loss and LAE ultimately paid may deviate, perhaps substantially, from such reserves. Net income will be impacted in a period in which the change in estimated ultimate loss and LAE is recorded. The detailed data required to evaluate ultimate losses for the Company’s insurance business is accumulated from its underwriting and claim systems. Reserving for reinsurance requires evaluation of loss information received from ceding companies. Ceding companies report losses in many forms depending on the type of contract and the agreed or contractual reporting requirements. Generally, pro rata contracts require the submission of a monthly/quarterly account, which includes premium and loss activity for the period with corresponding reserves as established by the ceding company. This information is recorded in the Company’s records. For certain pro rata contracts, the Company may require a detailed loss report for claims that exceed a certain dollar threshold or relate to a particular type of loss. Excess of loss and facultative contracts generally require individual loss reporting with precautionary notices provided when a loss reaches a significant percentage of the attachment point of the contract or when certain causes of loss or types of injury occur. Experienced Claims staff handle individual loss reports and supporting claim information. Based on evaluation of a claim, the Company may establish additional case reserves in addition to the case reserves reported by the ceding company. To ensure ceding companies are submitting required and accurate data, Everest’s Underwriting, Claim, Reinsurance Accounting and Internal Audit departments perform various reviews of ceding companies, particularly larger ceding companies, including on-site audits. The Company segments both reinsurance and insurance reserves into exposure groupings for actuarial analysis. The Company assigns business to exposure groupings so that the underlying exposures have reasonably homogeneous loss development characteristics and are large enough to facilitate credible estimation of ultimate losses. The Company periodically reviews its exposure groupings and may change groupings over time as business changes. The Company currently uses approximately 250 exposure groupings to develop reserve estimates. One of the key selection characteristics for the exposure groupings is the historical duration of the claims settlement process. Business in which claims are reported and settled relatively quickly are commonly referred to as short tail lines, principally property lines. Casualty claims tend to take longer to be reported and settled and casualty lines are generally referred to as long tail lines. Estimates of ultimate losses for shorter tail lines, with the exception of loss estimates for large catastrophic events, generally exhibit less uncertainty than those for the longer tail lines. The Company uses a variety of actuarial methodologies, such as the expected loss ratio method, chain ladder methods and Bornhuetter-Ferguson methods, supplemented by judgment where appropriate, to estimate ultimate loss and LAE for each exposure group. Expected Loss Ratio Method: The expected loss ratio method uses earned premium times an expected loss ratio to calculate ultimate losses for a given underwriting or accident year. This method relies entirely on expectation to project ultimate losses with no consideration given to actual losses. As such, it may be appropriate for an immature underwriting or accident year where few, if any, losses have been reported or paid, but less appropriate for a more mature year. Chain Ladder Method: Chain ladder methods use a standard loss development triangle to project ultimate losses. Age-to-age development factors are selected for each development period and combined to calculate age-to-ultimate development factors which are then applied to paid or reported losses to project ultimate losses. This method relies entirely on actual paid or reported losses to project ultimate losses. No other factors such as changes in pricing or other expectations are taken into account. It is most appropriate for groups with homogeneous, stable experience where past development patterns are expected to continue in the future. It is least appropriate for groups which have changed significantly over time, or which are more volatile. Bornhuetter-Ferguson Method: The Bornhuetter-Ferguson method is a combination of the expected loss ratio method and the chain ladder method. Ultimate losses are projected based partly on actual paid or reported losses and partly on expectation. IBNR reserves are calculated using earned premium, an a priori loss ratio and selected age-to-age development factors and added to actual reported (paid) losses to determine ultimate losses. It is more responsive to actual reported or paid development than the expected loss ratio method but less responsive than the chain ladder method. For both short and long tail lines, the Company supplements these general approaches with analytically based judgments. Although the Company uses similar actuarial methods for both short tail and long tail lines, the faster reporting of experience for the short tail lines allows the Company to have greater confidence in its estimates of ultimate losses at an earlier stage than for long tail lines. For immature underwriting or accident years, the initial expected loss ratios are key inputs that involve management’s judgment and are based on a variety of factors, including: (1) expected loss ratios developed during the Company’s pricing process; (2) historical loss ratios adjusted for rate change and trend; and (3) industry benchmarks for similar business. These judgments take into account management’s view of past, current and future factors that may influence ultimate losses, including: (1) market conditions; (2) changes in the business underwritten; (3) changes in timing of the emergence of claims; and (4) other factors. The determination of when reported losses are sufficient and credible to warrant selection of an ultimate loss ratio different from the initial expected loss ratio also requires judgment. Carried reserves at each reporting date are the management’s best estimate of ultimate unpaid losses and LAE at that date. The Company completes detailed reserve studies for each exposure group annually for both reinsurance and insurance operations. The completed annual reserve studies are “rolled-forward” for each accounting period until the subsequent reserve study is completed. Analyzing the roll-forward process involves comparing actual reported losses to expected losses based on the most recent reserve study. The Company analyzes significant variances between actual and expected losses and post adjustments to its reserves as warranted. Certain reserves, including losses from widespread catastrophic events and COVID-19 related losses, cannot be estimated using traditional actuarial methods. Rather, loss and LAE reserves are estimated by management by completing an in-depth analysis of the individual contracts which may potentially be impacted by the loss. The analysis uses inputs from various sources and methodology, to build up a comprehensive perspective. Such analysis generally involves: (1) estimating the size of insured industry losses; (2) reviewing portfolios to identify contracts which are exposed; (3) reviewing information reported or otherwise provided by customers and brokers; (4) discussing the loss with customers and brokers; and (5) estimating the ultimate expected cost to settle all claims and administrative costs arising from the loss on a contract-by-contract basis and in aggregate for the event. Due to the inherent uniqueness or specific nature of a catastrophic event, each event has its own unique assessment, and different weights may be applied to various inputs based on management’s judgment. Once a loss has occurred, during the then current reporting period, the Company records its best estimate of the ultimate expected cost to settle all claims arising from the loss. The Company’s estimate of loss and LAE reserves is then determined by deducting cumulative paid losses from its estimate of the ultimate expected loss. The Company’s estimate of IBNR is determined by deducting cumulative paid losses, case reserves and additional case reserves from its estimate of the ultimate expected loss. Because catastrophe losses are typically due to prominent, public events such as hurricanes and earthquakes, the Company is often able to use independent reports as part of its loss reserve estimation process. The Company also reviews catastrophe bulletins published by various statistical modeling agencies to assist in determining the size of the industry loss, although these reports may not be available for some time after an event. For smaller events including localized severe weather events such as windstorms, hail, ice, snow, flooding, freezing and tornadoes, which are not necessarily prominent, public occurrences, the Company initially places greater reliance on catastrophe bulletins published by statistical modeling agencies to assist in determining what events occurred during the reporting period than the Company does for large events. This includes reviewing catastrophe bulletins published by Property Claim Services for U.S. catastrophes. The Company sets its initial estimates of reserves for loss and LAE for these smaller events based on a combination of its historical market share for these types of losses and the estimate of the total insured industry property losses as reported by statistical modeling agencies, although management may make significant adjustments based on the Company’s current exposure to the geographic region involved as well as the size of the loss and the peril involved. In general, reserves for the Company’s more recent large losses are subject to greater uncertainty and, therefore, greater potential variability, and are likely to experience material changes from one period to the next. This is due to the uncertainty as to the size of the industry losses, uncertainty as to which contracts have been exposed, uncertainty due to complex legal and coverage issues that can arise out of large or complex losses and uncertainty as to the magnitude of losses and LAE incurred by the Company’s customers. As the Company’s losses age, more information becomes available, and the Company believes its estimates become more certain. The Company continues to receive claims under expired insurance and reinsurance contracts asserting injuries and/or damages relating to or resulting from environmental pollution and hazardous substances, including asbestos. Environmental claims typically assert liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damage caused by the release of hazardous substances into the land, air or water. Asbestos claims typically assert liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos. The Company’s reserves include an estimate of the Company’s ultimate liability for A&E claims. The Company’s A&E liabilities emanate from Mt. McKinley Insurance Company’s (“Mt. McKinley”), a former wholly owned subsidiary that was sold in 2015, direct insurance business and Everest Re’s assumed reinsurance business. All of the contracts of insurance and reinsurance, under which the Company has received claims during the past three years, expired more than 20 years ago. There are significant uncertainties surrounding the Company’s reserves for its A&E losses. A&E exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The following table summarizes incurred losses with respect to A&E reserves on both a gross and net of reinsurance basis for the periods indicated:
| At December 31,
(Dollars in millions) | 2024 |  | 2023 |  | 2022
Gross basis: |  |  |  |  |
Beginning of period reserves | $ | 247 |  |  | $ | 278 |  |  | $ | 175 |
Incurred losses | 62 |  |  | — |  |  | 144 |
Paid losses | (49) |  |  | (31) |  |  | (42) |
End of period reserves | $ | 260 |  |  | $ | 247 |  |  | $ | 278 |
Net basis: |  |  |  |  |
Beginning of period reserves | $ | 232 |  |  | $ | 257 |  |  | $ | 156 |
Incurred losses | 54 |  |  | — |  |  | 138 |
Paid losses | (43) |  |  | (25) |  |  | (37) |
End of period reserves | $ | 242 |  |  | $ | 232 |  |  | $ | 257 |
(Some amounts may not reconcile due to rounding.) In 2015, the Company sold Mt. McKinley to Clearwater Insurance Company (“Clearwater”), a subsidiary of Fairfax Financial. Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which related entirely to A&E business and had been reinsured by Bermuda Re. As consideration for entering into the retrocession treaty, Everest Re Bermuda transferred cash of $140 million, an amount equal to the net loss reserves as of the closing date. The maximum liability retroceded under the retrocession treaty will be $440 million, equal to the retrocession payment plus $300 million. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty. On December 20, 2019, the retrocession treaty was amended and included a partial commutation. As a result of this amendment and partial commutation, gross A&E reserves and correspondingly reinsurance receivable were reduced by $43 million. In addition, the maximum liability permitted to be retroceded increased to $450 million. Reinsurance Recoverables. Reinsurance recoverables for both paid and unpaid losses totaled $3.1 billion and $2.3 billion at December 31, 2024 and December 31, 2023, respectively. At December 31, 2024, $395 million, or 12.6%, was receivable from Mt. Logan Re, Ltd. (“Mt. Logan Re”) collateralized segregated accounts; $316 million, or 10.1%, was receivable from Munich Reinsurance America, Inc. and $187 million, or 6.0%, was recoverable from Endurance Reinsurance Corporation of America. No other retrocessionaire accounted for more than 5% of our receivables.

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