Reserve for Losses and Loss Expenses (Tables)

12 Months Ended

Dec. 31, 2011

Roll Forward of Reserves for Losses and Loss Expenses

($ in thousands)		2011	2010	2009
Gross reserves for losses and loss expenses, at beginning of year	$	2,830,058	2,745,799	2,640,973
Less: reinsurance recoverable on unpaid loss and loss expenses, at beginning of year		313,739	271,610	224,192
Net reserves for losses and loss expenses, at beginning of year		2,516,319	2,474,189	2,416,781
Incurred losses and loss expenses for claims occurring in the:
Current year		1,113,733	1,025,707	1,001,333
Prior years		(38,746)	(43,589)	(29,428)
Total incurred losses and loss expenses		1,074,987	982,118	971,905
Paid losses and loss expenses for claims occurring in the:
Current year		440,786	378,650	330,006
Prior years		569,944	561,338	584,491
Total paid losses and loss expenses		1,010,730	939,988	914,497
Acquisition of MUSIC loss and loss expense reserves		14,858	-	-
Net reserves for losses and loss expenses, at end of year		2,595,434	2,516,319	2,474,189
Add: Reinsurance recoverable on unpaid loss and loss expenses, at end of year¹		549,490	313,739	271,610
Gross reserves for losses and loss expenses at end of year	$	3,144,924	2,830,058	2,745,799

¹Includes $44.0 million related to the acquisition of MUSIC.

Exposure to Various Environmental Claims

		2011
($ in millions)		Gross	Net
Asbestos	$	8.4	6.6
Landfill sites		16.4	11.5
Other¹		21.7	20.3
Total	$	46.5	38.4

¹ Consists of leaking underground storage tanks and other latent environmental exposures.

Roll Forward of Gross and Net Environmental Incurred Losses and Loss Expenses and Related Reserves


		2011		2010		2009
($ in thousands)		Gross	Net	Gross	Net	Gross	Net
Asbestos
Reserves for losses and loss expenses at beginning of year	$	9,979	8,167	11,056	9,244	14,269	12,969
Incurred losses and loss expenses		2,014	2,000	(338)	(338)	(2,418)	(2,930)
Less: losses and loss expenses paid		(3,581)	(3,581)	(739)	(739)	(795)	(795)
Reserves for losses and loss expenses at the end of year	$	8,412	6,586	9,979	8,167	11,056	9,244

Non-Asbestos
Reserves for losses and loss expenses at beginning of year	$	37,312	31,282	39,418	32,358	37,246	31,124
Incurred losses and loss expenses		6,243	6,250	1,999	2,776	8,115	6,405
Less: losses and loss expenses paid		(5,492)	(5,738)	(4,105)	(3,852)	(5,943)	(5,171)
Reserves for losses and loss expenses at the end of year	$	38,063	31,794	37,312	31,282	39,418	32,358

Total Environmental Claims
Reserves for losses and loss expenses at beginning of year	$	47,291	39,449	50,474	41,602	51,515	44,093
Incurred losses and loss expenses		8,257	8,250	1,661	2,438	5,697	3,475
Less: losses and loss expenses paid		(9,073)	(9,319)	(4,844)	(4,591)	(6,738)	(5,966)
Reserves for losses and loss expenses at the end of year	$	46,475	38,380	47,291	39,449	50,474	41,602

- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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