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Reserves for Losses and Adjustment Expenses

12 Months Ended

Dec. 31, 2021

Insurance [Abstract]

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, 2021, 2020 and 2019:

 

						As at December 31,
						2021						2020						2019
						($ in millions)
Provision for losses and LAE at the start of the year						$	7,165.3					$	6,951.8					$	7,074.2
Less reinsurance recoverable						(3,195.2)						(2,319.8)						(2,077.6)
Net loss and LAE at the start of the year						3,970.1						4,632.0						4,996.6
Net loss and LAE expenses (disposed) (1)						—						(818.5)						—
Movement in net provision for losses and LAE for claims incurred:
Current year						1,648.2						1,841.7						1,620.2
Prior years						45.1						(0.9)						59.5
Total incurred						1,693.3						1,840.8						1,679.7
Losses and LAE payments for claims incurred:
Current year						(729.1)						(404.9)						(428.5)
Prior years						(580.7)						(1,359.7)						(1,694.1)
Total paid						(1,309.8)						(1,764.6)						(2,122.6)
Foreign exchange (gains)/losses						(39.9)						80.4						78.3
Net losses and LAE reserves at the end of the year						4,313.7						3,970.1						4,632.0
Plus reinsurance recoverable on unpaid losses at the end of the year						3,298.1						3,195.2						2,319.8
Provision for losses and LAE at the end of the year						$	7,611.8					$	7,165.3					$	6,951.8

 ______________ 

(1) Net loss and LAE expenses disposed in 2020 includes the ADC agreement providing $770.0 million of cover and the loss portfolio transfer transactions for our surety insurance book of $42.0 million and our U.S. accident and health book of $6.5 million.

For the twelve months ended December 31, 2021, there was an increase of $45.1 million in the Company’s estimate of the ultimate claims to be paid in respect of prior accident years compared to a decrease of $0.9 million for the twelve months ended December 31, 2020.

Overall, prior year reserve strengthening totaled $45.1 million in 2021, compared with net favorable reserve development of $0.9 million in 2020. Prior year reserve strengthening excludes the full economic benefit of the recoveries from the ADC of $58.3 million which is currently within reinsurance recoverables on unpaid losses.

Reserve releases in the reinsurance segment in 2021 were $134.4 million compared to $36.1 million in 2020 and came primarily from casualty reinsurance and specialty reinsurance. Net unfavorable reserve development in the insurance segment in 2021 was $179.5 million compared to net unfavorable reserve development of $35.2 million in 2020 and came primarily from casualty insurance lines and first party and specialty lines.

The following table provides a reconciliation of reinsurance recoverables on unpaid losses as at December 31, 2021, 2020 and 2019, including reserves associated with the adverse development cover reinsurance agreements.

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, 2021, 2020, 2019, 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. All amounts included in the following tables related to transactions denominated in a foreign currency have been translated into U.S. Dollars using the exchange rates in effect at December 31, 2021.

The Company has chosen to disaggregate the business in its Insurance segment, for the purposes of these loss development triangles as: Property, Casualty, Marine, Aviation and Energy, and Financial and Professional insurance lines. The Company considers that this presentation of its Insurance lines loss development triangles more precisely reflects meaningful trending information. Certain accident years have negative IBNR due to the allocation of the adverse development cover, which has been allocated in line with with the agreement and premiums paid.

						Property Insurance Lines
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		Total of IBNR Plus Expected Development on Reported Claims						Cumulative Number of Reported Claims
						For the Years Ended December 31,
Accident  Year						Unaudited Prior Years
						2012						2013						2014						2015						2016						2017						2018						2019						2020						2021
						$ (in millions)
2012						170.6						168.6						167.3						166.2						160.6						154.8						153.7						153.8						154.4						155.6						—						6,083
2013												130.8						117.9						117.5						113.3						114.3						112.3						112.6						112.8						110.7						0.3						5,764
2014																		166.1						157.9						134.7						135.3						134.6						133.0						132.4						133.4						—						9,973
2015																								241.8						207.4						201.8						204.2						204.6						201.5						202.2						2.0						11,598
2016																														239.9						250.7						245.5						246.9						248.4						249.2						1.6						10,785
2017																																				297.5						260.3						253.5						254.9						254.1						10.3						9,693
2018																																										205.5						208.2						191.9						190.4						0.4						8,171
2019																																																128.5						132.1						122.6						—						6,812
2020																																																						206.7						211.2						36.2						7,295
2021																																																												$	210.9					88.8						4978
																																																Total												$	1,840.3

						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						2019						2020						2021
						($ in millions)
2012						41.5						129.6						139.2						153.4						157.6						155.1						154.3						154.3						154.3						155.6
2013												39.2						76.4						89.7						101.7						106.4						109.1						110.9						111.2						110.0
2014																		40.5						86.9						114.5						124.2						128.3						129.8						131.0						132.3
2015																								57.5						144.1						172.1						181.3						198.0						196.4						197.8
2016																														67.3						169.7						202.5						224.8						233.8						239.0
2017																																				97.0						189.9						223.2						244.1						248.4
2018																																										62.6						162.9						185.0						181.8
2019																																																49.6						92.6						103.4
2020																																																						61.9						125.5
2021																																																												59.2
																																																Total												$	1,553.0
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																$	287.3
																		All outstanding liabilities before 2012, net of reinsurance																																										2.0
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	289.3

						Casualty Insurance Lines																																																												As at December 31, 2021
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance
																																																																		Total of IBNR Plus Expected Development on Reported Claims						Cumulative Number of Reported Claims
						For the Years Ended December 31,
Accident  Year						Unaudited Prior Years
						2012						2013						2014						2015						2016						2017						2018						2019						2020						2021
						$ (in millions)
2012						78.6						63.4						70.6						61.7						69.6						67.2						69.2						71.1						71.5						69.3						3.4						3,130
2013												134.0						117.4						115.8						121.3						104.3						105.4						105.7						104.3						100.9						7.2						3,367
2014																		146.2						128.4						140.3						130.5						137.7						141.8						138.8						130.4						5.7						3,865
2015																								205.1						225.1						187.6						205.5						238.4						236.7						227.7						13.5						4,736
2016																														218.9						190.0						185.3						192.0						203.1						233.8						54.1						4,753
2017																																				182.9						176.3						180.4						199.3						201.6						18.9						5,416
2018																																										124.0						126.8						137.9						135.5						22.7						5,419
2019																																																126.5						148.8						127.9						4.7						5,104
2020																																																						134.9						133.9						94.3						3,570
2021																																																												176.5						150.5						2,707
																																																Total												1,537.5

						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						2019						2020						2021
						($ in millions)
2012						1.3						6.7						14.3						30.0						41.3						49.7						50.6						55.2						59.9						65.0
2013												2.3						26.0						39.8						53.4						69.0						81.5						85.8						87.8						88.0
2014																		2.7						13.5						33.1						60.4						74.0						98.4						111.4						110.1
2015																								3.2						17.2						57.0						93.5						139.7						169.2						181.4
2016																														4.2						23.1						40.7						83.5						111.0						134.8
2017																																				3.6						23.2						53.4						98.4						116.8
2018																																										3.2						28.2						44.1						69.7
2019																																																6.4						18.6						70.4
2020																																																						—						3.2
2021																																																												9.5
																																																Total												$	848.9
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																$	688.6
												All outstanding liabilities before 2012, net of reinsurance																																																37.0
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	725.6

						Marine, Aviation and Energy Insurance Lines
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		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						2019						2020						2021
						$ (in millions)
2012						268.8						306.2						325.8						346.4						332.1						328.2						316.5						311.2						306.1						308.8						(6.1)						3,823
2013												321.0						333.8						342.5						325.9						333.0						346.6						345.2						340.2						343.3						2.8						4,178
2014																		309.8						314.0						298.9						310.5						306.0						313.0						302.2						312.5						(5.9)						4,043
2015																								297.1						300.2						282.6						286.8						310.4						313.0						321.4						(4.6)						4,074
2016																														260.8						230.8						229.4						229.6						219.4						221.7						0.2						4,429
2017																																				210.7						201.1						207.4						214.9						209.8						37.9						6,041
2018																																										171.4						208.5						209.4						219.9						(2.4)						5,178
2019																																																146.5						154.1						146.0						3.0						3,575
2020																																																						111.0						111.8						12.0						4,128
2021																																																												94.0						44.7						2,108
																																																Total												2,289.2

						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						2019						2020						2021
						($ in millions)
2012						51.5						132.4						174.9						211.2						240.0						250.9						273.8						274.7						276.9						284.8
2013												41.5						131.7						205.0						235.4						264.8						284.5						300.6						310.8						311.0
2014																		53.6						116.9						189.3						210.0						232.7						250.9						263.1						275.6
2015																								44.9						123.4						174.6						194.5						222.5						257.9						280.6
2016																														30.9						82.7						142.8						164.3						191.2						199.0
2017																																				40.3						97.8						140.6						168.8						156.9
2018																																										26.9						105.1						133.4						155.7
2019																																																33.6						72.8						118.1
2020																																																						28.5						66.7
2021																																																												23.5
																																																Total												$	1,871.9
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																$	417.3
																		All outstanding liabilities before 2012, net of reinsurance																																										10.6
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	427.9

						Financial and Professional Insurance Lines
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		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						2019						2020						2021
						$ (in millions)
2012						88.5						89.9						93.6						97.0						94.0						89.6						101.7						96.5						103.4						104.5						(4.4)						579
2013												106.1						100.6						105.0						101.7						100.8						91.9						90.9						97.6						102.8						2.2						586
2014																		135.7						131.6						130.2						120.6						131.9						120.9						121.7						123.7						(2.7)						800
2015																								175.0						176.3						186.4						190.6						191.9						186.7						185.9						(0.4)						1,080
2016																														191.9						212.6						217.4						203.1						186.3						185.7						13.5						1,255
2017																																				207.7						184.1						188.9						189.4						188.6						12.8						1,739
2018																																										158.5						174.6						156.9						152.7						6.0						4,617
2019																																																250.5						263.8						236.0						52.8						23,894
2020																																																						351.0						352.0						181.7						105,317
2021																																																												289.6						221.5						31,311
																																																Total												$	1,921.5

						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						2019						2020						2021
						($ in millions)
2012						22.8						39.6						50.8						59.4						65.4						70.6						80.3						85.3						91.3						92.8
2013												8.1						21.2						31.3						65.6						64.1						72.8						75.0						78.3						81.8
2014																		3.0						30.9						53.8						72.5						80.0						85.9						92.6						104.2
2015																								13.8						43.6						70.3						89.7						110.4						139.6						146.2
2016																														15.2						71.4						102.5						130.6						126.6						136.0
2017																																				27.2						51.4						83.6						117.5						137.2
2018																																										21.0						75.7						101.6						117.1
2019																																																27.4						87.3						138.4
2020																																																						48.0						121.9
2021																																																												43.7
																																																Total												$	1,119.3
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																$	802.2
																		All outstanding liabilities before 2012, net of reinsurance																																										6.5
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	808.7

						Property Catastrophe and Other Property Reinsurance
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		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						2019						2020						2021
						$ (in millions)
2012						280.2						303.1						286.2						278.8						282.2						279.2						271.7						261.6						264.9						248.6						(3.1)						679
2013												217.4						199.9						189.7						178.5						177.1						173.8						171.0						168.2						164.7						0.6						832
2014																		189.9						176.8						160.9						149.5						149.8						144.9						144.9						143.9						0.8						900
2015																								214.6						187.3						177.2						156.6						171.8						171.9						179.8						11.7						1,051
2016																														272.6						272.7						271.0						249.2						244.9						230.4						(15.2)						1,308
2017																																				557.7						534.5						516.2						505.0						481.2						(3.8)						1,956
2018																																										343.1						394.2						389.5						403.5						22.2						1,808
2019																																																262.8						272.3						270.6						3.6						1,395
2020																																																						322.9						366.9						20.1						1,333
2021																																																												461.5						198.6						1,005
																																																Total												$	2,951.1

						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						2019						2020						2021
						($ in millions)
2012						35.6						135.7						188.8						208.9						216.4						227.6						232.1						242.2						247.9						248.6
2013												34.5						98.8						146.9						159.0						163.7						165.2						166.8						161.2						161.2
2014																		37.4						100.7						127.1						137.0						140.9						139.6						141.3						141.5
2015																								35.8						95.0						127.1						139.2						156.2						158.6						162.2
2016																														57.2						164.7						206.0						217.1						230.4						236.7
2017																																				123.2						357.4						416.6						440.8						437.6
2018																																										122.8						311.6						325.7						345.4
2019																																																28.2						153.0						205.6
2020																																																						42.4						169.2
2021																																																												75.6
																																																Total												$	2,183.6
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																767.5
																		All outstanding liabilities before 2012, net of reinsurance																																										17.4
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	784.9

						Casualty Reinsurance
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		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						2019						2020						2021
						$ (in millions)
2012						235.1						233.3						244.6						236.0						232.8						233.7						242.6						245.1						240.0						196.2						(27.1)						1,813
2013												215.6						230.8						226.3						223.6						206.6						201.7						204.4						201.6						165.8						(6.8)						1,691
2014																		206.2						209.0						217.6						211.1						204.5						207.1						202.9						160.5						(14.8)						1,805
2015																								195.4						202.2						211.7						214.2						212.0						208.0						160.6						(13.6)						1,964
2016																														234.7						247.3						247.0						257.2						264.7						213.5						(2.1)						2,056
2017																																				246.6						244.0						254.9						254.1						194.2						3.4						2,005
2018																																										230.1						259.8						267.0						190.6						24.7						1,766
2019																																																236.2						256.6						179.2						52.3						1,300
2020																																																						256.4						237.6						177.8						753
2021																																																												209.0						177.0						355
																																																Total												$	1,907.2

						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						2019						2020						2021
						($ in millions)
2012						2.2						17.8						42.1						65.5						96.6						117.8						134.7						144.4						162.2						165.4
2013												3.4						15.9						42.8						65.1						93.1						115.0						127.8						139.9						146.3
2014																		2.5						13.8						37.8						60.3						86.7						107.7						125.7						135.7
2015																								3.5						18.0						38.5						65.7						89.7						109.0						123.3
2016																														9.3						33.7						64.5						96.7						127.0						148.0
2017																																				8.9						30.7						59.2						97.9						117.3
2018																																										7.2						33.7						73.7						104.9
2019																																																9.2						36.5						61.4
2020																																																						9.2						28.0
2021																																																												7.9
																																																Total												$	1,038.2
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																869.0
																		All outstanding liabilities before 2012, net of reinsurance																																										106.3
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	975.3

						Specialty Reinsurance
						Incurred Claims, IBNR and Loss Adjustment Expenses, Net of Reinsurance																																																												As at December 31, 2021
																																																																		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						2019						2020						2021
						$ (in millions)
2012						176.2						199.5						188.8						173.3						171.7						172.4						169.1						166.6						165.6						156.3						(3.9)						641
2013												144.4						139.6						131.3						119.4						118.6						114.8						114.4						111.0						104.8						(0.5)						577
2014																		152.4						140.1						132.1						122.9						125.8						124.3						120.1						114.9						0.6						619
2015																								165.9						170.0						164.5						159.0						157.3						152.8						149.0						4.7						777
2016																														238.8						239.9						237.7						230.0						225.0						214.7						(5.4)						937
2017																																				379.7						392.4						376.0						364.4						343.2						(6.1)						1,328
2018																																										397.4						396.4						394.3						391.1						13.0						1,399
2019																																																476.1						498.9						495.4						49.2						1,519
2020																																																						415.6						382.4						66.7						1,400
2021																																																												155.8						106.1						1,020
																																																Total												$	2,507.6

						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						2019						2020						2021
						($ in millions)
2012						24.6						93.0						128.1						138.2						143.5						148.8						150.1						152.9						153.4						156.1
2013												25.0						70.9						86.9						94.0						101.0						101.0						101.9						101.7						100.7
2014																		16.6						56.5						81.3						89.3						99.7						102.6						104.2						106.2
2015																								17.7						56.4						104.1						122.0						130.9						134.0						134.0
2016																														58.7						150.9						165.5						183.6						193.8						203.8
2017																																				94.6						238.8						271.0						306.3						317.1
2018																																										27.2						280.8						314.6						331.1
2019																																																274.3						382.7						402.1
2020																																																						213.1						270.4
2021																																																												28.4
																																																Total												$	2,049.9
												All outstanding liabilities for 2012 and subsequent years, net of reinsurance																																																457.7
																		All outstanding liabilities before 2012, net of reinsurance																																										14.6
												Liabilities for claims and claim adjustment expenses, net of reinsurance																																																$	472.3

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

			Twelve Months Ended December 31, 2021						Twelve Months Ended December 31, 2020
			($ in millions)
Net outstanding liabilities:
Insurance lines
- Property insurance lines			289.3						226.8
- Casualty insurance lines			725.6						618.7
- Marine, aviation and energy insurance lines			427.9						431.4
- Financial and professional insurance lines			808.7						738.5
Total insurance lines			2,251.5						2,015.4
Reinsurance lines
- Property catastrophe and other property reinsurance			784.9						631.0
- Casualty reinsurance			975.3						1,084.2
- Specialty reinsurance			472.3						535.4
Total reinsurance lines			2,232.5						2,250.6
Net loss and LAE			4,484.0						4,266.0
Reinsurance recoverable on unpaid losses:
Insurance lines			2,117.4						2,140.3
Reinsurance lines			1,180.7						1,054.9
Total reinsurance recoverable on unpaid losses			3,298.1						3,195.2
Deferred gain on retroactive contracts			58.3						—
Unallocated claims incurred			56.6						50.3
Other reinsurance balances recoverable (1)			(286.4)						(346.7)
Carbon syndicate reserves			1.0						—
Other			0.2						0.5
			(170.3)						(295.9)
Provision for losses and LAE at the end of the year			7,611.8						7,165.3

____________________

(1)     Other reinsurance balances recoverable primarily include amounts that have been billed but not yet received.

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

Years						1						2						3						4						5						6						7						8						9						10
Insurance						16.1		%				25.7		%				17.2		%				11.9		%				7.4		%				6.7		%				4.5		%				2.5		%				1.3		%				2.5		%
Reinsurance						18.1		%				30.9		%				15.3		%				9.7		%				8.3		%				5.6		%				4.0		%				2.7		%				2.6		%				1.1		%

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