Reserves for Losses and Adjustment Expenses

12 Months Ended

Dec. 31, 2018

Reserves for Losses and Adjustment Expenses

Reserves for Losses and Loss Adjustment Expenses

The following table represents a reconciliation of beginning and ending consolidated loss and LAE reserves for the twelve months ended December 31, 2018, 2017 and 2016:



	As at December 31,
	2018			2017			2016
	($ in millions)
Provision for losses and LAE at the start of the year	$	6,749.5		$	5,319.9		$	4,938.2
Less reinsurance recoverable	(1,515.2		)	(560.7		)	(354.8		)
Net loss and LAE at the start of the year	5,234.3			4,759.2			4,583.4

Net loss and LAE expenses (disposed)	—			(125.5		)	(80.1		)
Movement in provision for losses and LAE for claims incurred:
Current year	1,684.1			2,100.1			1,705.4
Prior years	(111.1		)	(105.4		)	(129.3		)
Total incurred	1,573.0			1,994.7			1,576.1
Losses and LAE payments for claims incurred:
Current year	(285.7		)	(397.5		)	(241.0		)
Prior years	(1,441.0		)	(1,157.6		)	(981.8		)
Total paid	(1,726.7		)	(1,555.1		)	(1,222.8		)

Foreign exchange losses/(gains)	(84.0		)	161.0			(97.4		)

Net losses and LAE reserves at the end of the year	4,996.6			5,234.3			4,759.2
Plus reinsurance recoverable on unpaid losses at the end of the year	2,077.6			1,515.2			560.7
Provision for losses and LAE at the end of the year	$	7,074.2		$	6,749.5		$	5,319.9

For the twelve months ended December 31, 2018, there was a reduction of $111.1 million in the Company’s estimate of the ultimate claims to be paid in respect of prior accident years compared to $105.4 million for the twelve months ended December 31, 2017. In the twelve months ended December 31, 2017, the Company ceded $125.5 million of reserves as part of a loss portfolio transfer agreement. In the twelve months ended December 31, 2016, the Company ceded $85.8 million in relation to the purchase of an adverse development cover partially offset by $5.7 million of reserves assumed as part of the acquisition of AgriLogic.

For additional information on reserve releases, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Reserves for Losses and Loss Adjustment Expenses” above.

The following tables show an analysis of incurred claims and allocated loss adjustment expenses, net of reinsurance and cumulative paid claims and allocated claim adjustment expenses, net of reinsurance as at December 31, 2018, 2017, 2016, 2015 2014, 2013 and 2012. The loss development triangles are derived from all business written by the Company as although a limited number of contracts are written which have durations of greater than one year the contracts do not meet the definition of a long duration contract.



	Property Insurance Lines
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	168.5	166.8	165.6	164.4	158.8	152.9	151.9		—	6,141
2013		128.7	116.1	115.8	111.5	112.5	110.6		0.6	4,992
2014			164.3	156.3	133.5	134.2	133.4		1.7	8,740
2015				237.4	203.0	197.7	200.0		9.1	10,319
2016					236.7	247.7	242.6		12.4	9,431
2017						293.9	257.0		23.6	7,722
2018							201.1		31.4	5,694
						Total	$	1,296.6



	Property Insurance Lines
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	41.1	128.5	137.9	151.7	155.7	153.1	152.5
2013		38.3	75.0	88.2	100.1	104.6	107.4
2014			40.2	86.1	113.5	123.1	127.1
2015				56.9	141.0	168.4	177.5
2016					66.5	167.8	200.2
2017						96.0	212.3
2018							69.3
						Total	$	1,046.3

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					$	250.3
			All outstanding liabilities before 2012, net of reinsurance				3.1
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	253.4



	Casualty Insurance Lines
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	77.1	61.8	69.0	60.1	68.0	65.7	67.6		7.9	2,869
2013		131.2	115.0	113.6	119.0	102.0	103.2		11.6	3,161
2014			142.9	125.4	137.2	127.2	134.3		23.4	3,628
2015				201.5	221.5	184.1	201.6		33.6	4,463
2016					215.3	186.3	181.6		81.8	4,388
2017						179.6	173.1		82.7	4,815
2018							121.8		103.7	3,918
						Total	$	983.2



	Casualty Insurance Lines
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	1.3	6.5	13.9	29.3	40.2	48.5	49.3
2013		2.2	25.5	39.0	52.3	67.4	79.7
2014			2.6	13.1	32.2	58.8	71.9
2015				3.1	16.8	56.0	91.8
2016					4.1	22.5	39.6
2017						3.5	24.7
2018							4.0

						Total	$	361.0

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					$	622.2
			All outstanding liabilities before 2012, net of reinsurance				43.3
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	665.5



	Marine, Aviation and Energy Insurance Lines
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	268.5	306.0	325.5	346.1	331.6	327.8	316.1		2.7	3,807
2013		320.6	333.4	342.0	325.5	332.6	346.2		6.0	4,171
2014			309.6	313.8	298.7	310.3	305.8		9.5	4,001
2015				297.1	299.8	281.9	285.8		17.6	4,001
2016					260.9	230.5	229.6		32.7	4,373
2017						210.6	200.9		44.5	5,939
2018							171.4		85.3	3,212
						Total	$	1,855.8



	Marine, Aviation and Energy Insurance Lines
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	51.5	132.2	174.6	210.9	239.6	250.5	273.3
2013		41.5	131.4	204.7	235.0	264.4	284.1
2014			53.4	116.6	189.1	209.7	232.4
2015				44.9	123.3	174.0	193.7
2016					30.9	82.6	142.8
2017						40.2	108.1
2018							28.7
						Total	$	1,263.1

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					$	592.7
			All outstanding liabilities before 2012, net of reinsurance				29.1
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	621.8



	Financial and Professional Insurance Lines
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	87.5	89.0	92.6	95.8	92.8	88.4	99.8		6.6	573
2013		105.2	99.8	104.0	100.7	99.7	90.8		12.0	571
2014			134.5	130.3	129.0	119.3	130.5		17.3	795
2015				173.5	174.9	184.9	189.0		60.3	1,080
2016					190.3	211.1	215.6		83.4	1,303
2017						205.9	181.9		102.1	1,760
2018							156.4		124.7	4,221
						Total	$	1,064.0



	Financial and Professional Insurance Lines
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	22.8	39.4	50.3	58.7	64.5	69.7	79.0
2013		8.0	21.0	31.1	65.3	63.6	72.0
2014			2.9	30.6	53.4	72.0	86.3
2015				13.7	43.4	69.9	89.2
2016					15.2	71.2	94.9
2017						27.1	57.6
2018							23.8
						Total	$	502.8

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					$	561.2
			All outstanding liabilities before 2012, net of reinsurance				20.0
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	581.2



	Property Catastrophe and Other Property Reinsurance
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	280.1	303.4	286.6	279.1	282.5	279.5	271.9		11.2	669
2013		216.8	198.8	188.9	177.7	176.2	172.9		2.1	806
2014			190.2	177.5	161.7	150.4	150.7		4.7	863
2015				214.9	187.8	177.6	156.9		4.6	991
2016					269.9	269.8	268.2		23.2	1,211
2017						557.8	534.8		47.5	1,846
2018							348.5		182.8	1,182
						Total	$	1,903.9



	Property Catastrophe and Other Property Reinsurance
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	35.6	135.8	188.9	209.1	216.7	227.8	232.3
2013		34.4	98.0	146.0	158.0	162.6	164.2
2014			37.6	101.0	127.6	137.7	141.6
2015				35.9	95.2	126.6	139.4
2016					56.3	163.3	204.3
2017						123.4	374.7
2018							124.8
						Total	$	1,381.3

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					522.6
			All outstanding liabilities before 2012, net of reinsurance				20.0
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	542.6



	Casualty Reinsurance
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	232.9	231.1	242.2	233.5	230.6	231.7	240.7		42.9	1,735
2013		213.8	229.0	224.3	221.7	204.7	199.9		44.8	1,605
2014			204.4	207.3	215.8	209.1	202.5		56.1	1,636
2015				193.8	200.9	210.4	212.8		74.7	1,664
2016					232.6	245.2	244.9		115.0	1,416
2017						244.7	242.7		158.7	1,085
2018							229.1		195.4	481
						Total	$	1,572.6



	Casualty Reinsurance
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	2.2	17.5	41.7	65.1	95.7	116.9	133.6
2013		3.4	15.8	42.5	64.7	92.4	114.3
2014			2.5	13.8	37.8	60.2	86.3
2015				3.5	18.0	38.4	65.5
2016					9.1	33.5	63.9
2017						8.9	30.8
2018							7.2
						Total	$	501.6

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					1,071.0
			All outstanding liabilities before 2012, net of reinsurance				485.1
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	1,556.1



	Specialty Reinsurance
	Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance								As at December 31, 2018
									Total of IBNR Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	$ (in millions)
2012	176.4	199.7	188.9	174.6	172.9	173.5	169.9		8.4	628
2013		144.6	139.8	131.9	120.2	119.5	115.6		5.5	568
2014			152.4	140.7	132.6	123.6	126.4		10.9	610
2015				166.9	170.9	165.4	159.8		18.8	761
2016					239.8	240.7	238.7		37.9	902
2017						380.5	393.0		81.1	1,191
2018							398.6		327.7	914
						Total	$	1,602.0



	Specialty Reinsurance
	Cumulative Paid Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance

	For the Years Ended December 31,
	Unaudited Prior Years
Accident Year	2012	2013	2014	2015	2016	2017	2018
	($ in millions)
2012	25.1	93.9	129.0	139.1	144.5	149.8	151.1
2013		25.1	71.3	87.3	94.6	101.6	101.6
2014			16.6	56.7	81.6	89.6	100.1
2015				17.7	56.8	104.6	122.6
2016					58.9	151.4	166.2
2017						95.0	250.2
2018							27.9
						Total	$	919.7

		All outstanding liabilities for 2012 and subsequent years, net of reinsurance					682.3
			All outstanding liabilities before 2012, net of reinsurance				41.5
		Liabilities for claims and claim adjustment expenses, net of reinsurance					$	723.8

Reconciliation of Incurred and Paid Claims Development to total Provision for Losses and LAE



	Twelve Months Ended December 31, 2018
	($ in millions)
Net outstanding liabilities:
Insurance lines
- Property insurance lines	253.4
- Casualty insurance lines	665.5
- Marine, aviation and energy insurance lines	621.8
- Financial and professional insurance lines	581.2
Total insurance lines	2,121.9

Reinsurance lines
- Property catastrophe and other property reinsurance	542.6
- Casualty reinsurance	1,556.1
- Specialty reinsurance	723.8
Total reinsurance lines	2,822.5

Net loss and LAE	4,944.4

Reinsurance recoverable on unpaid losses:
Insurance lines	1,611.4
Reinsurance lines	466.2
Total reinsurance recoverable on unpaid losses	2,077.6

Insurance lines other than short-duration	—
Unallocated claims incurred	43.7
Other	8.5
	52.2

Provision for losses and LAE at the end of the year	7,074.2

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance



Years	1		2		3		4		5		6		7

Insurance	16.2	%	25.7	%	16.0	%	11.4	%	7.6	%	5.0	%	5.1	%

Reinsurance	13.9	%	27.3	%	16.2	%	8.9	%	7.6	%	5.2	%	3.3	%