Reserve for Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Summary of reserve for losses and loss adjustment expenses

Activity in the reserve for losses and loss adjustment expenses is summarized as follows:



(In thousands)	2017			2016			2015
Balance, beginning of year	$	1,993,428		$	2,005,326		$	2,058,266
Less reinsurance recoverables on unpaid losses and loss adjustment expenses	273,475			249,350			237,966
Net balance, beginning of year	1,719,953			1,755,976			1,820,300
Net losses:
Current year	603,518			587,007			571,891
Favorable development of reserves established in prior years, net	(134,360		)	(143,778		)	(161,180		)
Total	469,158			443,229			410,711
Paid related to:
Current year	(106,633		)	(96,190		)	(84,186		)
Prior years	(369,682		)	(383,062		)	(390,849		)
Total paid	(476,315		)	(479,252		)	(475,035		)
Net balance, end of year	1,712,796			1,719,953			1,755,976
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses	335,585			273,475			249,350
Balance, end of year	$	2,048,381		$	1,993,428		$	2,005,326

Summary of short-duration insurance contracts claims development



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					December 31, 2017
($ in thousands)	Year Ended December 31																				IBNR*		Cumulative Number of Reported Claims
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	52,155	$	55,507	$	55,090	$	54,885	$	54,950	$	57,722	$	57,928	$	56,676	$	57,239	$	57,239	$	51	13,836
2009	—		$	62,255	$	60,802	$	60,351	$	60,413	$	62,731	$	63,942	$	63,398	$	62,631	62,631		$	143	13,091
2010	—		—		$	75,699	$	74,196	$	73,647	$	72,742	$	72,278	$	72,504	$	71,684	71,642		$	469	15,960
2011	—		—		—		$	84,074	$	84,762	$	90,769	$	91,491	$	90,993	$	91,149	91,390		$	535	18,778
2012	—		—		—		—		$	102,044	$	96,884	$	95,716	$	95,204	$	94,627	94,319		$	1,140	20,151
2013	—		—		—		—		—		$	111,268	$	111,730	$	114,171	$	115,115	115,556		$	1,269	20,577
2014	—		—		—		—		—		—		$	120,443	$	121,128	$	121,206	119,778		$	3,724	21,179
2015	—		—		—		—		—		—		—		$	135,960	$	132,408	126,636		$	12,731	22,139
2016	—		—		—		—		—		—		—		—		$	138,546	131,000		$	30,355	21,947
2017	—		—		—		—		—		—		—		—		—		142,363		$	59,622	21,880
Total																			$	1,012,554
* Includes expected development on reported claims



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	15,246	$	35,879	$	45,998	$	51,256	$	54,050	$	55,697	$	56,305	$	56,582	$	56,727	$	57,051
2009	—		$	19,575	$	42,122	$	52,428	$	57,971	$	60,445	$	61,150	$	61,951	$	62,052	62,130
2010	—		—		$	26,353	$	51,766	$	61,612	$	67,095	$	69,050	$	70,049	$	70,308	70,588
2011	—		—		—		$	27,863	$	64,874	$	79,432	$	85,743	$	88,129	$	89,040	89,768
2012	—		—		—		—		$	34,574	$	70,179	$	82,953	$	88,350	$	91,291	92,382
2013	—		—		—		—		—		$	38,125	$	82,320	$	100,522	$	107,019	110,496
2014	—		—		—		—		—		—		$	40,268	$	87,768	$	103,771	111,799
2015	—		—		—		—		—		—		—		$	43,112	$	86,553	102,702
2016	—		—		—		—		—		—		—		—		$	39,199	81,038
2017	—		—		—		—		—		—		—		—		—		43,973
Total																			821,927

All outstanding liabilities before 2008, net of reinsurance																			2,908
Liabilities for losses and loss adjustment expenses, net of reinsurance																			$	193,535

Medical Technology Liability Claims-Made



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					December 31, 2017
($ in thousands)	Year Ended December 31																				IBNR*		Cumulative Number of Reported Claims
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	43,427	$	45,788	$	48,187	$	45,156	$	42,409	$	37,783	$	38,280	$	35,330	$	34,716	$	34,441	$	463	943
2009	—		$	30,462	$	31,183	$	27,523	$	26,181	$	23,425	$	21,733	$	20,551	$	19,264	18,176		$	474	699
2010	—		—		$	26,077	$	27,063	$	25,175	$	23,307	$	19,315	$	17,439	$	16,047	16,878		$	627	497
2011	—		—		—		$	17,249	$	20,930	$	19,166	$	15,836	$	13,794	$	12,487	12,358		$	1,050	521
2012	—		—		—		—		$	11,162	$	9,989	$	8,906	$	7,441	$	5,824	4,797		$	1,029	220
2013	—		—		—		—		—		$	9,807	$	9,955	$	9,536	$	7,226	4,697		$	1,337	218
2014	—		—		—		—		—		—		$	9,989	$	10,306	$	9,012	8,984		$	4,127	272
2015	—		—		—		—		—		—		—		$	9,376	$	8,757	7,193		$	4,363	154
2016	—		—		—		—		—		—		—		—		$	9,200	8,467		$	5,725	180
2017	—		—		—		—		—		—		—		—		—		11,049		$	10,366	82
Total																			$	127,040
* Includes expected development on reported claims



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	4,325	$	14,772	$	26,901	$	26,620	$	32,653	$	34,588	$	34,567	$	34,567	$	34,567	$	34,567
2009	—		$	116	$	5,071	$	7,742	$	14,675	$	14,933	$	15,097	$	15,184	$	15,186	16,515
2010	—		—		$	485	$	3,557	$	8,491	$	12,283	$	11,725	$	12,146	$	12,253	15,366
2011	—		—		—		$	118	$	2,034	$	3,846	$	5,062	$	7,376	$	7,240	7,799
2012	—		—		—		—		$	568	$	1,520	$	2,805	$	3,247	$	3,366	3,676
2013	—		—		—		—		—		$	102	$	1,029	$	1,967	$	2,599	3,092
2014	—		—		—		—		—		—		$	388	$	1,527	$	2,564	3,046
2015	—		—		—		—		—		—		—		$	25	$	440	1,625
2016	—		—		—		—		—		—		—		—		$	53	1,690
2017	—		—		—		—		—		—		—		—		—		56
Total																			87,432

All outstanding liabilities before 2008, net of reinsurance																			1,162
Liabilities for losses and loss adjustment expenses, net of reinsurance																			$	40,770

Lloyd's Syndicate Casualty



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance									December 31, 2017
($ in thousands)	Year Ended December 31								IBNR⁽¹⁾		Cumulative Number of Reported Claims⁽²⁾
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	6,121	$	5,823	$	5,620	$	5,557	$	1,145	nm
2015	—		$	14,859	$	14,557	14,445		$	2,981	nm
2016	—		—		$	19,622	19,756		$	8,248	nm
2017	—		—		—		22,056		$	16,083	nm
Total							$	61,814
⁽¹⁾ Includes expected development on reported claims
⁽²⁾ The abbreviation "nm" indicates that the information is not meaningful



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	20	$	476	$	4,103	$	4,227
2015	—		$	726	$	6,316	10,331
2016	—		—		$	2,502	8,460
2017	—		—		—		2,615
Total							25,633

All outstanding liabilities before 2014, net of reinsurance							—
Liabilities for losses and loss adjustment expenses, net of reinsurance							$	36,181

Lloyd's Syndicate Property Insurance



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance									December 31, 2017
($ in thousands)	Year Ended December 31								IBNR*		Cumulative Number of Reported Claims
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	892	$	1,091	$	890	$	866	$	1,145	118
2015	—		$	5,540	$	5,940	6,221		$	2,981	893
2016	—		—		$	11,942	13,223		$	8,248	2,268
2017	—		—		—		15,005		$	16,083	2,723
Total							$	35,315
* Includes expected development on reported claims



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	267	$	1,007	$	838	$	856
2015	—		$	3,172	$	4,032	4,822
2016	—		—		$	7,769	11,219
2017	—		—		—		7,996
Total							$	24,893

All outstanding liabilities before 2014, net of reinsurance							—
Liabilities for losses and loss adjustment expenses, net of reinsurance							$	10,422

Lloyd's Syndicate Property Reinsurance



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance									December 31, 2017
($ in thousands)	Year Ended December 31								IBNR⁽¹⁾			Cumulative Number of Reported Claims ⁽²⁾
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	836	$	934	$	995	$	994	$	(1	)	nm
2015	—		$	2,803	$	2,840	2,287		$	(186	)	nm
2016	—		—		$	4,517	4,063		$	1,873		nm
2017	—		—		—		6,888		$	2,073		nm
Total							$	14,232
⁽¹⁾ Includes expected development on reported claims
⁽²⁾ The abbreviation "nm" indicates that the information is not meaningful



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2014		2015		2016		2017
Accident Year	Unaudited
2014	$	79	$	920	$	988	$	988
2015	—		$	1,324	$	1,819	2,013
2016	—		—		$	617	1,689
2017	—		—		—		4,158
Total							8,848

All outstanding liabilities before 2014, net of reinsurance							—
Liabilities for losses and loss adjustment expenses, net of reinsurance							$	5,384

Healthcare Professional Liability Claims-Made



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					December 31, 2017
($ in thousands)	Year Ended December 31																				IBNR*			Cumulative Number of Reported Claims
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	402,293	$	397,571	$	391,214	$	345,855	$	298,849	$	269,462	$	259,272	$	247,123	$	240,472	$	240,877	$	889		3,737
2009	—		$	379,259	$	370,642	$	345,714	$	320,368	$	284,511	$	265,478	$	246,146	$	230,849	224,768		$	(592	)	3,826
2010	—		—		$	364,996	$	354,787	$	338,170	$	312,813	$	291,553	$	279,713	$	270,484	258,466		$	190		3,846
2011	—		—		—		$	348,916	$	344,808	$	331,884	$	305,540	$	289,400	$	278,258	264,777		$	731		3,532
2012	—		—		—		—		$	341,289	$	324,418	$	319,613	$	306,956	$	291,075	279,589		$	(429	)	3,707
2013	—		—		—		—		—		$	315,346	$	304,209	$	296,550	$	287,140	272,364		$	1,422		3,807
2014	—		—		—		—		—		—		$	290,020	$	289,397	$	280,043	267,442		$	(3,635	)	3,352
2015	—		—		—		—		—		—		—		$	276,492	$	269,980	271,138		$	(15,351	)	3,307
2016	—		—		—		—		—		—		—		—		$	271,765	274,643		$	(7,499	)	3,398
2017	—		—		—		—		—		—		—		—		—		283,746		$	119,172		3,217
Total																			$	2,637,810
* Includes expected development on reported claims



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	14,214	$	67,971	$	128,800	$	166,544	$	197,042	$	212,789	$	221,150	$	226,903	$	232,598	$	234,704
2009	—		$	15,051	$	71,272	$	114,318	$	153,563	$	178,445	$	191,420	$	200,425	$	205,372	209,016
2010	—		—		$	15,464	$	69,551	$	137,712	$	180,432	$	209,777	$	221,693	$	236,171	240,945
2011	—		—		—		$	14,417	$	71,208	$	133,004	$	177,089	$	198,112	$	214,502	224,982
2012	—		—		—		—		$	15,382	$	73,571	$	145,488	$	190,997	$	215,220	231,652
2013	—		—		—		—		—		$	16,938	$	69,657	$	127,496	$	171,681	197,265
2014	—		—		—		—		—		—		$	16,764	$	59,485	$	116,791	154,236
2015	—		—		—		—		—		—		—		$	9,172	$	55,731	111,741
2016	—		—		—		—		—		—		—		—		$	9,027	51,869
2017	—		—		—		—		—		—		—		—		—		16,309
Total																			1,672,719

All outstanding liabilities before 2008, net of reinsurance																			14,660
Liabilities for losses and loss adjustment expenses, net of reinsurance																			$	979,751

Healthcare Professional Liability Occurrence



Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					December 31, 2017
($ in thousands)	Year Ended December 31																				IBNR*		Cumulative Number of Reported Claims
	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
Accident Year	Unaudited
2008	$	42,258	$	45,006	$	47,019	$	43,676	$	35,458	$	29,492	$	28,887	$	26,126	$	23,473	$	21,710	$	976	283
2009	—		$	34,450	$	35,366	$	36,802	$	37,437	$	34,099	$	32,675	$	28,731	$	26,340	24,572		$	1,794	246
2010	—		—		$	41,721	$	43,238	$	43,195	$	42,233	$	37,920	$	35,831	$	33,361	29,338		$	3,014	290
2011	—		—		—		$	45,882	$	44,956	$	41,453	$	39,917	$	37,150	$	35,004	32,343		$	4,240	343
2012	—		—		—		—		$	45,703	$	46,513	$	44,848	$	40,692	$	34,774	32,691		$	5,573	396
2013	—		—		—		—		—		$	32,746	$	36,602	$	35,624	$	34,393	30,906		$	3,797	355
2014	—		—		—		—		—		—		$	30,420	$	29,918	$	32,143	29,869		$	8,234	340
2015	—		—		—		—		—		—		—		$	35,648	$	35,347	37,346		$	10,172	315
2016	—		—		—		—		—		—		—		—		$	29,609	28,790		$	21,178	245
2017	—		—		—		—		—		—		—		—		—		24,571		$	28,886	129
Total																			$	292,136
* Includes expected development on reported claims



Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
(In thousands)	Year Ended December 31
	2008		2009		2010		2011		2012		2013		2014		2015			2016			2017
Accident Year	Unaudited
2008	$	70	$	1,048	$	3,347	$	6,269	$	10,649	$	12,403	$	15,661	$	16,564		$	17,799		$	17,808
2009	—		$	175	$	2,255	$	5,067	$	7,947	$	10,823	$	13,248	$	15,380		$	16,025		16,270
2010	—		—		$	285	$	1,881	$	5,647	$	9,120	$	15,147	$	21,837		$	22,804		23,313
2011	—		—		—		$	291	$	2,803	$	8,059	$	16,544	$	19,197		$	21,416		23,194
2012	—		—		—		—		$	363	$	2,430	$	7,705	$	12,212		$	19,275		21,435
2013	—		—		—		—		—		$	369	$	3,170	$	7,826		$	14,753		16,787
2014	—		—		—		—		—		—		$	394	$	2,260		$	7,460		10,519
2015	—		—		—		—		—		—		—		$	(350	)	$	786		4,854
2016	—		—		—		—		—		—		—		—			$	(182	)	(195		)
2017	—		—		—		—		—		—		—		—			—			(6,809		)
Total																					127,176

All outstanding liabilities before 2008, net of reinsurance																					11,693
Liabilities for losses and loss adjustment expenses, net of reinsurance																					$	176,653

Schedule of historical claims duration



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

Years	1		2		3		4		5		6		7		8		9		10
	Unaudited
Workers' Compensation	32.3	%	36.7	%	14.9	%	7.2	%	3.4	%	1.5	%	0.9	%	0.3	%	0.2	%	0.6	%



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

Years	1	2	3	4	5	6	7	8	9	10
	Unaudited
Healthcare Professional Liability Claims-Made	5.4%	19.8%	22.9%	16.1%	10.2%	5.8%	4.3%	2.1%	2.0%	0.9%
Healthcare Professional Liability Occurrence	(2.3%)	5.6%	13.8%	15.7%	14.8%	10.8%	8.1%	2.8%	3.3%	—%



Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
	Unaudited
Medical technology liability	3.7	%	18.7	%	21.1	%	14.0	%	7.9	%	2.9	%	1.4	%	6.2	%	3.7	%	—%



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

Years	1		2		3		4		5		6		7		8	9	10
	Unaudited
Lloyd's Syndicate Casualty	24.7	%	49.4	%	16.7	%	6.0	%	2.0	%	0.4	%	0.4	%	—%	—%	—%
Lloyd's Syndicate Property Insurance	80.8	%	15.5	%	2.5	%	0.6	%	0.3	%	0.1	%	0.1	%	—%	—%	—%
Lloyd's Syndicate Property Reinsurance	78.6	%	16.4	%	2.8	%	1.6	%	0.4	%	0.2	%	0.1	%	—%	—%	—%

Reconciliation of claims development to liability

Below is a reconciliation of the claims development information to the Consolidated Balance Sheet:



(In thousands)	December 31, 2017
Net outstanding liabilities
Healthcare professional liability claims-made	$	979,751
Healthcare professional liability occurrence	176,653
Medical technology liability claims-made	40,770
Workers' compensation	193,535
Lloyd's syndicate casualty	36,181
Lloyd's syndicate property insurance	10,422
Lloyd's syndicate property reinsurance	5,384
Other short-duration lines	92,212
Liabilities for losses and loss adjustment expenses, net of reinsurance	1,534,908

Reinsurance recoverable on unpaid losses
Healthcare professional liability claims-made	140,159
Healthcare professional liability occurrence	25,960
Medical technology liability claims-made	44,458
Workers' compensation	79,800
Lloyd's syndicate casualty	—
Lloyd's syndicate property insurance	13,889
Lloyd's syndicate property reinsurance	20,670
Other short-duration lines	10,649
Total reinsurance recoverable on unpaid losses and loss adjustment expenses	335,585

Reserve for the future utilization of the DDR benefit	75,400
Unallocated loss adjustment expenses	106,531
Purchase accounting	3,102
Other	(7,145		)
	177,888
Gross liability for losses and loss adjustment expenses	$	2,048,381