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RESERVE FOR LOSSES AND LOSS EXPENSES | 9 Months Ended
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Sep. 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:
|  | Nine months ended September 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 | 2,334,543 |  |  | 2,253,958 |  |  |
| Prior years | (8,011) |  |  | (13,118) |  |  |
|  | 2,326,532 |  |  | 2,240,840 |  |  |
| Net paid losses and loss expenses related to: |  |  |  |  |
| Current year | (308,581) |  |  | (272,260) |  |  |
| Prior years | (1,769,278) |  |  | (1,730,640) |  |  |
|  | (2,077,859) |  |  | (2,002,900) |  |  |
| Foreign exchange and other | 124,792 |  |  | (51,902) |  |  |
| Net reserve for unpaid losses and loss expenses, end of period | 10,484,400 |  |  | 9,523,729 |  |  |
| Reinsurance recoverable on unpaid losses and loss expenses, end of period | 6,810,929 |  |  | 6,031,527 |  |  |
| Gross reserve for losses and loss expenses, end of period | $ | 17,295,329 |  |  | $ | 15,555,256 |  |  |
On September 22, 2023, the Company entered into a retrocession reinsurance agreement with a third-party reinsurer which was deemed to have met the established criteria for retroactive reinsurance accounting. At September 30, 2023, foreign exchange and other included an increase in reinsurance recoverable on unpaid losses of $76 million related to this transaction (refer to Note 4(f) 'Equity Method Investments' and Note 5 'Fair Value Measurements'). Estimates for Significant Catastrophe Events At September 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 Helene, Hurricane Ian, Winter Storm Elliot, June European Convective Storms, the Russia-Ukraine war and the COVID-19 pandemic. As a result, actual losses for these events may ultimately differ materially from current estimates. During the nine months ended September 30, 2024, the Company recognized catastrophe and weather-related losses, net of reinsurance, of $145 million (2023: $112 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 September 30, |  | Nine months ended September 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |
| Insurance | $ | 4,009 |  |  | $ | 1,609 |  |  | $ | 4,008 |  |  | $ | 5,433 |  |
| Reinsurance | 4,003 |  |  | 1,153 |  |  | 4,003 |  |  | 7,685 |  |
| Total | $ | 8,012 |  |  | $ | 2,762 |  |  | $ | 8,011 |  |  | $ | 13,118 |  |
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 September 30, |  | Nine months ended September 30, |  |  |  |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Property | $ | 2,043 |  |  | $ | (10,068) |  |  | $ | 10,053 |  |  | $ | (4,376) |  |  |  |  |  |  |
| Accident and health | 1,966 |  |  | (5,213) |  |  | 1,966 |  |  | (5,765) |  |  |  |  |  |  |
| Marine and aviation | — |  |  | 19,472 |  |  | (8,011) |  |  | 35,374 |  |  |  |  |  |  |
| Cyber | — |  |  | 10,869 |  |  | — |  |  | 19,997 |  |  |  |  |  |  |
| Professional lines | — |  |  | (4,383) |  |  | — |  |  | (20,475) |  |  |  |  |  |  |
| Credit and political risk | — |  |  | 3,374 |  |  | — |  |  | 16,323 |  |  |  |  |  |  |
| Liability | — |  |  | (12,442) |  |  | — |  |  | (35,645) |  |  |  |  |  |  |
| Total | $ | 4,009 |  |  | $ | 1,609 |  |  | $ | 4,008 |  |  | $ | 5,433 |  |  |  |  |  |  |
2024 For the three months ended September 30, 2024, net favorable prior year reserve development of $4 million was recognized. 2023 For the three months ended September 30, 2023, the Co mpany recognized $2 million of net favorable prior year reserve development, the principal components of which were: •$19 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 liability and marine cargo books of business mainly related to recent accident years. •$11 million of net favorable prior year reserve development on cyber business primarily due to better than expected loss emergence mainly related to the 2021 and 2022 accident years, p artially offset by increases in loss estimates attributable to specific large claims related to the 2020 accident year. •$12 million of net adverse prior year reserve development on liability business primarily due to in creases in loss estimates attributable to specific large claims within the U.S. excess casualty general li ability book of business related to the 2018 through 2021 accident years, and U.S. programs books of business mainly related to recent accident years. •$10 million of net adverse prior year reserve development on property business primarily due to in creases in loss estimates attributable to two specific large claims within the E&S property book of business related to the 2016 and 2022 accident years. •$5 million of net adverse prior year reserve development on accident and health business primarily due to reserve strengthening within the international book of business mainly related to the 2021 and 2022 accident years. 2024 For the nine months ended September 30, 2024, net favorable prior year reserve development of $4 million was recognized, the principal components of which were: •$10 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 nine months ended September 30, 2023, the Company recognized $5 million of net favorable prior year reserve development, the principal components of which were: •$35 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 and aviation books of business related to recent accident years. •$20 million of net favorable prior year reserve development on cyber business primarily due to better than expected loss emergence related to most accident years, p artially offset by increases in loss estimates attributable to specific large claims related to the 2020 accident year. •$16 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. •$36 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 2017 through 2019 accident years, and increases in loss estimates attributable to specific large claims within the U.S. excess casualty general liability book of business mainly related to the 2017 through 2021 accident years and U.S. programs book of business mainly related to recent accident years. •$20 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. •$6 million of net adverse prior year reserve development on accident and health business primarily due to reserve strengthening within the international book of business mainly related to the 2021 and 2022 accident years. Reinsurance Segment: Prior year reserve development by line of business was as follows:
|  | Three months ended September 30, |  | Nine months ended September 30, |  |  |  |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |  |  |
|  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  | Favorable (Adverse) |  |  |  |  |  |
| Accident and health | $ | — |  |  | $ | 5,842 |  |  | $ | — |  |  | $ | 20,115 |  |  |  |  |  |  |
| Agriculture | — |  |  | 729 |  |  | — |  |  | 14,741 |  |  |  |  |  |  |
| Marine and aviation | — |  |  | 3,576 |  |  | — |  |  | 8,523 |  |  |  |  |  |  |
| Professional lines | — |  |  | (9,044) |  |  | — |  |  | (22,772) |  |  |  |  |  |  |
| Credit and surety | 4,003 |  |  | 9,625 |  |  | 4,003 |  |  | 8,498 |  |  |  |  |  |  |
| Motor | — |  |  | (1,302) |  |  | — |  |  | (23,248) |  |  |  |  |  |  |
| Liability | — |  |  | (15,222) |  |  | — |  |  | (55,092) |  |  |  |  |  |  |
| Run-off lines |  |  |  |  |  |  |  |  |  |  |  |  |
| Catastrophe | — |  |  | 1,436 |  |  | — |  |  | 39,982 |  |  |  |  |  |  |
| Property | — |  |  | 3,421 |  |  | — |  |  | 12,568 |  |  |  |  |  |  |
| Engineering | — |  |  | 2,092 |  |  | — |  |  | 4,370 |  |  |  |  |  |  |
| Total run-off lines | — |  |  | 6,949 |  |  | — |  |  | 56,920 |  |  |  |  |  |  |
| Total | $ | 4,003 |  |  | $ | 1,153 |  |  | $ | 4,003 |  |  | $ | 7,685 |  |  |  |  |  |  |
2024 For the three months ended September 30, 2024, net favorable prior year reserve development of $4 million was recognized. 2023 For the three months ended September 30, 2023, the Company recognized $1 million of net favorable prior year reserve development, the principal components of which were: •$10 million of net favorable development on credit and surety business primarily due to better than expected loss emergence attributable to the international credit and mortgage books of business mainly related to recent accident years. •$6 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. •$15 million of net adverse development on liability business primarily due to reserve strengthening within the U.S. books of business related to several accident years, partially offset by a decrease in the loss estimate attributable to a specific large claim within the international book of business related to the 2010 accident year. •$9 million of net adverse development on professional lines business primarily due to reserve strengthening within the U.S. proportional book of business mainly related to the 2017 through 2019 accident years, and reserve strengthening attributable to two cedants within the U.S. proportional book of business related to 2019 and older accident years. 2024 For the nine months ended September 30, 2024, net favorable prior year reserve development of $4 million was recognized. 2023 For the nine months ended September 30, 2023, the Company recognized $8 million of net favorable prior year reserve development, the principal components of which were: •$20 million of net favorable prior year development on accident and health business primarily due to better than expected loss emergence mainly related to the 2022 accident year. •$15 million of net favorable prior year development on agriculture business primarily due to better than expected loss emergence mainly related to the 2022 accident year. •$9 million of net favorable prior year development on marine and aviation business primarily due to better than expected loss emergence mainly related to the 2021 and 2022 accident years. •$8 million of net favorable prior year development on credit and surety business primarily due to better than expected loss emergence attributable to international credit and mortgage books of business mainly related to the 2021 and 2022 accident years. •$55 million of net adverse prior year development on liability business primarily due to reserve strengthening within the U.S. proportional, non-proportional and multiline books of business related to several accident years, partially offset by a decrease in the loss estimate attributable to a specific large claim within the international book of business related to the 2010 accident year. •$23 million of net adverse prior year development on motor business primarily due to reserve strengthening to reflect increased estimates of future loss trend due to inflation and reserve strengthening attributable to the proportional book of business mainly related to the 2018 through 2022 accident years. •$23 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the U.S. proportional book of business mainly related to the 2015 through 2018 accident years, and reserve strengthening attributable to two cedants within the U.S. proportional book of business related to 2019 and older accident years. Run-off lines •$40 million of net favorable prior year development on catastrophe business primarily due to better than expected loss emergence. •$13 million of net favorable prior year development on property business primarily due to better than expected loss emergence mainly related to catastrophe events.

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