Reserves for Losses and Loss Adjustment Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Reserves for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of reserves for losses and loss adjustment expenses (“LAE”):


	For the Three Months Ended March 31,
(in millions)	2023		2022
Net reserves - beginning of the year	$	2,213.1	$	3,123.2


Add:
Losses and LAE incurred during current calendar year, net of reinsurance:
Current accident year	236.0		280.2
Prior accident years	48.6		3.4
Losses and LAE incurred during calendar year, net of reinsurance	284.6		283.6
Deduct:
Losses and LAE payments made during current calendar year, net of reinsurance:
Current accident year	36.8		19.0
Prior accident years	149.1		266.1
Losses and LAE payments made during current calendar year, net of reinsurance:	185.9		285.1
Add/(Deduct):
Divestitures (1)	24.4		(31.0)





Retroactive reinsurance (2)	21.7		—
Change in participation interest (3)	—		48.0
Total net reserve adjustments	46.1		17.0
Foreign exchange adjustments	2.1		(0.4)
Net reserves - end of period	2,360.0		3,138.3
Add:
Reinsurance recoverables on unpaid losses and LAE, end of period	2,824.1		2,509.8
Gross reserves - end of period	$	5,184.1	$	5,648.1

(1)For the three months ended March 31, 2023, the adjustment relates to the quarterly activity of Syndicate 1200 and on reinsurance contracts with AUA subsidiaries. Refer to the sale of AUA in Note 1, “Business and Significant Accounting Policies” for additional information.

For the three months ended March 31, 2022, refer to the sale of Argo Seguros in Note 1, “Business and Significant Accounting Policies” for additional information.

(2)In connection with the sale of AUA, the Company entered into two retroactive reinsurance agreements with AUA subsidiaries.

(3)Amount represents the change in reserves due to changing our participation in Syndicates 1200 and 1910. For the three months ended March 31, 2023, the balance has been reduced to zero as a result of the sale of AUA.

Impact from (Favorable) Unfavorable Development of Prior Accident Years’ Loss and LAE Reserves on Each Reporting Segment

The impact from the (favorable) unfavorable development of prior accident years’ loss and LAE reserves on each reporting segment is presented below:


	For the Three Months Ended March 31,
(in millions)	2023		2022
U.S. Operations	$	39.7	$	5.0
International Operations	7.8		(3.0)
Run-off Lines	1.1		1.4
Total (favorable) unfavorable prior-year development	$	48.6	$	3.4