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RESERVE FOR LOSSES AND LOSS EXPENSES | 12 Months Ended
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Dec. 31, 2019
Insurance Loss Reserves [Abstract] |
RESERVE FOR LOSSES AND LOSS EXPENSES | Reserving Methodology Sources of Information The Company's loss reserving process begins with the collection and analysis of paid and incurred claim data for each of the Company's segments. The segmental data is disaggregated by reserve class and further disaggregated by underwriting year and accident year. Underwriting year or accident year information is used to analyze the Company's business and to estimate reserves for losses and loss expenses. Reserve classes are selected to ensure that the underlying contracts have homogeneous loss development characteristics, while remaining large enough to make the estimation of trends credible. The Company's reserve classes are reviewed on a regular basis and adjusted over time as the Company's business evolves. The paid and incurred claim data, in addition to industry benchmarks, serves as a key input to many of the methods employed by the Company's actuaries. The relative weights assigned to the Company's historical loss data versus industry data vary based on a number of factors including the Company's historical track record and the development profile for the reserve class being evaluated (refer to 'Claim Tail Analysis' and 'Net Incurred and Paid Claims Development Tables By Accident Year' below for further details). The following tables map the Company's lines of business to reserve classes and the expected claim tails:
Insurance segment |  |  |  |  |
| Reserve class and tail
| Property and other | Marine | Aviation | Credit and political risk | Professional lines | Liability
| Short | Short | Short/Medium | Medium | Medium | Long
Reported lines of business |  |  |  |  |  |
Property | X |  |  |  |  |
Marine |  | X |  |  |  |
Terrorism | X |  |  |  |  |
Aviation |  |  | X |  |  |
Credit and political risk |  |  |  | X |  |
Professional lines |  |  |  |  | X |
Liability |  |  |  |  |  | X
Accident and health | X |  |  |  |  |
Discontinued lines - Novae | X |  |  |  | X | X
Reinsurance segment |  |  |  |
| Reserve class and tail
| Property and other | Credit and surety | Professional lines | Motor | Liability
| Short | Medium | Medium | Long | Long
Reported lines of business |  |  |  |  |
Catastrophe | X |  |  |  |
Property | X |  |  |  |
Credit and surety |  | X |  |  |
Professional lines |  |  | X |  |
Motor |  |  |  | X |
Liability |  |  |  |  | X
Engineering | X |  |  |  |
Agriculture | X |  |  |  |
Marine and other | X |  |  |  |
Accident and health | X |  |  |  |
Discontinued lines - Novae | X |  |  | X | X
Actuarial Analysis Multiple actuarial methods are available to estimate ultimate losses. Each method has its own assumptions and its own advantages and disadvantages, with no single estimation method being better than the others in all situations and no one set of assumption variables being meaningful for all reserve classes. The relative strengths and weaknesses of the particular estimation methods when applied to a particular group of claims can also change over time. The following is a brief description of the reserve estimation methods commonly employed by the Company's actuaries including a discussion of their particular strengths and weaknesses:
• | Expected Loss Ratio Method ("ELR Method"): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio to the earned or written premium for that year. Generally, expected loss ratios are based on one or more of (a) an analysis of historical loss experience to date, (b) pricing information and (c) industry data, adjusted as appropriate, to reflect changes in rates, loss and exposure trends, and terms and conditions. This method is insensitive to actual incurred losses for the accident year or underwriting year in question and is, therefore, often useful in the early stages of development when very few losses have been incurred. Conversely, the lack of sensitivity to incurred/paid losses for the accident year or underwriting year in question means that this method is usually inappropriate in later stages of an accident year or underwriting year’s development.
• | Loss Development Method (also referred to as the "Chain Ladder Method" or "Link Ratio Method"): This method assumes that the losses incurred/paid for each accident year or underwriting year at a particular development stage follow a relatively similar pattern. It assumes that on average, every accident year or underwriting year will display the same percentage of ultimate losses incurred/paid at the same point in time after the inception of that year. The percentages incurred/paid are established for each development stage (e.g. 12 months, 24 months, etc.) after examining averages from historical loss development data and/or external industry benchmark information. Ultimate losses are then estimated by multiplying the actual incurred/paid losses by the reciprocal of the established incurred/paid percentage. The strengths of this method are that it reacts to loss emergence/payments and that it makes full use of historical claim emergence/payment experience. However, this method has weaknesses when the underlying assumption of stable loss development/payment patterns is not valid. This could be the consequence of changes in business mix, claim inflation trends or claim reporting practices and/or the presence of large claims, among other things. Furthermore, this method
tends to produce volatile estimates of ultimate losses where there is volatility in the underlying incurred/paid patterns. In particular, where the expected percentage of incurred/paid losses is low, small deviations between actual and expected claims can lead to very volatile estimates of ultimate losses. As a result, this method is often unsuitable at early development stages for an accident year or underwriting year.
• | Bornhuetter-Ferguson Method ("BF Method"): This method can be seen as a combination of the ELR and Loss Development Methods, under which the Loss Development Method is given progressively more weight as an accident year or underwriting year matures. The main advantage of the BF Method is that it provides a more stable estimate of ultimate losses than the Loss Development Method at earlier stages of development, while remaining more responsive to emerging loss development than the ELR Method. In addition, the BF Method allows for the incorporation of external market information through the use of expected loss ratios, whereas the Loss Development Method does not incorporate such information.
As part of the loss reserving process, the Company's actuaries employ the estimation method(s) that they believe will produce the most reliable estimate of ultimate losses, at that particular evaluation date, for each reserve class and accident year or underwriting year combination. Often, this is a blend (i.e. weighted average) of the results of two or more appropriate actuarial methods. These ultimate loss estimates are generally utilized to evaluate the adequacy of ultimate loss estimates for previous accident or underwriting years, established in the prior reporting period. For the initial estimate of the current accident or underwriting year, the available claim data is typically insufficient to produce a reliable estimate of ultimate losses. As a result, initial estimates for an accident or underwriting year are generally based on the ELR Method for longer tailed lines and a BF Method for shorter tailed lines. The initial ELR for each reserve class is established collaboratively by the Company's actuaries, underwriters and management at the start of the year as part of the planning process, taking into consideration prior accident years’ or underwriting years' experience and industry benchmarks, adjusted after considering factors such as loss and exposure trends, rate differences, changes in contract terms and conditions, business mix changes and other known differences between the current year and prior accident or underwriting years. The initial expected loss ratios for a given accident or underwriting year may be modified over time if the underlying assumptions, such as loss development or premium rate changes, differ from the original assumptions. Key Actuarial Assumptions The use of the above actuarial methods requires the Company to make certain explicit assumptions, the most significant of which are: (1) expected loss ratios and (2) loss development patterns. In earlier years, significant reliance was placed on industry benchmarks in establishing expected loss ratios and selecting loss development patterns. Over time, more reliance has been placed on historical loss experience in establishing these ratios and selecting these patterns where the Company believes the weight of its experience has become sufficiently credible for consideration. The weight given to the Company's experience differs for each of the three claim tail classes (refer to 'Claim Tail Analysis' below for further details). In establishing expected loss ratios for the insurance segment, consideration is given to a number of other factors, including exposure trends, rate adequacy on new and renewal business, ceded reinsurance costs, changes in claims emergence and underwriters’ view of terms and conditions in the market environment. For the reinsurance segment, expected loss ratios are based on a contract-by-contract review, which considers information provided by clients together with estimates provided by underwriters and actuaries about the impact of changes in pricing, terms and conditions and coverage. Market experience of some classes of business as compiled and analyzed by an independent actuarial firm has also been considered, as appropriate. Claim Tail Analysis Short-tail Business Short-tail business generally includes exposures for which losses are usually known and paid within a relatively short period of time after the underlying loss event has occurred. The key actuarial assumptions for short-tail business in early accident years were primarily developed with reference to industry benchmarks for expected loss ratios and loss development patterns. As the Company's historical loss experience amassed, it gained credibility and became relevant for consideration in establishing these key actuarial assumptions. As a result, the Company gradually increased the weighting assigned to its historical loss experience in selecting the expected loss ratios and loss development patterns utilized to establish estimates of ultimate losses for an accident year. Due to the relatively short reporting and settlement patterns for short-tail business, more weight is generally placed on experience-based methods and other qualitative considerations in establishing reserves for recent and more mature accident years. The majority of development for an accident year or underwriting year is expected to be recognized in the subsequent one to three years. Medium-tail Business Medium-tail business generally has claim reporting and settlement periods that are longer than those of short-tail reserve classes. For the Company's earliest accident and underwriting years, initial key actuarial expected loss ratio and loss development assumptions were established utilizing industry benchmarks. Due to the longer claim tail, the length of time required to develop credible loss history for use in the reserve process is greater for medium-tail business than for short-tail business. Long-tail Business In contrast to short and medium-tail business, the claim tail for long-tail business is expected to be notably longer, as claims are often reported and ultimately paid or settled years, or even decades, after the related loss events occur. As a general rule, estimates of accident year or underwriting year ultimate losses for long-tail business are notably more uncertain than those for short and medium-tail business. To date, key actuarial assumptions for long-tail business have been derived from a combination of industry benchmarks supplemented with Company historical loss experience. While industry benchmarks that the Company believes reflect the nature and coverage of its business are considered, actual loss experience may differ from the benchmarks based on industry averages. Due to the length of the development tail for this business, reserve estimates for most accident years and underwriting years are predominantly based on the BF Method or ELR Method and the consideration of qualitative factors. Reserving for Significant Catastrophic Events The Company cannot estimate losses from widespread catastrophic events, such as hurricanes and earthquakes, using the traditional actuarial methods described above. Loss reserves for such events are estimated by management after a catastrophe occurs by completing an in-depth analysis of individual contracts which may potentially have been impacted by the catastrophic event. This in-depth analysis may rely on several sources of information including:
• | estimates of the size of insured industry losses from the catastrophic event and the Company's corresponding market share;
• | a review of the Company's portfolio of contracts performed to identify those contracts which may be exposed to the catastrophic event;
• | a review of modeled loss estimates based on information previously reported by customers and brokers, including exposure data obtained during the underwriting process;
• | discussions of the impact of the event with customers and brokers; and
• | catastrophe bulletins published by various independent statistical reporting agencies.
A blend of these information sources is generally used to arrive at aggregate estimates of the ultimate losses arising from the catastrophic event. In subsequent reporting periods, changes in paid and incurred losses in relation to each significant catastrophe are reviewed and adjustments are made to estimates of ultimate losses for each event if there are developments that are different from previous expectations. Adjustments are recorded in the period in which they are identified. Selection of Reported Reserves – Management’s Best Estimate The Company's loss reserving process involves the collaboration of its underwriting, claims, actuarial, legal, ceded reinsurance and finance departments, includes various segmental committee meetings and culminates with the approval of a single point best estimate by the Company's Group Reserving Committee, which comprises senior management. In selecting this best estimate, management considers actuarial estimates and applies informed judgment regarding qualitative factors that may not be fully captured in these actuarial estimates. Such factors include, but are not limited to, the timing of the emergence of claims, volume and complexity of claims, social and judicial trends, potential severity of individual claims and the extent of Company historical loss data versus industry information. While these qualitative factors are considered in arriving at the point estimate, no specific provisions for qualitative factors are established. Reserve for Losses and Loss Expenses Reserve for losses and loss expenses comprise the following:
| At December 31, | 2019 |  | 2018 |
| Reserve for reported losses and loss expenses | $ | 4,860,916 |  |  | $ | 4,626,204 |  |
| Reserve for losses incurred but not reported | 7,891,165 |  |  | 7,654,565 |  |
| Reserve for losses and loss expenses | $ | 12,752,081 |  |  | $ | 12,280,769 |  |
Reserve Roll-forward The following table presents a reconciliation of the Company's beginning and ending gross reserves for losses and loss expenses and net reserves for unpaid losses and loss expenses:
| Year ended December 31, | 2019 |  | 2018 |  | 2017 |
| Gross reserve for losses and loss expenses, beginning of year | $ | 12,280,769 |  |  | $ | 12,997,553 |  |  | $ | 9,697,827 |  |
| Less reinsurance recoverable on unpaid losses, beginning of year | (3,501,669 | ) |  | (3,159,514 | ) |  | (2,276,109 | ) |
| Net reserve for unpaid losses and loss expenses, beginning of year | 8,779,100 |  |  | 9,838,039 |  |  | 7,421,718 |  |
| Net incurred losses and loss expenses related to: |  |  |  |  |  |
| Current year | 3,123,698 |  |  | 3,389,949 |  |  | 3,487,826 |  |
| Prior years | (78,900 | ) |  | (199,662 | ) |  | (200,054 | ) |
|  | 3,044,798 |  |  | 3,190,287 |  |  | 3,287,772 |  |
| Net paid losses and loss expenses related to: |  |  |  |  |  |
| Current year | (598,988 | ) |  | (724,199 | ) |  | (703,796 | ) |
| Prior years | (2,371,637 | ) |  | (2,368,615 | ) |  | (1,880,882 | ) |
|  | (2,970,625 | ) |  | (3,092,814 | ) |  | (2,584,678 | ) |
| Foreign exchange and other | 21,052 |  |  | (1,156,412 | ) |  | 1,713,227 |  |
| Net reserve for unpaid losses and loss expenses, end of year | 8,874,325 |  |  | 8,779,100 |  |  | 9,838,039 |  |
| Reinsurance recoverable on unpaid losses, end of year | 3,877,756 |  |  | 3,501,669 |  |  | 3,159,514 |  |
| Gross reserve for losses and loss expenses, end of year | $ | 12,752,081 |  |  | $ | 12,280,769 |  |  | $ | 12,997,553 |  |
The Company writes business with loss experience generally characterized as low frequency and high severity in nature, which can result in volatility in its financial results. During 2019, 2018 and 2017, the Company recognized net losses and loss expenses, net of reinstatement premiums, of $336 million, $430 million and $835 million, respectively, attributable to catastrophe and weather-related events. On December 15, 2019, the Company entered into a quota share retrocessional agreement with Harrington Re, a related party, which was deemed to have met the established criteria for retroactive reinsurance accounting. The Company recognized reinsurance recoverable on unpaid losses of $59 million related to this reinsurance agreement. This transaction was conducted at market rates consistent with negotiated arms-length contracts. On April 16, 2018, the Company entered into a quota share retrocessional agreement with Harrington Re, a related party, which was deemed to have met the established criteria for retroactive reinsurance accounting. The Company recognized reinsurance recoverable on unpaid losses of $108 million related to this reinsurance agreement. This transaction was conducted at market rates consistent with negotiated arms-length contracts. AXIS Managing Agency Ltd., the managing agent of Syndicate 2007 entered into an agreement for the Reinsurance to Close ("RITC") of the 2015 and prior years of account of Syndicate 2007, with an effective date of January 1, 2018. This agreement was accounted for as a novation reinsurance contract. At December 31, 2018, foreign exchange and other included a reduction in reserves for losses and loss expenses of $819 million related to this transaction. On October 2, 2017, the Company acquired 100% ownership interest in Novae. At December 31, 2017, foreign exchange and other included reserves for losses and loss expenses of $2,126 million and reinsurance recoverable on unpaid and paid losses of $788 million related to this acquisition. On April 1, 2017, the Company acquired 100% ownership interest in Aviabel. At December 31, 2017, foreign exchange and other included reserves for losses and loss expenses of $79 million and reinsurance recoverable on unpaid and paid losses of $5 million related to this acquisition. The transfer of the insurance business of AXIS Specialty Australia to a reinsurer was approved by the Irish High Court on February 1, 2017 and the Federal Court of Australia of February 10, 2017. Consequently, the insurance policies, assets and liabilities of AXIS Specialty Australia were transferred to the reinsurer with effect from February 13, 2017. This resulted in the reduction of reserves for losses and loss expenses by $223 million and a reduction in reinsurance recoverable on unpaid and paid losses by $223 million. Estimates for Significant Catastrophe Events At December 31, 2019, net reserve for losses and loss expenses included estimated amounts for numerous catastrophe events. The magnitude and/or complexity of losses arising from these events, in particular Japanese Typhoons Hagibis, Faxai and Tapah, Hurricane Dorian and the Australia Wildfires which occurred in 2019 together with Hurricanes Michael and Florence, California Wildfires and Typhoon Jebi which occurred in 2018 as well as Hurricanes Harvey, Irma and Maria, and the California Wildfires which occurred in 2017 inherently increase the level of uncertainty and, therefore, the level of management judgment involved in arriving at estimated net reserves for losses and loss expenses. As a result, actual losses for these events may ultimately differ materially from current estimates. Prior Year Reserve Development Net favorable prior year reserve development arises from changes to estimates for losses and loss expenses related to loss events that occurred in previous calendar years. The following table presents net prior year reserve development by segment:
|  | Insurance |  | Reinsurance |  | Total |
| Year ended December 31, 2019 | $ | 53,302 |  |  | $ | 25,598 |  |  | $ | 78,900 |  |
| Year ended December 31, 2018 | 92,806 |  |  | 106,856 |  |  | 199,662 |  |
| Year ended December 31, 2017 | 60,459 |  |  | 139,595 |  |  | 200,054 |  |
Short-tail business Short-tail business includes the underlying exposures in the property and other, marine, and aviation reserve classes in the insurance segment, and the underlying exposures in the property and other reserve class in the reinsurance segment. These reserve classes recognized net adverse prior year reserve development of $85 million in 2019 including net adverse prior year reserve development of $133 million recognized by the reinsurance property and other reserve class, partially offset by net favorable prior year reserve development of $33 million contributed by the insurance marine reserve class and net favorable prior year reserve development of $11 million contributed by the insurance property and other reserve class. The net adverse prior year reserve development of $133 million recognized by the reinsurance property and other reserve class was due to an increase in loss estimates attributable to Hurricanes Irma and Michael consistent with industry trends, an increase in loss estimates attributable Typhoon Jebi consistent with updated industry insured loss estimates, and reserve strengthening within the U.S. regional and commercial proportional property books of business and the European proportional property book of business. These reserve classes contributed net favorable prior year reserve development of $86 million in 2018 reflecting overall better than expected loss emergence related to the 2017 catastrophe events. These reserve classes contributed $60 million of net favorable prior year reserve development in 2017 reflecting overall better than expected loss emergence. Medium-tail business Medium-tail business consists primarily of insurance and reinsurance professional lines reserve classes, insurance credit and political risk reserve class and reinsurance credit and surety reserve class. For the year ended December 31, 2019, the insurance professional lines reserve class recorded net favorable prior year reserve development of $12 million (2018: $32 million, 2017: $26 million), reflecting generally favorable experience on older accident years as the Company continued to transition to more experience based actuarial methods. For the year ended December 31, 2018, the reinsurance professional lines reserve class recorded net favorable prior year reserve development of $21 million (2017: $44 million), reflecting generally favorable experience on older accident years as the Company continued to transition to more experienced based actuarial methods. For the year ended December 31, 2019, the insurance credit and political risk reserve class recorded net favorable prior year reserve development of $19 million reflecting generally better than expected loss emergence. For the year ended December 31, 2019, the reinsurance credit and surety reserve class recorded net favorable prior year reserve development of $53 million (2018: $33 million, 2017: $33 million), reflecting generally better than expected loss emergence. Long-tail business Long-tail business consists primarily of insurance and reinsurance liability reserve classes and reinsurance motor reserve class. For the year ended December 31, 2019, the insurance liability reserve class recognized net adverse prior year reserve development of $25 million (2018: $22 million, 2017: $8 million). The net adverse prior year reserve development in 2019 was primarily related to reserve strengthening within the Company's U.S. excess casualty and U.S. primary casualty books of business. The net adverse prior year reserve development in 2018 was primarily related to reserve strengthening within the Company's U.S. excess casualty book of business. The net adverse prior year reserve development in 2017 was primarily attributable to reserve strengthening within the Company's run-off Bermuda excess casualty book of business. For the year ended December 31, 2019, the reinsurance liability reserve classes recognized net favorable prior year reserve development of $31 million (2018: $23 million, 2017: $43 million). The net favorable prior year reserve development in 2019, 2018 and 2017 was due to progressively increased weight given by management to experience based indications on older accident years. For the year ended December 31, 2019, the reinsurance motor reserve class recognized net favorable prior year reserve development of $71 million (2018: $23 million 2017: $1 million). The net favorable prior year reserve development in 2019 was impacted by the increase in the Ogden discount rate and changes in related actuarial assumptions. The Ogden Rate which is used to calculate lump sum awards in U.K. bodily injury cases, changed from minus 0.75% to minus 0.25%, effective August 5, 2019. The net favorable prior year reserve development in 2018 was primarily attributable to non proportional treaty business on older accident years. The net favorable prior year development in 2017 was impacted by the decrease in the Ogden Rate, which changed from plus 2.5% to minus 0.75%, effective March 20, 2017. Net Incurred and Paid Claims Development Tables by Accident Year The following tables present net incurred and paid claims development by accident year, total incurred-but-not-reported liabilities plus expected development on reported claims, cumulative reported claims frequency and claims duration for each reserve class. The loss development tables are presented on an accident year basis for the insurance and reinsurance segments. The Company does not discount reserves for losses and loss expenses. Non-U.S. dollar denominated loss data is converted to U.S. dollar at the rates of exchange in effect at the balance sheet date for material underlying currencies. Fluctuations in foreign currency exchange rates may cause material shifts in loss development. Reserves for losses and loss expenses disclosed in the consolidated balance sheets are also remeasured using the rates of exchange in effect at the balance sheet date. There are many considerations in establishing loss reserves and an attempt to evaluate loss reserves using solely the data presented in these tables could be misleading. The Company cautions against mechanical application of standard actuarial methodologies to project ultimate losses using data presented in this disclosure. Insurance Segment The reporting of cumulative claims frequency for the reserve classes within the insurance segment has been measured by counting the number of unique claim references including claim references assigned to nil and nominal case reserves. Claim references are grouped by claimant by loss event for each reserve class. For certain insurance facilities and business produced by managing general agents where underlying data is reported to the Company in an aggregated format, the information necessary to provide cumulative claims frequency is not available therefore reporting of claims frequency is deemed to be impracticable. Insurance Property and Other This reserve class includes property, terrorism, accident and health, and discontinued lines - Novae. The property line of business provides physical loss or damage, business interruption and machinery breakdown cover for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore energy installations. This line of business includes primary and excess risks, some of which are catastrophe-exposed. The terrorism line of business provides cover for physical damage and business interruption of an insured following an act of terrorism and includes kidnap and ransom, and crisis management insurance. The accident and health line of business includes accidental death, travel insurance and specialty health products for employer and affinity groups. The accident and health line of business contributed net premiums earned of $144 million to this reserve class for the year ended December 31, 2019. A large increase in reported claims related to this line of business was observed from 2012. In particular, an increase in limited benefits medical business written in 2017 resulted in a significant increase in reported claims observed in that year. The discontinued lines - Novae includes the international direct and facultative property line of business that Novae exited or placed into run-off in the fourth quarter of 2016. In general, reporting and payment patterns are relatively short-tailed although they can be volatile due to the incidence of catastrophe events.
Insurance property and other
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 173,118 |  | $ | 155,512 |  | $ | 148,126 |  | $ | 122,897 |  | $ | 117,406 |  | $ | 116,477 |  | $ | 116,172 |  | $ | 115,712 |  | $ | 114,614 |  | $ | 114,355 |  | $ | 684 |  | 4,423
2011 |  | 348,001 |  | 327,787 |  | 307,305 |  | 286,896 |  | 283,852 |  | 282,663 |  | 283,096 |  | 281,389 |  | 280,491 |  | (18 | ) | 6,350
2012 |  |  | 391,031 |  | 400,995 |  | 383,228 |  | 363,171 |  | 358,598 |  | 352,879 |  | 352,048 |  | 342,017 |  | 497 |  | 29,931
2013 |  |  |  | 309,937 |  | 299,498 |  | 272,642 |  | 268,704 |  | 268,350 |  | 278,790 |  | 275,074 |  | 1,505 |  | 53,191
2014 |  |  |  |  | 360,874 |  | 355,495 |  | 344,878 |  | 329,251 |  | 328,252 |  | 326,638 |  | 3,990 |  | 62,356
2015 |  |  |  |  |  | 278,554 |  | 270,793 |  | 259,725 |  | 255,392 |  | 252,560 |  | 4,077 |  | 48,424
2016 |  |  |  |  |  |  | 351,075 |  | 377,820 |  | 369,508 |  | 356,353 |  | 6,011 |  | 93,717
2017 |  |  |  |  |  |  |  | 885,486 |  | 829,016 |  | 808,602 |  | 2,992 |  | 697,983
2018 |  |  |  |  |  |  |  |  | 721,266 |  | 759,300 |  | 41,900 |  | 705,592
2019 |  |  |  |  |  |  |  |  |  | 429,987 |  | 113,754 |  | 445,460
|  |  |  |  |  |  |  |  | Total | $ | 3,945,377 |  |  |
Insurance property and other
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 48,995 |  | $ | 87,604 |  | $ | 95,726 |  | $ | 106,531 |  | $ | 110,745 |  | $ | 110,819 |  | $ | 110,612 |  | $ | 110,656 |  | $ | 110,990 |  | $ | 110,970 |
2011 |  | 85,346 |  | 193,949 |  | 250,251 |  | 272,530 |  | 271,483 |  | 271,287 |  | 271,960 |  | 272,402 |  | 272,372 |
2012 |  |  | 77,461 |  | 213,961 |  | 277,909 |  | 300,845 |  | 308,368 |  | 313,529 |  | 313,602 |  | 315,703 |
2013 |  |  |  | 75,831 |  | 198,955 |  | 237,714 |  | 248,746 |  | 259,787 |  | 262,819 |  | 264,607 |
2014 |  |  |  |  | 132,872 |  | 259,679 |  | 306,221 |  | 313,360 |  | 317,697 |  | 318,866 |
2015 |  |  |  |  |  | 99,120 |  | 202,649 |  | 227,237 |  | 241,586 |  | 242,270 |
2016 |  |  |  |  |  |  | 123,640 |  | 289,711 |  | 329,709 |  | 338,243 |
2017 |  |  |  |  |  |  |  | 253,400 |  | 628,364 |  | 744,285 |
2018 |  |  |  |  |  |  |  |  | 284,651 |  | 577,243 |
2019 |  |  |  |  |  |  |  |  |  | 187,430 |
Total |  | 3,371,989 |
All outstanding liabilities before 2010, net of reinsurance |  | 6,225 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 579,613 |
Insurance property and other
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
35.0% | 40.9% | 13.7% | 5.5% | 1.9% | 0.6% | 0.2% | 0.3% | 0.2% | —%
Insurance Marine This reserve class includes the marine line of business which provides cover for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie, and hull and war. Offshore energy coverage includes physical damage, business interruption, operators extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases. The complex nature of claims arising under marine policies tends to result in reporting and payment patterns that are longer than those of the property and other reserve class. Exposure to natural perils such as windstorm and earthquake can result in volatility.
Insurance marine
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 68,519 |  | $ | 70,314 |  | $ | 66,359 |  | $ | 53,458 |  | $ | 51,482 |  | $ | 48,618 |  | $ | 47,226 |  | $ | 45,482 |  | $ | 45,064 |  | $ | 44,696 |  | $ | 262 |  | 3,197
2011 |  | 90,776 |  | 78,807 |  | 72,875 |  | 65,973 |  | 65,921 |  | 66,156 |  | 68,318 |  | 69,011 |  | 68,330 |  | 976 |  | 3,830
2012 |  |  | 89,712 |  | 83,138 |  | 69,075 |  | 71,211 |  | 72,238 |  | 74,797 |  | 73,002 |  | 62,447 |  | 2,718 |  | 4,134
2013 |  |  |  | 79,578 |  | 100,757 |  | 96,164 |  | 97,250 |  | 82,487 |  | 82,073 |  | 81,070 |  | 1,174 |  | 2,353
2014 |  |  |  |  | 59,686 |  | 44,576 |  | 48,586 |  | 44,420 |  | 46,030 |  | 47,574 |  | 4,249 |  | 2,163
2015 |  |  |  |  |  | 160,063 |  | 141,317 |  | 137,180 |  | 129,914 |  | 117,587 |  | 3,079 |  | 2,228
2016 |  |  |  |  |  |  | 86,386 |  | 78,762 |  | 76,511 |  | 71,161 |  | 4,020 |  | 2,841
2017 |  |  |  |  |  |  |  | 173,222 |  | 170,775 |  | 166,796 |  | 27,726 |  | 3,976
2018 |  |  |  |  |  |  |  |  | 182,232 |  | 191,005 |  | 45,347 |  | 4,232
2019 |  |  |  |  |  |  |  |  |  | 169,381 |  | 94,818 |  | 3,525
|  |  |  |  |  |  |  |  | Total | $ | 1,020,047 |  |  |
Insurance marine
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 18,017 |  | $ | 28,603 |  | $ | 33,296 |  | $ | 42,325 |  | $ | 45,159 |  | $ | 45,944 |  | $ | 46,918 |  | $ | 43,286 |  | $ | 43,372 |  | $ | 43,377 |
2011 |  | 26,453 |  | 44,274 |  | 55,029 |  | 58,132 |  | 59,976 |  | 60,689 |  | 65,000 |  | 67,046 |  | 67,523 |
2012 |  |  | 10,708 |  | 38,594 |  | 44,884 |  | 49,631 |  | 50,448 |  | 52,841 |  | 54,863 |  | 55,950 |
2013 |  |  |  | 18,856 |  | 43,958 |  | 54,777 |  | 63,034 |  | 65,717 |  | 76,753 |  | 76,900 |
2014 |  |  |  |  | 6,357 |  | 15,179 |  | 26,905 |  | 26,930 |  | 36,020 |  | 40,895 |
2015 |  |  |  |  |  | 21,433 |  | 54,958 |  | 108,312 |  | 111,212 |  | 112,617 |
2016 |  |  |  |  |  |  | 12,487 |  | 31,817 |  | 57,314 |  | 63,333 |
2017 |  |  |  |  |  |  |  | 14,515 |  | 68,411 |  | 92,773 |
2018 |  |  |  |  |  |  |  |  | 25,153 |  | 84,834 |
2019 |  |  |  |  |  |  |  |  |  | 35,449 |
Total |  | 673,651 |
All outstanding liabilities before 2010, net of reinsurance |  | 4,296 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 350,692 |
Insurance marine
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
21.1% | 29.2% | 21.3% | 7.7% | 5.7% | 6.1% | 3.0% | (1.1)% | 0.5% | —%
Insurance Aviation This reserve class includes the aviation line of business which provides cover for hull and liability, and specific war cover primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers. The claims reporting pattern varies by insurance coverage provided. Losses arising from war or terrorism and damage to hulls of aircraft are generally reported quickly compared with liability claims which involve passengers and third parties and generally exhibit longer reporting and payment patterns. To date, the claims reported to the Company have predominantly related to damage to hulls, therefore, reporting and payment patterns have typically exhibited a relatively short tail.
Insurance aviation
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 12,917 |  | $ | 11,698 |  | $ | 11,420 |  | $ | 9,745 |  | $ | 8,766 |  | $ | 8,695 |  | $ | 8,741 |  | $ | 8,525 |  | $ | 8,868 |  | $ | 8,836 |  | $ | 48 |  | 663
2011 |  | 17,724 |  | 15,391 |  | 12,781 |  | 9,555 |  | 8,424 |  | 7,277 |  | 7,234 |  | 7,192 |  | 6,952 |  | 118 |  | 4,202
2012 |  |  | 12,793 |  | 10,677 |  | 10,801 |  | 8,718 |  | 7,769 |  | 7,712 |  | 7,599 |  | 7,392 |  | 83 |  | 2,857
2013 |  |  |  | 15,652 |  | 16,330 |  | 15,205 |  | 15,249 |  | 15,585 |  | 15,470 |  | 16,763 |  | 255 |  | 3,017
2014 |  |  |  |  | 20,435 |  | 23,033 |  | 24,349 |  | 21,789 |  | 21,847 |  | 19,088 |  | 493 |  | 3,529
2015 |  |  |  |  |  | 29,782 |  | 28,502 |  | 29,833 |  | 29,567 |  | 27,512 |  | 299 |  | 4,140
2016 |  |  |  |  |  |  | 29,173 |  | 33,502 |  | 33,658 |  | 31,723 |  | 606 |  | 4,062
2017 |  |  |  |  |  |  |  | 55,581 |  | 62,035 |  | 66,896 |  | 3,747 |  | 4,272
2018 |  |  |  |  |  |  |  |  | 57,990 |  | 63,753 |  | 6,841 |  | 4,258
2019 |  |  |  |  |  |  |  |  |  | 42,360 |  | 11,632 |  | 2,305
|  |  |  |  |  |  |  |  | Total | $ | 291,275 |  |  |
Insurance aviation
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 1,032 |  | $ | 4,126 |  | $ | 6,309 |  | $ | 6,883 |  | $ | 7,548 |  | $ | 7,666 |  | $ | 8,109 |  | $ | 8,198 |  | $ | 8,391 |  | $ | 8,574 |
2011 |  | 639 |  | 2,822 |  | 4,513 |  | 5,030 |  | 5,564 |  | 5,814 |  | 6,035 |  | 6,177 |  | 6,222 |
2012 |  |  | 954 |  | 2,861 |  | 4,152 |  | 5,948 |  | 6,831 |  | 7,053 |  | 7,166 |  | 7,102 |
2013 |  |  |  | 4,400 |  | 7,328 |  | 9,749 |  | 11,450 |  | 13,560 |  | 14,167 |  | 14,487 |
2014 |  |  |  |  | 3,988 |  | 8,023 |  | 11,692 |  | 13,849 |  | 14,485 |  | 14,848 |
2015 |  |  |  |  |  | 8,085 |  | 16,159 |  | 20,959 |  | 23,217 |  | 24,676 |
2016 |  |  |  |  |  |  | 10,412 |  | 19,279 |  | 26,259 |  | 27,820 |
2017 |  |  |  |  |  |  |  | 21,105 |  | 40,159 |  | 50,642 |
2018 |  |  |  |  |  |  |  |  | 21,442 |  | 40,368 |
2019 |  |  |  |  |  |  |  |  |  | 16,856 |
Total |  | 211,595 |
All outstanding liabilities before 2010, net of reinsurance |  | 7,260 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 86,940 |
Insurance aviation
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
24.8% | 27.4% | 19.4% | 10.4% | 8.1% | 2.7% | 2.9% | 0.7% | 1.4% | 2.1%
Insurance Credit and Political Risk This reserve class includes the credit and political risk line of business which provides credit and political risk insurance products for banks, commodity traders, corporations and multilateral and export credit agencies. Cover is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events. The credit insurance coverage is primarily for lenders seeking to mitigate the risk of non-payment from their borrowers. In order to claim compensation under a credit insurance contract, the insured (most often a bank) cannot assign, without the Company's prior agreement, the insured contract (most often a loan) to any third party and is normally obliged to hold a material portion of insured asset on their books, unhedged and uninsured. Claims for this business tend to be characterized by their severity risk, as opposed to their frequency risk. Claim reporting and payment patterns are anticipated to be volatile. Under the notification provisions of credit insurance policies issued by the Company, it anticipates being advised of an insured event within a relatively short time period. Consequently, the Company generally estimates ultimate losses based on a contract-by-contract analysis which considers the contracts’ terms, the facts and circumstances of underlying loss events and qualitative input from claims managers.
Insurance credit and political risk
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 62,415 |  | $ | 63,179 |  | $ | 63,259 |  | $ | 65,597 |  | $ | 64,980 |  | $ | 65,014 |  | $ | 72,104 |  | $ | 90,888 |  | $ | 99,423 |  | $ | 99,633 |  | $ | 339 |  | 6
2011 |  | 58,154 |  | 48,665 |  | 47,706 |  | 48,361 |  | 48,333 |  | 45,036 |  | 33,609 |  | 27,904 |  | 27,904 |  | 268 |  | 4
2012 |  |  | 32,602 |  | 15,672 |  | 12,435 |  | 12,447 |  | 10,322 |  | 46 |  | 198 |  | 198 |  | 155 |  | 4
2013 |  |  |  | 26,439 |  | 25,684 |  | 9,759 |  | 9,880 |  | 14,942 |  | 14,067 |  | 12,377 |  | 4,070 |  | 1
2014 |  |  |  |  | 38,825 |  | 70,713 |  | 67,109 |  | 68,324 |  | 69,589 |  | 71,274 |  | 2,822 |  | 6
2015 |  |  |  |  |  | 30,329 |  | 30,368 |  | 27,524 |  | 26,012 |  | 25,930 |  | 2,621 |  | 2
2016 |  |  |  |  |  |  | 45,391 |  | 44,891 |  | 42,401 |  | 42,972 |  | 18,275 |  | 1
2017 |  |  |  |  |  |  |  | 36,751 |  | 34,765 |  | 28,209 |  | 17,808 |  | 3
2018 |  |  |  |  |  |  |  |  | 47,215 |  | 36,618 |  | 12,576 |  | 1
2019 |  |  |  |  |  |  |  |  |  | 50,609 |  | 33,702 |  | 5
|  |  |  |  |  |  |  |  | Total | $ | 395,724 |  |  |
Insurance credit and political risk
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 50,000 |  | $ | 85,418 |  | $ | 90,729 |  | $ | 106,768 |  | $ | 101,789 |  | $ | 101,951 |  | $ | 102,157 |  | $ | 102,203 |  | $ | 102,522 |  | $ | 101,262 |
2011 |  | 32,788 |  | 37,205 |  | 27,636 |  | 27,636 |  | 27,636 |  | 27,636 |  | 27,636 |  | 27,636 |  | 27,636 |
2012 |  |  | — |  | — |  | — |  | — |  | 39 |  | 41 |  | 43 |  | 43 |
2013 |  |  |  | 745 |  | 2,235 |  | 3,726 |  | 5,216 |  | 11,769 |  | 13,828 |  | 13,828 |
2014 |  |  |  |  | 1,924 |  | 39,952 |  | 61,108 |  | 57,858 |  | 57,858 |  | 64,050 |
2015 |  |  |  |  |  | — |  | 23,309 |  | 23,309 |  | 23,309 |  | 23,309 |
2016 |  |  |  |  |  |  | — |  | 24,697 |  | 24,697 |  | 24,697 |
2017 |  |  |  |  |  |  |  | 1,523 |  | 5,593 |  | 11,019 |
2018 |  |  |  |  |  |  |  |  | 4,937 |  | 13,545 |
2019 |  |  |  |  |  |  |  |  |  | 15,528 |
Total |  | 294,917 |
All outstanding liabilities before 2010, net of reinsurance |  | (2,588 | )
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 98,219 |
Insurance credit and political risk
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
22.6% | 33.6% | 4.0% | 3.4% | 11.3% | 5.3% | 0.3% | —% | 0.2% | (1.3)%
Insurance Professional Lines This reserve class includes the professional lines line of business which provides directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, cyber and privacy insurance, medical malpractice and other financial insurance related covers for public and private commercial enterprises, financial institutions, not-for-profit organizations and other professional service providers. This reserve class also includes discontinued lines - Novae specifically the financial institutions and professional indemnity lines of business that Novae exited or placed into run-off in the first quarter of 2017. This business is predominantly written on a claims-made basis. Typically, this reserve class is anticipated to exhibit medium to long tail claim reporting and payment patterns. With respect to key actuarial assumptions, the Company relies on its loss experience when establishing expected loss ratios and selected loss development patterns. Loss reporting patterns for professional lines business tend to be volatile, causing instability in actuarial indications based on incurred loss data until an accident year or underwriting year matures. Consequently, initial loss reserves for an accident year or underwriting year are generally based on an ELR Method and the consideration of relevant qualitative factors. As accident years and underwriting years mature, the Company increasingly gives more weight to methods that reflect its experience until its selections are based almost exclusively on experience-based methods. The Company evaluates the appropriateness of the transition to experience-based methods at the reserve class level, commencing this transition when it believes that its incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which the Company transitions fully to sole reliance on experience-based methods can vary by reserve class and by year, depending on its assessment of the stability and relevance of such indications. For some professional lines in the insurance segment, the Company also relies on the evaluation of the open claim inventory in addition to the commonly employed actuarial methods when establishing reserves.
Insurance professional lines
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 232,002 |  | $ | 237,156 |  | $ | 234,655 |  | $ | 206,406 |  | $ | 183,237 |  | $ | 158,729 |  | $ | 180,704 |  | $ | 167,917 |  | $ | 187,464 |  | $ | 185,116 |  | $ | 17,194 |  | 5,698
2011 |  | 313,520 |  | 315,326 |  | 333,914 |  | 326,663 |  | 330,773 |  | 343,911 |  | 352,309 |  | 352,792 |  | 350,066 |  | 28,007 |  | 7,229
2012 |  |  | 328,397 |  | 375,164 |  | 376,603 |  | 375,549 |  | 362,534 |  | 364,443 |  | 353,182 |  | 351,283 |  | 34,964 |  | 8,326
2013 |  |  |  | 383,432 |  | 396,819 |  | 398,059 |  | 364,851 |  | 354,190 |  | 356,261 |  | 334,398 |  | 49,144 |  | 9,439
2014 |  |  |  |  | 412,523 |  | 411,232 |  | 421,093 |  | 391,952 |  | 371,407 |  | 353,994 |  | 76,580 |  | 9,802
2015 |  |  |  |  |  | 377,129 |  | 376,865 |  | 382,679 |  | 357,646 |  | 344,239 |  | 87,707 |  | 10,453
2016 |  |  |  |  |  |  | 349,030 |  | 351,990 |  | 358,368 |  | 359,813 |  | 105,971 |  | 11,763
2017 |  |  |  |  |  |  |  | 378,746 |  | 397,760 |  | 437,528 |  | 197,748 |  | 13,418
2018 |  |  |  |  |  |  |  |  | 361,490 |  | 374,683 |  | 217,867 |  | 15,584
2019 |  |  |  |  |  |  |  |  |  | 399,585 |  | 348,212 |  | 11,747
|  |  |  |  |  |  |  |  | Total | $ | 3,490,705 |  |  |
Insurance professional lines
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 7,807 |  | $ | 27,806 |  | $ | 53,493 |  | $ | 72,592 |  | $ | 88,558 |  | $ | 99,039 |  | $ | 109,540 |  | $ | 114,520 |  | $ | 136,510 |  | $ | 142,788 |
2011 |  | 7,402 |  | 32,897 |  | 74,461 |  | 108,598 |  | 165,806 |  | 238,401 |  | 283,510 |  | 294,678 |  | 302,151 |
2012 |  |  | 7,818 |  | 41,328 |  | 100,089 |  | 184,191 |  | 230,913 |  | 253,958 |  | 273,383 |  | 281,715 |
2013 |  |  |  | 17,690 |  | 73,077 |  | 129,671 |  | 175,835 |  | 213,225 |  | 242,860 |  | 263,325 |
2014 |  |  |  |  | 23,529 |  | 70,662 |  | 130,039 |  | 192,405 |  | 223,838 |  | 242,899 |
2015 |  |  |  |  |  | 20,197 |  | 67,725 |  | 137,738 |  | 169,555 |  | 203,542 |
2016 |  |  |  |  |  |  | 15,859 |  | 71,245 |  | 147,370 |  | 192,459 |
2017 |  |  |  |  |  |  |  | 20,946 |  | 71,779 |  | 139,143 |
2018 |  |  |  |  |  |  |  |  | 20,091 |  | 81,986 |
2019 |  |  |  |  |  |  |  |  |  | 25,911 |
Total |  | 1,875,919 |
All outstanding liabilities before 2010, net of reinsurance |  | 65,486 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 1,680,272 |
Insurance professional lines
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
4.7% | 12.8% | 16.6% | 13.9% | 11.4% | 9.5% | 7.6% | 2.8% | 7.0% | 3.4%
Insurance Liability This reserve class includes the liability line of business which primarily targets primary and low to mid-level excess and umbrella commercial liability risks in the U.S. wholesale markets in addition to primary and excess of loss employers, public and products liability business predominately in the U.K. This reserve class also includes discontinued lines - Novae specifically the international liability line of business that Novae exited or placed into run-off in the fourth quarter of 2016. Target industry sectors include construction, manufacturing, transportation and trucking and other services. The delay between the writing of a contract, notification and subsequent settlement of a claim in respect of that contract results in claim reporting and payment patterns that are typically long-tail in nature. A consequence of the claim development tail is that this line of business is particularly exposed, among a number of uncertainties, to the potential for unanticipated levels of claim inflation relative to that assumed when the contracts were written. Factors influencing claim inflation on this class can include, but are not limited to, underlying economic and medical inflation, judicial inflation, mass tort and changing social trends.
Insurance liability
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims | Cumulative number of reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 79,398 |  | $ | 94,222 |  | $ | 98,642 |  | $ | 98,853 |  | $ | 100,133 |  | $ | 98,529 |  | $ | 105,438 |  | $ | 104,465 |  | $ | 104,042 |  | $ | 107,420 |  | $ | 12,287 |  | 4,029
2011 |  | 72,580 |  | 75,329 |  | 83,925 |  | 87,770 |  | 85,792 |  | 84,079 |  | 82,312 |  | 82,657 |  | 85,036 |  | 14,042 |  | 3,571
2012 |  |  | 70,887 |  | 71,683 |  | 74,134 |  | 71,474 |  | 68,658 |  | 75,697 |  | 72,727 |  | 67,237 |  | 18,015 |  | 3,188
2013 |  |  |  | 93,233 |  | 95,306 |  | 95,174 |  | 88,241 |  | 93,681 |  | 95,981 |  | 91,941 |  | 16,997 |  | 3,568
2014 |  |  |  |  | 107,133 |  | 124,303 |  | 129,764 |  | 130,672 |  | 132,019 |  | 131,474 |  | 22,710 |  | 4,865
2015 |  |  |  |  |  | 128,437 |  | 127,353 |  | 137,568 |  | 165,073 |  | 183,088 |  | 43,822 |  | 6,225
2016 |  |  |  |  |  |  | 124,323 |  | 130,188 |  | 128,911 |  | 127,528 |  | 53,401 |  | 7,068
2017 |  |  |  |  |  |  |  | 162,446 |  | 166,573 |  | 183,793 |  | 76,834 |  | 6,710
2018 |  |  |  |  |  |  |  |  | 168,146 |  | 167,614 |  | 95,288 |  | 5,454
2019 |  |  |  |  |  |  |  |  |  | 191,121 |  | 165,431 |  | 3,714
|  |  |  |  |  |  |  |  | Total | $ | 1,336,252 |  |  |
Insurance liability
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 1,030 |  | $ | 15,977 |  | $ | 30,800 |  | $ | 53,594 |  | $ | 61,044 |  | $ | 66,129 |  | $ | 71,803 |  | $ | 86,454 |  | $ | 88,007 |  | $ | 88,476 |
2011 |  | 2,761 |  | 10,540 |  | 20,190 |  | 38,377 |  | 46,074 |  | 54,996 |  | 60,261 |  | 62,150 |  | 67,114 |
2012 |  |  | 1,663 |  | 5,514 |  | 15,411 |  | 30,145 |  | 37,139 |  | 42,740 |  | 46,540 |  | 48,034 |
2013 |  |  |  | 2,359 |  | 23,280 |  | 33,319 |  | 42,049 |  | 60,004 |  | 66,963 |  | 71,982 |
2014 |  |  |  |  | 1,414 |  | 18,640 |  | 49,836 |  | 71,595 |  | 84,374 |  | 93,574 |
2015 |  |  |  |  |  | 5,438 |  | 22,392 |  | 39,637 |  | 92,664 |  | 120,216 |
2016 |  |  |  |  |  |  | 6,319 |  | 23,280 |  | 36,385 |  | 56,446 |
2017 |  |  |  |  |  |  |  | 5,439 |  | 29,564 |  | 59,356 |
2018 |  |  |  |  |  |  |  |  | 9,027 |  | 35,612 |
2019 |  |  |  |  |  |  |  |  |  | 7,337 |
Total |  | 648,147 |
All outstanding liabilities before 2010, net of reinsurance |  | 50,617 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 738,722 |
Insurance liability
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
3.1% | 12.9% | 13.8% | 19.3% | 11.8% | 7.6% | 5.7% | 6.0% | 3.6% | 0.4%
Reinsurance Segment The presentation of net incurred and paid claims development tables by accident year for the reinsurance segment is challenging due to the need to allocate loss information related to proportional treaties to the appropriate accident years. Information related to proportional treaty reinsurance contracts is generally submitted to the Company using quarterly bordereau reporting by underwriting year, with a supplemental listing of large losses. Large losses can be allocated to the corresponding accident years accurately. The remaining losses can generally only be allocated to accident years based on estimated premiums earned and loss reporting patterns. To the extent management’s assumptions and allocation procedures differ from the actual loss development patterns, the actual loss development may differ materially from the net incurred and paid claims development presented in the tables below. The reporting of cumulative claims frequency for the reserve classes within the reinsurance segment is deemed to be impracticable as the information necessary to provide cumulative claims frequency for these reserve classes is not available to the Company. Reinsurance Property and Other This reserve class includes catastrophe, property, agriculture, engineering, marine and other, accident and health, and discontinued lines - Novae. The catastrophe line of business provides protection for most catastrophic losses that are covered in the underlying insurance policies written by the Company's cedants. The underlying policies principally cover property-related exposures but other exposures including workers compensation and personal accident are also covered. The principal perils covered by policies in this portfolio include hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. This business is written on a proportional and an excess of loss basis. The property line of business provides protection for property damage and related losses resulting from natural and man-made perils contained in underlying personal and commercial lines insurance policies written by the Company's cedants. The predominant exposure is to property damage, but other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. The most significant perils covered by policies in this portfolio include windstorm, tornado and earthquake, but other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events are also included. This business is written on a proportional and excess of loss basis. The agriculture line of business provides protection for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. This business is written on a proportional and aggregate stop loss reinsurance basis. The engineering line of business provides protection for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes coverage for losses arising from operational failures of machinery, plant and equipment, and electronic equipment as well as business interruption. The marine and other line of business includes marine and aviation reinsurance. The accident and health line of business includes personal accident, specialty health, accidental death, travel, life and disability reinsurance products which are offered on a proportional and catastrophic or per life excess of events loss basis. . The discontinued lines - Novae includes the international facultative property line of business that Novae exited or placed into run-off in the fourth quarter of 2016. In general, reporting and payment patterns are relatively short-tailed and can be volatile due to the incidence of catastrophe events.
Reinsurance property and other
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 614,748 |  | $ | 601,243 |  | $ | 570,057 |  | $ | 581,838 |  | $ | 584,942 |  | $ | 578,740 |  | $ | 570,796 |  | $ | 568,725 |  | $ | 567,879 |  | $ | 566,112 |  | $ | 3,070 |
2011 |  | 1,111,563 |  | 1,116,669 |  | 1,116,042 |  | 1,084,197 |  | 1,067,100 |  | 1,041,136 |  | 1,039,379 |  | 1,040,759 |  | 1,041,771 |  | 7,782 |
2012 |  |  | 555,459 |  | 523,208 |  | 507,619 |  | 476,989 |  | 461,152 |  | 456,127 |  | 457,531 |  | 454,281 |  | 2,860 |
2013 |  |  |  | 578,725 |  | 560,658 |  | 529,856 |  | 509,526 |  | 503,539 |  | 503,026 |  | 499,736 |  | 1,904 |
2014 |  |  |  |  | 542,601 |  | 560,775 |  | 534,618 |  | 522,102 |  | 520,299 |  | 519,529 |  | 40,234 |
2015 |  |  |  |  |  | 477,301 |  | 464,588 |  | 459,487 |  | 454,225 |  | 450,182 |  | 6,030 |
2016 |  |  |  |  |  |  | 616,621 |  | 635,164 |  | 622,331 |  | 618,643 |  | 11,017 |
2017 |  |  |  |  |  |  |  | 1,076,967 |  | 1,081,415 |  | 1,107,597 |  | 75,459 |
2018 |  |  |  |  |  |  |  |  | 882,829 |  | 1,008,505 |  | 166,887 |
2019 |  |  |  |  |  |  |  |  |  | 959,771 |  | 729,042 |
|  |  |  |  |  |  |  |  | Total | $ | 7,226,127 |  |
Reinsurance property and other
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 116,132 |  | $ | 311,052 |  | $ | 404,287 |  | $ | 434,908 |  | $ | 480,734 |  | $ | 509,769 |  | $ | 534,590 |  | $ | 540,312 |  | $ | 542,590 |  | $ | 546,691 |
2011 |  | 251,855 |  | 587,047 |  | 794,575 |  | 893,746 |  | 923,166 |  | 996,481 |  | 1,011,283 |  | 1,013,858 |  | 1,019,917 |
2012 |  |  | 122,823 |  | 294,298 |  | 366,968 |  | 389,373 |  | 403,926 |  | 413,594 |  | 415,634 |  | 428,152 |
2013 |  |  |  | 107,628 |  | 324,839 |  | 441,138 |  | 471,380 |  | 481,066 |  | 482,480 |  | 483,105 |
2014 |  |  |  |  | 102,356 |  | 352,883 |  | 434,769 |  | 452,193 |  | 458,350 |  | 463,342 |
2015 |  |  |  |  |  | 71,477 |  | 265,896 |  | 368,698 |  | 400,980 |  | 413,477 |
2016 |  |  |  |  |  |  | 128,126 |  | 376,920 |  | 520,779 |  | 563,781 |
2017 |  |  |  |  |  |  |  | 252,360 |  | 723,826 |  | 868,458 |
2018 |  |  |  |  |  |  |  |  | 195,707 |  | 648,622 |
2019 |  |  |  |  |  |  |  |  |  | 161,293 |
Total |  | 5,596,838 |
All outstanding liabilities before 2010, net of reinsurance |  | 14,757 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 1,644,046 |
Reinsurance property and other
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
20.9% | 40.8% | 18.8% | 6.2% | 3.3% | 3.1% | 1.6% | 1.3% | 0.5% | 0.7%
Reinsurance Credit and Surety This reserve class includes the credit and surety line of business which provides reinsurance of trade credit insurance products and includes proportional and excess of loss structures. The underlying insurance indemnifies sellers of goods and services in the event of a payment default by the buyer of those goods and services. Surety reinsurance provides protection for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligations in a variety of jurisdictions around the world. The Company also provides mortgage reinsurance to mortgage guaranty insurers and U.S. government sponsored entities for losses related to credit risk transfer into the private sector. Initial and most recent underwriting year loss projections are generally based on the ELR Method, with consideration given to qualitative factors. Given that there is a quicker and more stable reporting pattern for trade credit and mortgage business, the Company generally commences the transition to experience-based methods sooner for these lines of business than for surety business.
Reinsurance credit and surety
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 119,180 |  | $ | 99,460 |  | $ | 92,848 |  | $ | 90,029 |  | $ | 85,856 |  | $ | 78,247 |  | $ | 76,937 |  | $ | 74,913 |  | $ | 73,672 |  | $ | 71,911 |  | $ | 1,751 |
2011 |  | 120,572 |  | 106,495 |  | 104,616 |  | 111,485 |  | 109,662 |  | 101,236 |  | 99,412 |  | 98,885 |  | 95,813 |  | 2,439 |
2012 |  |  | 159,507 |  | 147,627 |  | 150,137 |  | 147,406 |  | 139,097 |  | 131,120 |  | 127,576 |  | 124,552 |  | 3,883 |
2013 |  |  |  | 164,207 |  | 152,467 |  | 143,719 |  | 139,886 |  | 135,762 |  | 124,533 |  | 124,674 |  | 3,546 |
2014 |  |  |  |  | 136,419 |  | 135,525 |  | 142,703 |  | 139,015 |  | 127,683 |  | 126,397 |  | 6,726 |
2015 |  |  |  |  |  | 160,132 |  | 165,861 |  | 160,675 |  | 156,635 |  | 137,848 |  | 8,335 |
2016 |  |  |  |  |  |  | 141,639 |  | 141,128 |  | 148,943 |  | 123,366 |  | 9,849 |
2017 |  |  |  |  |  |  |  | 135,040 |  | 132,618 |  | 126,786 |  | 22,830 |
2018 |  |  |  |  |  |  |  |  | 111,692 |  | 120,289 |  | 38,357 |
2019 |  |  |  |  |  |  |  |  |  | 74,689 |  | 39,291 |
|  |  |  |  |  |  |  |  | Total | $ | 1,126,325 |  |
Reinsurance credit and surety
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 28,190 |  | $ | 48,274 |  | $ | 59,074 |  | $ | 59,804 |  | $ | 61,466 |  | $ | 62,585 |  | $ | 64,020 |  | $ | 65,024 |  | $ | 65,346 |  | $ | 65,781 |
2011 |  | 22,411 |  | 53,392 |  | 69,851 |  | 77,392 |  | 81,930 |  | 84,106 |  | 86,419 |  | 87,799 |  | 88,615 |
2012 |  |  | 49,482 |  | 85,228 |  | 99,046 |  | 104,876 |  | 108,391 |  | 110,150 |  | 111,441 |  | 113,402 |
2013 |  |  |  | 32,399 |  | 76,743 |  | 91,486 |  | 98,039 |  | 105,692 |  | 107,555 |  | 112,520 |
2014 |  |  |  |  | 35,552 |  | 61,076 |  | 85,984 |  | 95,079 |  | 102,670 |  | 107,082 |
2015 |  |  |  |  |  | 32,907 |  | 81,685 |  | 99,774 |  | 116,756 |  | 118,670 |
2016 |  |  |  |  |  |  | 42,028 |  | 73,201 |  | 92,187 |  | 101,822 |
2017 |  |  |  |  |  |  |  | 37,295 |  | 73,944 |  | 90,495 |
2018 |  |  |  |  |  |  |  |  | 38,990 |  | 68,505 |
2019 |  |  |  |  |  |  |  |  |  | 19,281 |
Total |  | 886,173 |
All outstanding liabilities before 2010, net of reinsurance |  | 16,847 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 256,999 |
Reinsurance credit and surety
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
30.2% | 28.8% | 14.6% | 6.6% | 3.9% | 2.1% | 2.4% | 1.5% | 0.7% | 0.6%
Reinsurance Professional Lines This reserve class includes the professional line of business which provides protection for directors' and officers' liability, employment practices liability, medical malpractice, professional indemnity, environmental liability and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. This business is written on a proportional and excess of loss basis. Typically, this reserve class is anticipated to exhibit medium to long-tail claim reporting and payment patterns. With respect to key actuarial assumptions, the Company relies on its experience when establishing expected loss ratios and selected loss development patterns. Loss reporting patterns for professional lines business tend to be volatile, causing instability in actuarial indications based on incurred loss data until an underwriting year matures. Consequently, initial loss reserves for an underwriting year are generally based on the ELR Method and the consideration of relevant qualitative factors. As underwriting years mature, the Company increasingly gives more weight to methods that reflect its experience until its selections are based almost exclusively on experience-based methods. The Company evaluates the appropriateness of the transition to experience-based methods at the reserve class level, commencing this transition when it believes that its incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which the Company transitions fully to sole reliance on experience-based methods can vary by reserve class and by year, depending on its assessment of the stability and relevance of such indications.
Reinsurance professional lines
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 209,934 |  | $ | 210,173 |  | $ | 211,361 |  | $ | 214,417 |  | $ | 214,185 |  | $ | 196,939 |  | $ | 189,415 |  | $ | 179,762 |  | $ | 166,044 |  | $ | 167,376 |  | $ | 5,701 |
2011 |  | 201,013 |  | 201,364 |  | 202,620 |  | 211,367 |  | 209,088 |  | 208,219 |  | 200,437 |  | 177,405 |  | 166,951 |  | 6,047 |
2012 |  |  | 209,548 |  | 216,088 |  | 221,544 |  | 223,926 |  | 222,626 |  | 212,594 |  | 213,984 |  | 206,791 |  | 18,318 |
2013 |  |  |  | 209,292 |  | 214,396 |  | 215,562 |  | 213,745 |  | 213,182 |  | 205,733 |  | 181,563 |  | 35,871 |
2014 |  |  |  |  | 219,376 |  | 219,415 |  | 219,345 |  | 219,242 |  | 233,611 |  | 230,042 |  | 27,940 |
2015 |  |  |  |  |  | 212,031 |  | 212,024 |  | 214,344 |  | 225,139 |  | 231,980 |  | 63,050 |
2016 |  |  |  |  |  |  | 195,190 |  | 196,293 |  | 200,020 |  | 227,952 |  | 67,496 |
2017 |  |  |  |  |  |  |  | 155,137 |  | 155,759 |  | 162,116 |  | 72,727 |
2018 |  |  |  |  |  |  |  |  | 146,387 |  | 148,921 |  | 132,683 |
2019 |  |  |  |  |  |  |  |  |  | 139,150 |  | 130,571 |
|  |  |  |  |  |  |  |  | Total | $ | 1,862,842 |  |
Reinsurance professional lines
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 1,757 |  | $ | 12,026 |  | $ | 31,243 |  | $ | 52,138 |  | $ | 76,798 |  | $ | 107,363 |  | $ | 123,981 |  | $ | 130,610 |  | $ | 138,047 |  | $ | 142,994 |
2011 |  | 1,510 |  | 11,822 |  | 30,272 |  | 57,230 |  | 84,845 |  | 103,052 |  | 119,767 |  | 130,059 |  | 136,492 |
2012 |  |  | 778 |  | 10,392 |  | 29,622 |  | 53,629 |  | 85,972 |  | 107,224 |  | 131,853 |  | 145,866 |
2013 |  |  |  | 1,064 |  | 12,073 |  | 30,491 |  | 64,958 |  | 81,630 |  | 104,904 |  | 123,282 |
2014 |  |  |  |  | 2,019 |  | 13,073 |  | 48,854 |  | 74,577 |  | 109,239 |  | 147,194 |
2015 |  |  |  |  |  | 3,134 |  | 13,505 |  | 41,539 |  | 79,296 |  | 112,042 |
2016 |  |  |  |  |  |  | 1,768 |  | 20,534 |  | 52,617 |  | 95,283 |
2017 |  |  |  |  |  |  |  | 2,813 |  | 14,921 |  | 39,915 |
2018 |  |  |  |  |  |  |  |  | 271 |  | 2,593 |
2019 |  |  |  |  |  |  |  |  |  | 335 |
Total |  | 945,996 |
All outstanding liabilities before 2010, net of reinsurance |  | 52,321 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 969,167 |
Reinsurance professional lines
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
0.8% | 5.5% | 12.4% | 15.1% | 14.2% | 13.8% | 10.5% | 5.7% | 4.2% | 3.0%
Reinsurance Motor This reserve class includes the motor line of business which provides protection to insurers for motor liability and motor property damage losses arising from any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. This reserve class also includes discontinued lines - Novae specifically the motor reinsurance line of business that Novae exited or placed into run-off in the first quarter of 2017. The Company offers traditional proportional and non-proportional reinsurance as well as structured solutions predominantly relating to European exposures. The business written on a proportional basis has expanded significantly since 2010 and now represents the majority of the premium in this line of business. Most of the premium relates to a relatively small number of large United Kingdom ("U.K.") quota share reinsurance treaty contracts. The motor proportional class generally has a significantly shorter reported and payment pattern, relative to the motor non-proportional class. The motor non-proportional business consists of standard excess of loss contracts written for cedants in several European countries with most of the premium related to two major markets, U.K. and France. Since 2009/2010, an increasing number of large bodily injury settlements in the U.K. market were settled using indexed annuities (Periodical Payment Orders "PPOs"). This led to a materially longer development tail on the older accident years for the U.K. non-proportional motor book. This also resulted in the inclusion of capitalization clauses on a number of U.K. motor treaties to help mitigate the lengthening of the development tail on more recent accident years. In 2017, the U.K. Ministry of Justice announced a decrease in the discount rate to be used to calculate lump sum awards in U.K. bodily injury cases, known as the Ogden Rate. Effective March 20, 2017, the Ogden rate changed from plus 2.5% to minus 0.75%. This resulted in a trend toward a lower number of claims settlements using PPOs and an increase in projected ultimate losses, particularly related to recent accident years. Effective August 5, 2019, the Ogden rate changed from minus 0.75% to minus 0.25%. This resulted in a decrease in projected ultimate losses, particularly related to recent accident years.
Reinsurance motor
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 100,219 |  | $ | 107,538 |  | $ | 108,183 |  | $ | 107,264 |  | $ | 101,343 |  | $ | 96,235 |  | $ | 86,803 |  | $ | 83,112 |  | $ | 80,901 |  | $ | 80,028 |  | $ | 21,660 |
2011 |  | 158,475 |  | 162,069 |  | 166,112 |  | 172,062 |  | 168,225 |  | 159,626 |  | 148,536 |  | 143,846 |  | 136,077 |  | 18,030 |
2012 |  |  | 180,137 |  | 170,848 |  | 159,446 |  | 151,899 |  | 147,041 |  | 137,585 |  | 134,685 |  | 126,507 |  | 15,534 |
2013 |  |  |  | 164,927 |  | 162,475 |  | 150,620 |  | 141,237 |  | 137,791 |  | 135,003 |  | 126,050 |  | 13,828 |
2014 |  |  |  |  | 185,279 |  | 186,947 |  | 182,237 |  | 179,510 |  | 174,719 |  | 171,403 |  | 6,302 |
2015 |  |  |  |  |  | 225,974 |  | 222,178 |  | 226,319 |  | 227,844 |  | 216,610 |  | 12,291 |
2016 |  |  |  |  |  |  | 249,616 |  | 268,525 |  | 270,264 |  | 259,959 |  | 21,855 |
2017 |  |  |  |  |  |  |  | 370,778 |  | 380,509 |  | 362,721 |  | 50,597 |
2018 |  |  |  |  |  |  |  |  | 363,917 |  | 363,733 |  | 83,024 |
2019 |  |  |  |  |  |  |  |  |  | 339,476 |  | 165,127 |
|  |  |  |  |  |  |  |  | Total | $ | 2,182,564 |  |
Reinsurance motor
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 7,201 |  | $ | 12,601 |  | $ | 18,149 |  | $ | 21,713 |  | $ | 25,153 |  | $ | 29,429 |  | $ | 32,717 |  | $ | 33,769 |  | $ | 34,839 |  | $ | 37,041 |
2011 |  | 23,943 |  | 47,991 |  | 62,861 |  | 73,562 |  | 80,349 |  | 86,466 |  | 91,165 |  | 92,201 |  | 94,155 |
2012 |  |  | 29,381 |  | 53,959 |  | 68,970 |  | 78,880 |  | 85,488 |  | 89,646 |  | 91,982 |  | 93,194 |
2013 |  |  |  | 34,133 |  | 54,274 |  | 68,502 |  | 78,744 |  | 84,512 |  | 90,165 |  | 93,234 |
2014 |  |  |  |  | 43,628 |  | 75,543 |  | 95,563 |  | 103,909 |  | 114,300 |  | 124,157 |
2015 |  |  |  |  |  | 58,231 |  | 95,172 |  | 115,903 |  | 133,528 |  | 149,813 |
2016 |  |  |  |  |  |  | 61,321 |  | 106,934 |  | 131,606 |  | 150,004 |
2017 |  |  |  |  |  |  |  | 72,859 |  | 137,217 |  | 168,855 |
2018 |  |  |  |  |  |  |  |  | 84,564 |  | 145,561 |
2019 |  |  |  |  |  |  |  |  |  | 90,291 |
Total |  | 1,146,305 |
All outstanding liabilities before 2010, net of reinsurance |  | 193,345 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 1,229,604 |
Reinsurance motor
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
22.3% | 16.4% | 10.1% | 6.9% | 5.5% | 4.7% | 3.0% | 1.0% | 1.4% | 2.8%
Reinsurance Liability This reserve class includes the liability line of business which provides protection to insurers of admitted casualty business, excess and surplus lines casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, workers' compensation, auto liability and excess casualty. This reserve class includes discontinued lines - Novae specifically the general liability reinsurance line of business that Novae exited or placed into run-off in the first quarter of 2017. Claim reporting and payment patterns are typically long-tail in nature and, therefore, subject to increased uncertainty surrounding future loss development. In particular, claims can be subject to inflation from a number of sources including, but not limited to, economic and medical inflation, judicial inflation and changing social trends.
Reinsurance liability
| Incurred claims and allocated claim adjustment expenses, net of reinsurance | At December 31, 2019
| For the years ended December 31, | Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 172,823 |  | $ | 171,775 |  | $ | 183,347 |  | $ | 183,715 |  | $ | 202,007 |  | $ | 190,921 |  | $ | 181,962 |  | $ | 165,983 |  | $ | 159,230 |  | $ | 156,113 |  | $ | 13,119 |
2011 |  | 172,189 |  | 172,201 |  | 173,984 |  | 191,668 |  | 197,766 |  | 194,604 |  | 193,784 |  | 191,873 |  | 189,014 |  | 16,614 |
2012 |  |  | 166,386 |  | 162,945 |  | 167,366 |  | 172,341 |  | 173,501 |  | 170,979 |  | 164,309 |  | 158,342 |  | 16,994 |
2013 |  |  |  | 171,271 |  | 175,174 |  | 182,201 |  | 184,240 |  | 183,915 |  | 177,112 |  | 157,236 |  | 24,545 |
2014 |  |  |  |  | 199,433 |  | 202,939 |  | 204,657 |  | 200,557 |  | 199,340 |  | 197,187 |  | 53,905 |
2015 |  |  |  |  |  | 214,735 |  | 215,099 |  | 216,061 |  | 215,889 |  | 213,662 |  | 67,030 |
2016 |  |  |  |  |  |  | 240,440 |  | 245,820 |  | 250,868 |  | 254,154 |  | 99,784 |
2017 |  |  |  |  |  |  |  | 276,929 |  | 270,589 |  | 279,172 |  | 133,392 |
2018 |  |  |  |  |  |  |  |  | 264,570 |  | 268,506 |  | 168,425 |
2019 |  |  |  |  |  |  |  |  |  | 263,525 |  | 214,542 |
|  |  |  |  |  |  |  |  | Total | $ | 2,136,911 |  |
Reinsurance liability
| Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
| For the years ended December 31,
Accident year | 2010 unaudited | 2011 unaudited | 2012 unaudited | 2013 unaudited | 2014 unaudited | 2015 unaudited | 2016 unaudited | 2017 unaudited | 2018 unaudited | 2019
2010 | $ | 2,479 |  | $ | 17,652 |  | $ | 46,199 |  | $ | 62,287 |  | $ | 83,792 |  | $ | 97,430 |  | $ | 108,748 |  | $ | 119,678 |  | $ | 128,386 |  | $ | 130,566 |
2011 |  | 5,197 |  | 21,291 |  | 40,009 |  | 70,083 |  | 92,477 |  | 112,347 |  | 123,403 |  | 135,627 |  | 141,483 |
2012 |  |  | 3,541 |  | 12,800 |  | 28,384 |  | 58,777 |  | 78,235 |  | 101,164 |  | 115,618 |  | 125,979 |
2013 |  |  |  | 5,971 |  | 22,235 |  | 52,328 |  | 69,055 |  | 88,262 |  | 102,593 |  | 113,127 |
2014 |  |  |  |  | 7,083 |  | 28,661 |  | 48,420 |  | 70,138 |  | 89,412 |  | 109,974 |
2015 |  |  |  |  |  | 7,270 |  | 27,455 |  | 54,517 |  | 80,865 |  | 108,961 |
2016 |  |  |  |  |  |  | 11,874 |  | 37,703 |  | 69,558 |  | 111,870 |
2017 |  |  |  |  |  |  |  | 12,438 |  | 42,147 |  | 78,477 |
2018 |  |  |  |  |  |  |  |  | 19,303 |  | 49,795 |
2019 |  |  |  |  |  |  |  |  |  | 19,157 |
Total |  | 989,389 |
All outstanding liabilities before 2010, net of reinsurance |  | 80,768 |
Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 1,228,290 |
Reinsurance liability
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10
4.1% | 9.6% | 13.2% | 13.7% | 12.2% | 10.6% | 7.2% | 6.7% | 4.4% | 1.4%
Reconciliation of Loss Development Tables to Consolidated Balance Sheet The following table reconciles the reserve for losses and loss expenses at December 31, 2019 included in the loss development tables to the reserve for losses and loss expenses reported in the consolidated balance sheet:
Reconciliation of the disclosure of incurred and paid claims development to the liability for unpaid claims and claim adjustment expenses
|  | At December 31, 2019
|  | Net outstanding liabilities |  | Reinsurance recoverable on unpaid claims |  | Gross outstanding liabilities
Insurance segment |  |  |  |  |  |
Property and other |  | $ | 579,613 |  |  | $ | 358,193 |  |  | $ | 937,806 |
Marine |  | 350,692 |  |  | 164,005 |  |  | 514,697 |
Aviation |  | 86,940 |  |  | 36,094 |  |  | 123,034 |
Credit and political risk |  | 98,219 |  |  | 34,615 |  |  | 132,834 |
Professional lines |  | 1,680,272 |  |  | 1,105,684 |  |  | 2,785,956 |
Liability |  | 738,722 |  |  | 1,108,382 |  |  | 1,847,104 |
Total insurance segment |  | 3,534,458 |  |  | 2,806,973 |  |  | 6,341,431 |
Reinsurance segment |  |  |  |  |  |
Property and other |  | 1,644,046 |  |  | 448,885 |  |  | 2,092,931 |
Credit and surety |  | 256,999 |  |  | 64,475 |  |  | 321,474 |
Professional lines |  | 969,167 |  |  | 135,505 |  |  | 1,104,672 |
Motor |  | 1,229,604 |  |  | 209,495 |  |  | 1,439,099 |
Liability |  | 1,228,290 |  |  | 212,423 |  |  | 1,440,713 |
Total reinsurance segment |  | 5,328,106 |  |  | 1,070,783 |  |  | 6,398,889 |
Total |  | $ | 8,862,564 |  |  | $ | 3,877,756 |  |  | 12,740,320 |
Unallocated claims adjustment expenses |  |  |  |  |  | 140,650 |
Foreign exchange and other(1) |  |  |  |  |  | 27,202 |
(Ceded)/assumed reserves related to retroactive transactions |  |  |  |  |  | (156,091 | )
Total liability for unpaid claims and claims adjustment expense |  |  |  |  |  | $ | 12,752,081 |
(1) Non-U.S. dollar denominated loss data is converted to U.S dollar at the rates of exchange in effect at the balance sheet date for material underlying currencies. Fluctuations in currency exchange rates may cause material shifts in loss development. Reserves for losses and loss expenses disclosed in the consolidated balance sheets are also remeasured using rates of exchange in effect at the balance sheet date.

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- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
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