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RESERVE FOR LOSSES AND LOSS EXPENSES | 6 Months Ended
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Jun. 30, 2024
Insurance [Abstract] |
RESERVE FOR LOSSES AND LOSS EXPENSES | 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 reserve for unpaid losses and loss expenses:
|  | Six months ended June 30, |  |
|  | 2024 |  | 2023 |  |
| Gross reserve for losses and loss expenses, beginning of period | $ | 16,434,018 |  |  | $ | 15,168,863 |  |  |
| Less reinsurance recoverable on unpaid losses and loss expenses, beginning of period | (6,323,083) |  |  | (5,831,172) |  |  |
| Net reserve for unpaid losses and loss expenses, beginning of period | 10,110,935 |  |  | 9,337,691 |  |  |
| Net incurred losses and loss expenses related to: |  |  |  |  |
| Current year | 1,494,659 |  |  | 1,467,256 |  |  |
| Prior years | — |  |  | (10,357) |  |  |
|  | 1,494,659 |  |  | 1,456,899 |  |  |
| Net paid losses and loss expenses related to: |  |  |  |  |
| Current year | (159,455) |  |  | (129,414) |  |  |
| Prior years | (1,251,637) |  |  | (1,210,101) |  |  |
|  | (1,411,092) |  |  | (1,339,515) |  |  |
| Foreign exchange and other | (47,452) |  |  | 98,814 |  |  |
| Net reserve for unpaid losses and loss expenses, end of period | 10,147,050 |  |  | 9,553,889 |  |  |
| Reinsurance recoverable on unpaid losses and loss expenses, end of period | 6,591,821 |  |  | 5,865,609 |  |  |
| Gross reserve for losses and loss expenses, end of period | $ | 16,738,871 |  |  | $ | 15,419,498 |  |  |
Estimates for Significant Catastrophe Events At June 30, 2024, 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 Hurricane Ian, Winter Storm Elliot, June European Convective Storms, the Russia-Ukraine war and COVID-19. As a result, actual losses for these events may ultimately differ materially from current estimates. During the six months ended June 30, 2024, the Company recognized catastrophe and weather-related losses, net of reinsurance, of $67 million (2023: $70 million). Prior Year Reserve Development The Company's net 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 June 30, |  | Six months ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |
| Insurance | $ | — |  |  | $ | 2,784 |  |  | $ | — |  |  | $ | 3,825 |  |
| Reinsurance | — |  |  | 3,535 |  |  | — |  |  | 6,532 |  |
| Total | $ | — |  |  | $ | 6,319 |  |  | $ | — |  |  | $ | 10,357 |  |
The following sections provide further details on net prior year reserve development by segment, line of business and accident year: Insurance Segment: Prior year reserve development by line of business was as follows:
|  | Three months ended June 30, |  | Six months ended June 30, |  |  |  |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Property | $ | — |  |  | $ | (208) |  |  | $ | 8,011 |  |  | $ | 5,692 |  |  |  |  |  |  |
| Accident and health | — |  |  | (248) |  |  | — |  |  | (552) |  |  |  |  |  |  |
| Marine and aviation | — |  |  | 2,682 |  |  | (8,011) |  |  | 15,903 |  |  |  |  |  |  |
| Cyber | — |  |  | 676 |  |  | — |  |  | 9,128 |  |  |  |  |  |  |
| Professional lines | — |  |  | (3,498) |  |  | — |  |  | (16,092) |  |  |  |  |  |  |
| Credit and political risk | — |  |  | 8,430 |  |  | — |  |  | 12,949 |  |  |  |  |  |  |
| Liability | — |  |  | (5,050) |  |  | — |  |  | (23,203) |  |  |  |  |  |  |
| Total | $ | — |  |  | $ | 2,784 |  |  | $ | — |  |  | $ | 3,825 |  |  |  |  |  |  |
2024 For the three months ended June 30, 2024, net prior year reserve development of $nil was recognized. 2023 For the three months ended June 30, 2023, the Co mpany recognized $3 million of net favorable prior year reserve development, the principal components of which were: •$8 million of net favorable prior year reserve development on credit and political risk business primarily due to better than expected loss emergence mainly related to the 2018 through 2022 accident years. •$3 million of net favorable prior year reserve development on marine and aviation business primarily due to better than expected loss emergence attributable to the marine cargo book of business related to 2022 catastrophe events, partially offset by increases in the loss estimates within the marine liability book of business related to the 2020 and 2021 accident years. •$5 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the U.S. excess casualty general liability and U.S. programs books of business mainly related to the 2017 through 2019 accident years. •$3 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the U.S. financial institutions book of business mainly related to the 2009 and 2018 accident years, U.S. commercial management solutions book of business mainly related to the 2017 through 2019 accident years, and an increase in the loss estimate attributable to a specific large claim within the U.S. design professional and environmental book of business mainly related to the 2019 accident year. 2024 For the six months ended June 30, 2024, net prior year reserve development of $nil was recognized, the principal components of which were: •$8 million of net favorable prior year reserve development on property business primarily due to better than expected loss emergence mainly related to the 2021 and 2022 accident years. •$8 million of net adverse prior year reserve development on marine and aviation business primarily due to an increase in the loss estimate attributable to a specific large claim related to the 2019 accident year. 2023 For the six months ended June 30, 2023, the Company recognized $4 million of net favorable prior year reserve development, the principal components of which were: •$16 million of net favorable prior year reserve development on marine and aviation business primarily due to better than expected loss emergence attributable to the marine cargo book of business related to 2022 catastrophe events, partially offset by increases in the loss estimates within the marine liability book of business related to the 2020 and 2021 accident years. •$13 million of net favorable prior year reserve development on credit and political risk business primarily due to a decrease in the loss estimate attributable to a specific large claim related to the 2020 accident year and better than expected loss emergence related to recent accident years. •$9 million of net favorable prior year reserve development on cyber business primarily due to better than expected loss emergence mainly related to 2019 and older accident years. •$6 million of net favorable prior year reserve development on property business primarily due to better than expected loss emergence attributable to 2022 catastrophe events, partially offset by reserve strengthening related to the 2021 accident year. •$23 million of net adverse prior year reserve developmen t on liability business primarily due to reserve strengthening within the U.S. primary casualty book of business mainly related to the 2015, 2018 and 2021 accident years, and U.S. excess casualty general liability and U.S. programs book of business mainly related to the 2017 through 2019 accident years. •$16 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the U.S. financial institutions book of business mainly related to the 2009 and 2018 accident years, U.S. commercial management solutions book of business mainly related the 2017 through 2019 accident years, and U.S. design professional and environmental book of business mainly related to the 2019 accident year. Reinsurance Segment: Prior year reserve development by line of business was as follows:
|  | Three months ended June 30, |  | Six months ended June 30, |  |  |  |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Accident and health | $ | — |  |  | $ | 7,284 |  |  | $ | — |  |  | $ | 14,273 |  |  |  |  |  |  |
| Agriculture | — |  |  | 2,122 |  |  | — |  |  | 14,013 |  |  |  |  |  |  |
| Marine and aviation | — |  |  | 5,197 |  |  | — |  |  | 4,947 |  |  |  |  |  |  |
| Professional lines | — |  |  | (10,504) |  |  | — |  |  | (13,728) |  |  |  |  |  |  |
| Credit and surety | — |  |  | (582) |  |  | — |  |  | (1,128) |  |  |  |  |  |  |
| Motor | — |  |  | (4,825) |  |  | — |  |  | (21,946) |  |  |  |  |  |  |
| Liability | — |  |  | (7,017) |  |  | — |  |  | (39,870) |  |  |  |  |  |  |
| Run-off lines |  |  |  |  |  |  |  |  |  |  |  |  |
| Catastrophe | — |  |  | 7,487 |  |  | — |  |  | 38,546 |  |  |  |  |  |  |
| Property | — |  |  | 2,264 |  |  | — |  |  | 9,147 |  |  |  |  |  |  |
| Engineering | — |  |  | 2,109 |  |  | — |  |  | 2,278 |  |  |  |  |  |  |
| Total run-off lines | — |  |  | 11,860 |  |  | — |  |  | 49,971 |  |  |  |  |  |  |
| Total | $ | — |  |  | $ | 3,535 |  |  | $ | — |  |  | $ | 6,532 |  |  |  |  |  |  |
2024 For the three months ended June 30, 2024, net prior year reserve development of $nil was recognized. 2023 For the three months ended June 30, 2023, the Company recognized $4 million of net favorable prior year reserve development, the principal components of which were: •$7 million of net favorable development on accident and health business primarily due to better than expected loss emergence mainly related to the 2022 accident year, partially offset by reserve strengthening mainly related to the 2021 accident year. •$5 million of net favorable development on marine and aviation business primarily due to better than expected loss emergence mainly related to the 2020 and 2022 accident years. •$11 million of net adverse development on professional lines business primarily due to reserve strengthening within the European proportional book of business related to several accidents years and reserve strengthening attributable to one cedant within the U.S. proportional book of business related to 2019 and older accident years. •$7 million of net adverse development on liability business primarily due to reserve strengthening within the U.S. proportional book of business related to 2018 and older accident years, increases in loss estimates attributable to several cedants within the European book of business related to the 2016 though 2018 accident years and increases in loss estimates attributable to several claims within the Multiline book of business related to older accident years. •$5 million of net adverse development on motor business primarily due to reserve strengthening related to the 2018 through 2022 accident years. Run-off lines •$7 million of net favorable development on catastrophe business primarily due to better than expected loss emergence mainly related to the 2018 and 2022 accident year. 2024 For the six months ended June 30, 2024, net prior year reserve development of $nil was recognized. 2023 For the six months ended June 30, 2023, the Company recognized $7 million of net favorable prior year reserve development, the principal components of which were: •$14 million of net favorable development on accident and health business primarily due to better than expected loss emergence mainly related to the 2019, 2020 and 2022 accident years. •$14 million of net favorable development on agriculture business primarily due to better than expected loss emergence mainly related to the 2022 accident year. •$5 million of net favorable development on marine and aviation business primarily due to better than expected loss emergence mainly related to the 2021 and 2022 accident years. •$40 million of net adverse development on liability business primarily due to reserve strengthening to reflect increased estimates of future loss trend due to inflation, an increase in the loss estimate attributable to a specific large claim within the European book of business related to the 2021 accident year and reserve strengthening within the U.S. proportional book of business related to 2019 and older accident years. •$22 million of net adverse development on motor business primarily due to reserve strengthening to reflect increased estimates of future loss trend due to inflation and reserve strengthening related to the 2018 through 2022 accident years. •$14 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the European proportional book of business related to several accident years and reserve strengthening attributable to one cedant within the U.S. proportional book of business related to 2019 and older accident years. Run-off lines •$39 million of net favorable development on catastrophe business primarily due to better than expected loss emergence mainly related to the 2022 accident year. •$9 million of net favorable development on property business primarily due to better than expected loss emergence attributable to the European book of business mainly related to the 2018 and 2019 accident years.

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