Unpaid Losses And Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2019

Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract]

Unpaid Losses And Loss Adjustment Expenses

Unpaid Losses and Loss Adjustment Expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for losses and loss adjustment expenses.

	Nine Months Ended September 30,
(dollars in thousands)	2019			2018
Net reserves for losses and loss adjustment expenses, beginning of year	$	9,214,443		$	8,964,945
Foreign currency movements	(51,544		)	(35,754		)
Adjusted net reserves for losses and loss adjustment expenses, beginning of year	9,162,899			8,929,191
Incurred losses and loss adjustment expenses:
Current accident year	2,454,912			2,340,868
Prior accident years	(336,942		)	(389,740		)
Total incurred losses and loss adjustment expenses	2,117,970			1,951,128
Payments:
Current accident year	410,493			390,245
Prior accident years	1,597,117			1,438,224
Total payments	2,007,610			1,828,469
Effect of foreign currency rate changes	(669		)	368
Net reserves for losses and loss adjustment expenses, end of period	9,272,590			9,052,218
Reinsurance recoverables on unpaid losses	5,165,226			4,836,271
Gross reserves for losses and loss adjustment expenses, end of period	$	14,437,816		$	13,888,489

For the nine months ended September 30, 2019, incurred losses and loss adjustment expenses included $336.9 million of favorable development on prior years' loss reserves, which included $257.7 million of favorable development on the Company's general liability, workers' compensation and professional liability product lines within the Insurance segment, and aviation, auto and whole account product lines within the Reinsurance segment.

In 2019, underwriting results included $42.6 million of underwriting loss from Hurricane Dorian and Typhoon Faxai (2019 Catastrophes). The underwriting loss on the 2019 Catastrophes was comprised of $45.1 million of estimated losses and loss adjustment expenses partially offset by $2.5 million of net assumed reinstatement premiums. The estimated losses and loss adjustment expenses on the 2019 Catastrophes for the nine months ended September 30, 2019 were net of estimated ceded losses of $4.8 million. Both the gross and net loss estimates on the 2019 Catastrophes represent the Company's best estimate of losses based upon information currently available. The Company's estimate for these losses is based on preliminary industry loss estimates, output from both industry and proprietary models as well as a review of in-force contracts, and for Hurricane Dorian, claims received to date and detailed policy level reviews. Early industry loss estimates for Typhoon Faxai have a wide range of variability. While the Company believes its reserves for the 2019 Catastrophes as of September 30, 2019 are adequate, the Company continues to closely monitor industry loss estimates and reported claims and will adjust its estimates of gross and net losses as new information becomes available.

For the nine months ended September 30, 2018, incurred losses and loss adjustment expenses included $389.7 million of favorable development on prior years' loss reserves, which included $312.2 million of favorable development on the Company's general liability, workers' compensation, marine and energy and professional liability product lines within the Insurance segment and credit and surety and marine and energy product lines within the Reinsurance segment.

In 2018, underwriting results included $75.7 million of underwriting loss from Hurricane Florence and Typhoon Jebi (2018 Catastrophes). The underwriting loss on the 2018 Catastrophes was comprised of $77.8 million of estimated losses and loss adjustment expenses partially offset by $2.1 million of net assumed reinstatement premiums. The estimated losses and loss adjustment expenses on the 2018 Catastrophes for the nine months ended September 30, 2018 were net of estimated ceded losses of $28.6 million.