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RESERVE FOR LOSSES AND LOSS EXPENSES | 3 Months Ended
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Mar. 31, 2022
Insurance [Abstract] |
RESERVE FOR LOSSES AND LOSS EXPENSES | Reserve Roll-Forward The following table presents a reconciliation of the Company's beginning and ending gross reserve for losses and loss expenses and net reserves for unpaid losses and loss expenses:
|  | Three months ended March 31, |  |
|  | 2022 |  | 2021 |  |
| Gross reserve for losses and loss expenses, beginning of period | $ | 14,653,094 |  |  | $ | 13,926,766 |  |  |
| Less reinsurance recoverable on unpaid losses and loss expenses, beginning of period | (5,017,611) |  |  | (4,496,641) |  |  |
| Net reserve for unpaid losses and loss expenses, beginning of period | 9,635,483 |  |  | 9,430,125 |  |  |
| Net incurred losses and loss expenses related to: |  |  |  |  |
| Current year | 741,655 |  |  | 720,035 |  |  |
| Prior years | (8,956) |  |  | (5,317) |  |  |
|  | 732,699 |  |  | 714,718 |  |  |
| Net paid losses and loss expenses related to: |  |  |  |  |
| Current year | (32,477) |  |  | (26,944) |  |  |
| Prior years | (750,969) |  |  | (666,139) |  |  |
|  | (783,446) |  |  | (693,083) |  |  |
| Foreign exchange and other | (71,661) |  |  | 40,282 |  |  |
| Net reserve for unpaid losses and loss expenses, end of period | 9,513,075 |  |  | 9,492,042 |  |  |
| Reinsurance recoverable on unpaid losses and loss expenses, end of period | 4,957,080 |  |  | 4,533,232 |  |  |
| Gross reserve for losses and loss expenses, end of period | $ | 14,470,155 |  |  | $ | 14,025,274 |  |  |
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 the three months ended March 31, 2022, the Company recognized catastrophe and weather-related losses, net of reinsurance, of $60 million (2021: $110 million), including $30 million attributable to the Russia-Ukraine war. At March 31, 2021, foreign exchange and other included a reduction in reinsurance recoverable on unpaid losses of $49 million related to the Reinsurance to Close of the 2018 year of account of Syndicate 2007. Estimates for Significant Catastrophe Events At March 31, 2022, net reserves for losses and loss expenses included estimated amounts for numerous catastrophe events. The magnitude and complexity of losses arising from certain of these events 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. These events include the Russia-Ukraine war in 2022, Hurricane Ida, U.S. Winter Storms Uri and Viola and July European Floods in 2021, the COVID-19 pandemic, Hurricanes Laura, Sally, Zeta and Delta, the Midwest derecho and wildfires across the West Coast of the United States in 2020, Japanese Typhoons Hagibis, Faxai and Tapah, Hurricane Dorian and the Australia Wildfires in 2019 and Hurricanes Michael and Florence, California Wildfires and Typhoon Jebi in 2018. As a result, actual losses for these events may ultimately differ materially from current estimates. Prior Year Reserve Development The Company's net favorable prior year reserve development arises from changes to estimates of 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:
|  | Three months ended March 31, |  |  |  |
|  | 2022 |  | 2021 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Insurance | $ | 7,062 |  |  | $ | 1,505 |  |  |  |  |  |  |
| Reinsurance | 1,894 |  |  | 3,812 |  |  |  |  |  |  |
| Total | $ | 8,956 |  |  | $ | 5,317 |  |  |  |  |  |  |
The following sections provide further details on net prior year reserve development by segment, reserving class and accident year: Insurance Segment: The following table maps 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 |  |  |  |  |  |
Prior year reserve development by reserve class was as follows:
|  | Three months ended March 31, |  |  |  |
|  | 2022 |  | 2021 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Property and other | $ | 11,692 |  |  | $ | 15,391 |  |  |  |  |  |  |
| Marine | 11,666 |  |  | 11,875 |  |  |  |  |  |  |
| Aviation | 2,980 |  |  | 1,035 |  |  |  |  |  |  |
| Credit and political risk | 895 |  |  | (5,371) |  |  |  |  |  |  |
| Professional lines | (6,622) |  |  | (14,593) |  |  |  |  |  |  |
| Liability | (13,549) |  |  | (6,832) |  |  |  |  |  |  |
| Total | $ | 7,062 |  |  | $ | 1,505 |  |  |  |  |  |  |
For the three months ended March 31, 2022, the Company recognized $7 million of net favorable prior year reserve development, the principal components of which were: •$12 million of net favorable prior year reserve development on property and other business primarily due to decreases in loss estimates attributable to specific large claims related to the 2017 accident year, and better than expected loss emergence attributable to 2018 catastrophe events, and the accident and health book of business mainly related to the 2020 and 2021 accident years. •$12 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence attributable to the cargo and offshore energy books of business mainly related to the 2018 and 2021 accident years. •$14 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the program book of business mainly related to the 2016 and 2018 accident years and an increase in the loss estimate attributable to a specific large claim related to the 2017 accident year. •$7 million of net adverse prior year reserve development on professional lines business primarily due to increases in loss estimates attributable to specific large claims related to the 2015 and 2017 accident years, and reserve strengthening within runoff lines of business mainly related to the 2016 and 2018 accident years. For the three months ended March 31, 2021, the Company recognized $2 million of net favorable prior year reserve development, the principal components of which were: •$15 million of net favorable prior year reserve development on property and other business primarily due to better than expected loss emergence attributable to 2017, 2019 and 2020 catastrophe events. •$12 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence attributable to cargo and energy offshore books of business mainly related to the 2017 and 2020 accident years. •$15 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the U.S. commercial management solutions, European program and European management liability solutions books of business mainly related to the 2018 accident year. •$7 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the program book of business mainly related to the 2018 accident year. Reinsurance Segment: The following table maps lines of business to reserve classes and the expected claim tails:
| 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 aviation | X |  |  |  |  |
| Accident and health | X |  |  |  |  |
Prior year reserve development by reserve class was as follows:
|  | Three months ended March 31, |  |  |  |
|  | 2022 |  | 2021 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Property and other | $ | 24,786 |  |  | $ | 969 |  |  |  |  |  |  |
| Credit and surety | 7,465 |  |  | (4,939) |  |  |  |  |  |  |
| Professional lines | (24,522) |  |  | (2,204) |  |  |  |  |  |  |
| Motor | (1,730) |  |  | 17,140 |  |  |  |  |  |  |
| Liability | (4,105) |  |  | (7,154) |  |  |  |  |  |  |
| Total | $ | 1,894 |  |  | $ | 3,812 |  |  |  |  |  |  |
For the three months ended March 31, 2022, the Company recognized $2 million of net favorable prior year reserve development, the principal components of which were: •$25 million of net favorable prior year development on property and other business primarily due to better than expected loss emergence attributable to 2018, 2019 and 2021 catastrophe events, and an aggregate excess of loss treaty. •$7 million of net favorable prior year reserve development on credit and surety business primarily due to better than expected loss emergence related to recent accidents years. •$25 million of net adverse prior year development on professional lines business primarily due to an increase in loss estimates attributable to one cedant related to the 2016 to 2018 accident years and a specific large claim related to the 2017 accident year. •$4 million of net adverse prior year development on liability business primarily due to an increase in loss estimates attributable to a specific large claim related to the 2018 accident year. For the three months ended March 31, 2021, the Company recognized $4 million of net favorable prior year reserve development, the principal components of which were: •$17 million of net favorable prior year reserve development on motor business primarily due to non-proportional treaty business related to several accident years. •$7 million of net adverse prior year reserve development on liability business primarily due to an increase in the loss estimate attributable to a specific large claim related to the 2017 accident year. •$5 million of net adverse prior year reserve development on credit and surety business primarily due to an increase in the loss estimate attributable to a specific large claim related to the 2020 accident year.

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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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