Reserve for Claims and Claim Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Liability for Unpaid Claims and Claim Expenses

The following table details the Company’s prior year development by segment of its liability for unpaid claims and claim expenses:




Year ended December 31,	2017			2016			2015
	(Favorable) adverse development			(Favorable) adverse development			(Favorable) adverse development
Property	$	(45,596	)	$	(104,876	)	$	(93,786	)
Casualty and Specialty	6,183			(58,140		)	(67,791		)
Other	(1,583		)	(1,110		)	(870		)
Total favorable development of prior accident years net claims and claim expenses	$	(40,996	)	$	(164,126	)	$	(162,447	)




Year ended December 31,	2016
	(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
Thailand Floods (2011)	$	(15,131	)
Storm Sandy (2012)	(10,849		)
Tohoku Earthquake and Tsunami (2011)	(7,314		)
New Zealand Earthquake (2011)	1,987
New Zealand Earthquake (2010)	6,904
Other	(9,523		)
Total large catastrophe events	(33,926		)
Small catastrophe events
U.S. PCS 13/14 Wind and Thunderstorm (2013)	(6,286		)
Tianjin Explosion (2015)	(5,686		)
U.S. PCS 15 Wind and Thunderstorm (2013)	(5,648		)
U.S. PCS 81 Wind and Thunderstorm (2015)	(5,098		)
Other	(48,232		)
Total small catastrophe events	(70,950		)
Total catastrophe net claims and claim expenses	(104,876		)
Total net favorable development of prior accident years net claims and claim expenses	$	(104,876	)

The reconciliation of the net incurred and paid claims development tables to the reserve for claims and claim expenses in the consolidated balance sheet is as follows:




At December 31, 2017
Net reserve for claims and claim expenses
Property	$	1,343,290
Casualty and Specialty	2,149,815
Other	673
Total net reserve for claims and claim expenses	3,493,778

Reinsurance recoverable
Property	$	1,143,100
Casualty and Specialty	425,677
Other	17,853
Total reinsurance recoverable	1,586,630
Total gross reserve for claims and claim expenses	$	5,080,408

The following tables and discussion detail the development of the Company’s liability for unpaid claims and claim expenses for its Property segment, allocated between large and small catastrophe net claims and claim expenses and attritional net claims and claim expenses, included in the other line item:




Year ended December 31,	2017
	(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
Storm Sandy (2012)	$	(4,395	)
April and May U.S. Tornadoes (2011)	(4,177		)
Thailand Floods (2011)	(2,513		)
Hurricane Matthew (2016)	(1,239		)
New Zealand Earthquake (2011)	5,807
New Zealand Earthquake (2010)	4,061
Other	(5,184		)
Total large catastrophe events	(7,640		)
Small catastrophe events
2016 PCS Events (2016)	(18,550		)
Tianjin Explosion (2015)	(8,002		)
Fort McMurray Wildfire (2016)	(6,364		)
Other	(5,882		)
Total small catastrophe events	(38,798		)
Total catastrophe net claims and claim expenses	(46,438		)
Actuarial assumption changes	842
Total net favorable development of prior accident years net claims and claim expenses	$	(45,596	)

The following table details the development of the Company’s liability for unpaid claims and claim expenses for its Casualty and Specialty segment:




Year ended December 31,	2017			2016			2015
	(Favorable) adverse development			(Favorable) adverse development			(Favorable) adverse development
Actuarial methods - actual reported claims less than expected claims	$	(24,836	)	$	(52,601	)	$	(72,551	)
Ogden Rate change	33,481			—			—
Actuarial assumption changes	(2,462		)	(5,539		)	4,760
Total favorable development of prior accident years net claims and claim expenses	$	6,183		$	(58,140	)	$	(67,791	)

The following table details the development of the Company’s liability for unpaid claims and claim expenses for its Other category:




Year ended December 31,	2017			2016			2015
	(Favorable) adverse development			(Favorable) adverse development			(Favorable) adverse development
Other	$	(1,583	)	$	(1,110	)	$	(870	)




Year ended December 31,	2015
	(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
Thailand Floods (2011)	$	(18,823	)
Tohoku Earthquake and Tsunami (2011)	(5,313		)
New Zealand Earthquake (2011)	22,754
2011 International Events	(1,382		)
Storm Sandy (2012)	(12,503		)
April and May U.S. Tornadoes (2011)	(10,190		)
New Zealand Earthquake (2010)	1,095
Other	(11,300		)
Total large catastrophe events	(34,280		)
Small catastrophe events
Other	(58,005		)
Total small catastrophe events	(58,005		)
Total catastrophe net claims and claim expenses	(92,285		)
Actuarial assumption changes	(1,501		)
Total net favorable development of prior accident years net claims and claim expenses	$	(93,786	)

The following table summarizes the Company’s claims and claim expense reserves by segment, allocated between case reserves, additional case reserves and IBNR:




At December 31, 2017	Case Reserves		Additional Case Reserves		IBNR		Total
Property	$	696,285	$	896,522	$	893,583	$	2,486,390
Casualty and Specialty	689,962		124,923		1,760,607		2,575,492
Other	6,605		—		11,921		18,526
Total	$	1,392,852	$	1,021,445	$	2,666,111	$	5,080,408

At December 31, 2016
Property	$	214,954	$	186,308	$	226,512	$	627,774
Casualty and Specialty	591,705		105,419		1,498,002		2,195,126
Other	6,935		—		18,459		25,394
Total	$	813,594	$	291,727	$	1,742,973	$	2,848,294

Activity in the liability for unpaid claims and claim expenses is summarized as follows:




Year ended December 31,	2017			2016			2015
Net reserves as of January 1	$	2,568,730		$	2,632,519		$	1,345,816
Net incurred related to:
Current year	1,902,424			694,957			610,685
Prior years	(40,996		)	(164,126		)	(162,447		)
Total net incurred	1,861,428			530,831			448,238
Net paid related to:
Current year	450,527			83,015			95,747
Prior years	524,298			506,279			425,565
Total net paid	974,825			589,294			521,312
Amounts acquired (1)	—			—			1,394,117
Foreign exchange	38,445			(5,326		)	(34,340		)
Net reserves as of December 31	3,493,778			2,568,730			2,632,519
Reinsurance recoverable as of December 31	1,586,630			279,564			134,526
Gross reserves as of December 31	$	5,080,408		$	2,848,294		$	2,767,045


(1)	Represents the fair value of Platinum's reserve for claims and claim expenses and reinsurance recoverable acquired at March 2, 2015.

Short-duration Insurance Contracts, Claims Development

The following table details the Company’s Casualty and Specialty segment incurred claims and claim expenses and cumulative paid claims and claim expenses as of December 31, 2017, net of reinsurance, as well as IBNR plus ACR included within the net incurred claims amounts.




	Incurred claims and claim expenses, net of reinsurance
	For the year ended December 31,																				At December 31, 2017
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR and ACR
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	606,936	$	666,976	$	647,574	$	632,855	$	594,409	$	586,726	$	574,106	$	571,349	$	555,648	$	557,742	$	44,059
2009	—		486,114		476,417		478,841		445,904		424,951		402,977		394,649		389,526		392,791		22,783
2010	—		—		384,412		390,968		377,333		341,729		320,140		306,913		305,178		301,371		33,048
2011	—		—		—		383,832		382,462		353,191		322,719		315,132		308,969		298,395		47,184
2012	—		—		—		—		429,127		428,199		397,907		389,384		379,366		393,122		69,789
2013	—		—		—		—		—		394,726		364,686		340,733		321,910		307,161		81,445
2014	—		—		—		—		—		—		480,527		462,282		458,038		443,140		75,103
2015	—		—		—		—		—		—		—		415,884		435,465		457,652		207,899
2016	—		—		—		—		—		—		—		—		430,365		434,713		267,650
2017	—		—		—		—		—		—		—		—		—		556,303		477,230
Total																			$	4,142,390	$	1,326,190

	Cumulative paid claims and claim expenses, net of reinsurance
	For the year ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	28,840	$	200,770	$	258,924	$	309,707	$	352,441	$	386,146	$	413,443	$	439,466	$	459,920	$	478,773
2009	—		40,330		168,629		206,138		242,975		269,855		304,564		325,601		330,976		338,523
2010	—		—		34,866		98,944		136,420		164,028		182,875		227,529		241,154		258,040
2011	—		—		—		48,110		113,586		145,792		175,458		206,508		224,405		238,013
2012	—		—		—		—		66,840		122,324		169,234		209,638		243,184		295,881
2013	—		—		—		—		—		38,032		86,962		126,465		161,249		194,685
2014	—		—		—		—		—		—		56,086		105,206		150,907		195,007
2015	—		—		—		—		—		—		—		33,783		85,754		161,196
2016	—		—		—		—		—		—		—		—		32,227		99,439
2017	—		—		—		—		—		—		—		—		—		38,409
Total																			$	2,297,966
Outstanding liabilities from accident year 2007 and prior, net of reinsurance																			278,571
Adjustment for unallocated claim expenses																			20,342
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum																			6,478
Liability for claims and claim expenses, net of reinsurance																			$	2,149,815

The following table details the Company’s Property segment incurred claims and claim expenses and cumulative paid claims and claim expenses as of December 31, 2017, net of reinsurance, as well as IBNR plus ACR included within the net incurred claims amounts.




	Incurred claims and claim expenses, net of reinsurance
	For the year ended December 31,																				At December 31, 2017
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR and ACR
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	852,500	$	754,840	$	754,393	$	750,523	$	716,537	$	701,522	$	692,225	$	684,834	$	683,757	$	683,374	$	130
2009	—		224,928		169,191		149,830		143,232		138,899		139,676		138,948		139,167		138,732		238
2010	—		—		632,510		584,878		550,608		555,419		576,079		580,084		590,023		592,679		43,479
2011	—		—		—		1,286,890		1,221,811		1,170,141		1,118,651		1,098,124		1,066,200		1,063,035		41,910
2012	—		—		—		—		438,548		345,168		312,216		294,400		276,236		265,058		24,297
2013	—		—		—		—		—		230,355		200,105		177,533		155,384		143,823		5,264
2014	—		—		—		—		—		—		184,076		155,335		147,610		143,419		8,018
2015	—		—		—		—		—		—		—		227,093		196,094		177,296		32,432
2016	—		—		—		—		—		—		—		—		254,595		256,759		91,193
2017	—		—		—		—		—		—		—		—		—		1,345,006		857,673
Total																			$	4,809,181	$	1,104,634

	Cumulative paid claims and claim expenses, net of reinsurance
	For the year ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	247,123	$	392,800	$	541,278	$	631,204	$	664,217	$	678,266	$	681,988	$	683,821	$	685,229	$	685,874
2009	—		56,244		102,402		117,045		125,021		131,136		135,756		136,806		137,783		137,775
2010	—		—		96,570		226,433		308,198		352,293		389,954		417,446		496,324		506,297
2011	—		—		—		211,151		437,082		763,384		891,928		951,725		978,298		992,272
2012	—		—		—		—		100,067		145,326		189,555		209,059		219,069		231,272
2013	—		—		—		—		—		49,805		94,776		120,117		131,293		135,499
2014	—		—		—		—		—		—		55,365		96,667		119,473		124,533
2015	—		—		—		—		—		—		—		62,358		109,386		128,434
2016	—		—		—		—		—		—		—		—		47,716		119,977
2017	—		—		—		—		—		—		—		—		—		412,477
Total																			$	3,474,410
Outstanding liabilities from accident year 2007 and prior, net of reinsurance																			4,211
Adjustment for unallocated claim expenses																			3,352
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum																			956
Liability for claims and claim expenses, net of reinsurance																			$	1,343,290

The following table details the Company's cumulative number of reported claims for its excess of loss reinsurance contracts allocated by segment:




	At December 31, 2017
	Cumulative number of reported claims
Accident Year	Property	Casualty and Specialty
2008	1,355	1,395
2009	743	1,112
2010	784	1,052
2011	1,184	1,367
2012	679	1,354
2013	628	1,409
2014	549	1,771
2015	591	1,569
2016	818	1,114
2017	1,173	313

The following table details the Company’s consolidated incurred claims and claim expenses and cumulative paid claims and claim expenses as of December 31, 2017, net of reinsurance, as well as IBNR plus ACR included within the net incurred claims amounts.




	Incurred claims and claim expenses, net of reinsurance
	For the year ended December 31,																				At December 31, 2017
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR and ACR
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	1,459,436	$	1,421,816	$	1,401,967	$	1,383,378	$	1,310,946	$	1,288,248	$	1,266,331	$	1,256,183	$	1,239,405	$	1,241,116	$	44,189
2009	—		711,042		645,608		628,671		589,136		563,850		542,653		533,597		528,693		531,523		23,021
2010	—		—		1,016,922		975,846		927,941		897,148		896,219		886,997		895,201		894,050		76,527
2011	—		—		—		1,670,722		1,604,273		1,523,332		1,441,370		1,413,256		1,375,169		1,361,430		89,094
2012	—		—		—		—		867,675		773,367		710,123		683,784		655,602		658,180		94,086
2013	—		—		—		—		—		625,081		564,791		518,266		477,294		450,984		86,709
2014	—		—		—		—		—		—		664,603		617,617		605,648		586,559		83,121
2015	—		—		—		—		—		—		—		642,977		631,559		634,948		240,331
2016	—		—		—		—		—		—		—		—		684,960		691,472		358,843
2017	—		—		—		—		—		—		—		—		—		1,901,309		1,334,903
Total																			$	8,951,571	$	2,430,824

	Cumulative paid claims and claim expenses, net of reinsurance
	For the year ended December 31,
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2008	$	275,963	$	593,570	$	800,202	$	940,911	$	1,016,658	$	1,064,412	$	1,095,431	$	1,123,287	$	1,145,149	$	1,164,647
2009	—		96,574		271,031		323,183		367,996		400,991		440,320		462,407		468,759		476,298
2010	—		—		131,436		325,377		444,618		516,321		572,829		644,975		737,478		764,337
2011	—		—		—		259,261		550,668		909,176		1,067,386		1,158,233		1,202,703		1,230,285
2012	—		—		—		—		166,907		267,650		358,789		418,697		462,253		527,153
2013	—		—		—		—		—		87,837		181,738		246,582		292,542		330,184
2014	—		—		—		—		—		—		111,451		201,873		270,380		319,540
2015	—		—		—		—		—		—		—		96,141		195,140		289,630
2016	—		—		—		—		—		—		—		—		79,943		219,416
2017	—		—		—		—		—		—		—		—		—		450,886
Total																			$	5,772,376
Outstanding liabilities from accident year 2007 and prior, net of reinsurance																			282,782
Claims and claim expenses, net of reinsurance, from the Company's former Bermuda-based insurance operations																			673
Adjustment for unallocated claim expenses																			23,694
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum																			7,434
Liability for claims and claim expenses, net of reinsurance																			$	3,493,778

Short-duration Insurance Contracts, Schedule of Historical Claims Duration

The following is unaudited supplementary information about average historical claims duration by segment:




	Average annual percentage payout of incurred claims by age, net of reinsurance (number of years)
At December 31, 2017	1		2		3		4		5		6		7		8		9		10
Property	27.8	%	23.0	%	21.3	%	10.1	%	5.2	%	3.1	%	3.9	%	0.9	%	0.2	%	0.1	%
Casualty and Specialty	10.1	%	19.6	%	11.8	%	9.8	%	8.3	%	9.5	%	4.9	%	3.9	%	2.9	%	3.4	%