RESERVE FOR LOSSES AND LOSS EXPENSES

12 Months Ended

Dec. 31, 2016

Insurance Loss Reserves [Abstract]

RESERVE FOR LOSSES AND LOSS EXPENSES

Reserving Methodology

The reserving process begins with the collection and analysis of paid and incurred claim data for each of our segments. The segmental data is disaggregated by reserving class and further disaggregated by either accident year (i.e. the year in which the loss event occurred) or by underwriting year (i.e. the year in which the contract generating the premium and losses incepted). We use underwriting year information to analyze our reinsurance business and subsequently allocate reserves to the respective accident years. Our reserving classes are selected to ensure that the underlying contracts have homogeneous loss development characteristics, while remaining large enough to make the estimation of trends credible. This data, in addition to industry benchmarks, serves as a key input to many of the methods employed by our actuaries. The relative weights assigned to our own historical loss data versus industry data vary according to the length of the development profile for the reserving class being evaluated. At present, we generally give more weight to our own experience (and, correspondingly, less weight to industry data) for reserving classes with short and medium claim tails. For some of our longer tail reserving classes we give material weight to industry data. (See ‘Net Incurred and Paid Claims Development Tables By Accident Year’ below for more detailed information by reserving class.)

The following tables reconcile reserving classes to the lines of business categories and the expected claim tails:

Insurance Segment
		Reported Lines of Business
Reserving Classes	Tail	Property	Marine	Terrorism	Aviation	Credit and Political Risk	Professional Lines	Liability	Accident and Health
Property and Other	Short	X		X					X
Marine	Short		X
Aviation	Short				X
Credit and Political Risk	Medium					X
Professional Lines	Medium						X
Liability	Long							X

Reinsurance Segment
		Reported Lines of Business
Reserving Classes	Tail	Catastrophe	Property	Credit and Surety	Professional Lines	Motor	Liability	Engineering	Agriculture	Marine and Other
Property and Other	Short	X	X					X	X	X
Credit and Surety	Medium			X
Professional Lines	Medium				X
Motor	Long					X
Liability	Long						X

Multiple actuarial methods are available to estimate ultimate losses. Each method has its own assumptions and its own advantages and disadvantages, with no single estimation method being better than the others in all situations and no one set of assumption variables being meaningful for all reserving classes. The relative strengths and weaknesses of the particular estimation methods when applied to a particular group of claims can also change over time.

The following is a brief description of the reserve estimation methods commonly employed by our actuaries:

• Expected Loss Ratio Method (“ELR Method”): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio to the earned or written premium for that year. Generally, expected loss ratios are based on one or more of (a) an analysis of historical loss experience to date, (b) pricing information and (c) industry data, adjusted as appropriate, to reflect changes in rates and terms and conditions. This method is insensitive to actual incurred losses for the accident year or underwriting year in question and is, therefore, often useful in the early stages of development when very few losses have been incurred. Conversely, the lack of sensitivity to incurred/paid losses for the accident year or underwriting year in question means that this method is usually inappropriate in later stages of an accident year or underwriting year’s development.

• Loss Development Method (also referred to as the Chain Ladder Method or Link Ratio Method): This method assumes that the losses incurred/paid for each accident year or underwriting year at a particular development stage follow a relatively similar pattern. It assumes that on average, every accident year or underwriting year will display the same percentage of ultimate losses incurred/paid at the same point in time after the inception of that year. The percentages incurred/paid are established for each development stage (e.g. 12 months, 24 months, etc.) after examining historical averages from historical loss development data and/or external industry benchmark information. Ultimate losses are then estimated by multiplying the actual incurred/paid losses by the reciprocal of the established incurred/paid percentage. The strengths of this method are that it reacts to loss emergence/payments and that it makes full use of historical claim emergence/payment experience. However, this method has weaknesses when the underlying assumption of stable loss development/payment patterns is not valid. This could be the consequence of changes in business mix, claim inflation trends or claim reporting practices and/or the presence of large claims, amongst other things. Furthermore, this method tends to produce volatile estimates of ultimate losses where there is volatility in the underlying incurred/paid patterns. In particular, where the expected percentage of incurred/paid losses is low, small deviations between actual and expected claims can lead to very volatile estimates of ultimate losses. As a result, this method is often unsuitable at early development stages for an accident year or underwriting year.

• Bornhuetter-Ferguson Method (“BF Method”): This method can be seen as a combination of the ELR and Loss Development Methods, under which the Loss Development Method is given progressively more weight as an accident year or underwriting year matures. The main advantage of the BF Method is that it provides a more stable estimate of ultimate losses than the Loss Development Method at earlier stages of development, while remaining more sensitive to emerging loss development than the ELR Method. In addition, the BF Method allows for the incorporation of external market information through the use of expected loss ratios, whereas the Loss Development Method does not incorporate such information.

As part of our loss reserve review process, our actuaries employ the estimation method(s) that they believe will produce the most reliable estimate of ultimate losses, at that particular evaluation date, for each reserving class and accident year or underwriting year combination. Often, this is a blend (i.e. weighted average) of the results of two or more appropriate actuarial methods. These ultimate loss estimates are generally utilized to evaluate the adequacy of our ultimate loss estimates for previous accident or underwriting years, as established in the prior reporting period. For the initial estimate of the current accident or underwriting year, the available claim data is typically insufficient to produce a reliable estimate of ultimate losses. As a result, our initial estimate for an accident or underwriting year is generally based on the ELR Method for longer tailed lines and a BF Method for shorter tailed lines. The initial ELR for each reserving class is established collaboratively by our actuaries, underwriters and management at the start of the year as part of the planning process, taking into consideration prior accident years’ or underwriting years' experience and industry benchmarks, adjusted after considering factors such as exposure trends, rate differences, changes in contract terms and conditions, business mix changes and other known differences between the current year and prior accident or underwriting years. The initial expected loss ratios for a given accident or underwriting year may be modified over time if the underlying assumptions, such as loss development or premium rate changes, differ from the original assumptions.

The use of the above actuarial methods requires us to make certain explicit assumptions, the most significant of which are: (1) expected loss ratios and (2) loss development patterns.

In our earlier years, we placed significant reliance on industry benchmarks in establishing our expected loss ratios and loss development patterns. Over time, we have placed more reliance on our historical loss experience in establishing these ratios and patterns where we believe the weight of our own actual experience has become sufficiently credible for consideration. In establishing expected loss ratios for our insurance segment, we give consideration to a number of other factors, including exposure trends, rate adequacy on new and renewal business, ceded reinsurance costs, changes in claims emergence and our underwriters’ view of terms and conditions in the market environment. For our reinsurance segment, expected loss ratios are based on a contract-by-contract review, which considers information provided by clients together with estimates provided by our underwriters and actuaries about the impact of changes in pricing, terms and conditions and coverage. We also have considered the market experience of some classes of business as compiled and analyzed by an independent actuarial firm, as appropriate. The weight given to our experience differs for each of our three claim tails.

Our short-tail business generally includes exposures for which losses are usually known and paid within a relatively short period of time after the underlying loss event has occurred. We expect that the majority of development for an accident year or underwriting year will be recognized in the subsequent one to three years. The key actuarial assumptions for our short-tail business in our early accident years were primarily developed with reference to industry benchmarks for both expected loss ratios and loss development patterns. As our own historical loss experience amassed, it gained credibility and became relevant for consideration in establishing these key actuarial assumptions. As a result, we gradually increased the weighting assigned to our own historical experience in selecting the expected loss ratios and loss development patterns utilized to establish our estimates of ultimate losses for an accident year. Due to the relatively short reporting and settlement patterns for our short-tail business, we generally place more weight upon experience-based methods and other qualitative considerations in establishing reserves for both our recent and more mature accident years.

Our medium-tail business generally has claim reporting and settlement periods longer than those of our short-tail reserving classes. For our earliest accident and underwriting years, our initial key actuarial expected loss ratio and loss development assumptions were established utilizing industry benchmarks. Due to the longer claim tail, the length of time required to develop our own credible loss history for use in the reserving process is greater for our medium-tail business than for our short-tail business. As a result, the number of years where we relied heavily on industry benchmarks to establish our key actuarial assumptions is greater for our medium-tail business.

The claim tails for our long-tail business, in contrast to our short and medium-tail business, is expected to be notably longer, as claims are often reported and ultimately paid or settled years, or even decades, after the related loss events occur. As a general rule, our estimates of accident year or underwriting year ultimate losses for our long-tail business are notably more uncertain than those for our short and medium-tail business. To date, our key actuarial assumptions for our long-tail business have been derived extensively from industry benchmarks supplemented with our own historical experience. Given our relatively short operating history in comparison to the development tail for this business, we do not believe that our own historical loss development for our long-tail business has amassed an appropriate volume to serve as a fully credible input into the key actuarial assumptions previously outlined. While we consider industry benchmarks that we believe reflect the nature and coverage of our business, our actual loss experience may differ from the benchmarks based on industry averages. Due to the length of the development tail for this business, our reserve estimates for most accident years and underwriting years are predominantly based on the BF or ELR method and the consideration of qualitative factors.

We cannot estimate losses from widespread catastrophic events, such as hurricanes and earthquakes, using the traditional actuarial methods described above. Rather, loss reserves for such events are estimated by management in collaboration with our actuaries, claim handlers and underwriters after a catastrophe occurs by completing an in-depth analysis of individual contracts which may potentially be impacted by the catastrophic event. This in-depth analysis may rely on several sources of information, including: (1) estimates of the size of insured industry losses from the catastrophic event and our corresponding market share; (2) a review of our portfolio of contracts performed to identify those contracts which may be exposed to the catastrophic event; (3) a review of modeled loss estimates based on information previously reported by customers and brokers, including exposure data obtained during the underwriting process; (4) discussions of the impact of the event with our customers and brokers and (5) catastrophe bulletins published by various independent statistical reporting agencies. We generally use a blend of these information sources to arrive at our aggregate estimate of the ultimate losses arising from the catastrophic event. In subsequent reporting periods, we review changes in paid and incurred losses in relation to each significant catastrophe and adjust our estimates of ultimate losses for each event if there are developments that are different from our previous expectations. Adjustments are recorded in the period in which they are identified.

Our reserving process involves the collaboration of our underwriting, claims, actuarial, legal, ceded reinsurance and finance departments, includes various segmental committee meetings and culminates with the approval of a single point best estimate by our Group Reserving Committee, which comprises senior management. In selecting this best estimate, management considers actuarial estimates and applies informed judgment regarding qualitative factors that may not be fully captured in these actuarial estimates. Such factors include, but are not limited to: the timing of the emergence of claims, volume and complexity of claims, social and judicial trends, potential severity of individual claims and the extent of internal historical loss data versus industry information. While these qualitative factors are considered in arriving at the point estimate, no specific provisions for qualitative factors are established.

Reserve for Losses and Loss Expenses

Our gross reserve for losses and loss expenses comprise the following:

As of December 31,	2016		2015
Reserve for reported losses and loss expenses	$	3,358,514	$	3,253,080
Reserve for losses incurred but not reported	6,339,313		6,393,205
Reserve for losses and loss expenses	$	9,697,827	$	9,646,285

Reserve Roll-Forward

The following table presents a reconciliation of our beginning and ending gross reserve for losses and loss expenses and net reserve for unpaid losses and loss expenses for the years indicated:

Year ended December 31,	2016			2015			2014
Gross reserve for losses and loss expenses, beginning of year	$	9,646,285		$	9,596,797		$	9,582,140
Less reinsurance recoverable on unpaid losses, beginning of year	(2,031,309		)	(1,890,280		)	(1,900,112		)
Net reserve for unpaid losses and loss expenses, beginning of year	7,614,976			7,706,517			7,682,028
Net incurred losses and loss expenses related to:
Current year	2,496,574			2,419,247			2,445,666
Prior years	(292,377		)	(243,048		)	(258,944		)
	2,204,197			2,176,199			2,186,722
Net paid losses and loss expenses related to:
Current year	(428,153		)	(343,063		)	(387,197		)
Prior years	(1,763,696		)	(1,709,659		)	(1,544,664		)
	(2,191,849		)	(2,052,722		)	(1,931,861		)
Foreign exchange and other	(205,606		)	(215,018		)	(230,372		)
Net reserve for unpaid losses and loss expenses, end of year	7,421,718			7,614,976			7,706,517
Reinsurance recoverable on unpaid losses, end of year	2,276,109			2,031,309			1,890,280
Gross reserve for losses and loss expenses, end of year	$	9,697,827		$	9,646,285		$	9,596,797

We write business with loss experience generally characterized as low frequency and high severity in nature, which can result in volatility in our financial results. During 2016, 2015 and 2014, respectively, we recognized aggregate net losses and loss expenses, net of reinstatement premiums of $204 million, $100 million and $93 million in relation to catastrophe and weather-related events.

During April 2016, the Company entered into a quota share and adverse development cover reinsurance agreement, a retroactive contract which was deemed to have met the established criteria for retroactive reinsurance accounting. Foreign exchange and other includes reinsurance recoverables of $150 million related to this reinsurance agreement.

Prior Year Development

Prior year reserve development arises from changes to loss and loss expense estimates related to loss events that occurred in previous calendar years. Such development is summarized by segment in the following table:

	Insurance		Reinsurance		Total
Year ended December 31, 2016	$	55,905	$	236,472	$	292,377
Year ended December 31, 2015	23,447		219,601		243,048
Year ended December 31, 2014	63,735		195,209		258,944

The majority of the net favorable prior year reserve development in each period related to short-tail reserve classes. Net favorable prior year reserve development for motor, liability, professional lines, and credit and surety reinsurance reserve classes as well as insurance professional lines reserve classes also contributed in 2016.

Our short tail business includes the underlying exposures in our property and other, marine and aviation reserve classes within our insurance segment and the property and other reserve class within our reinsurance segment. Development from these classes contributed $148 million, $152 million and $207 million of the total net favorable prior year reserve development in 2016, 2015 and 2014, respectively, and primarily reflected the recognition of better than expected loss emergence.

Our medium-tail business consists primarily of professional insurance and reinsurance reserve classes, credit and political risk insurance reserve class, and credit and surety reinsurance reserve class. Our reinsurance professional reserve class business recognized $30 million, $38 million and $33 million of net favorable prior year development in 2016, 2015 and 2014, respectively. The 2016, 2015 and 2014 favorable loss developments on these reserve classes continued to reflect the generally favorable experience on earlier accident years as we continued to transition to more experience based methods. As our loss experience has generally been better than expected, this resulted in the recognition of net favorable prior year reserve development. In 2016, the insurance professional lines recorded $14 million of net favorable prior year development driven by overall better than expected development. In 2015, the insurance professional lines recorded adverse prior year reserve development of $14 million which was primarily the result of strengthening our Australian book of business during the third quarter of 2015. Our credit and surety lines recorded net favorable prior year reserve development of $10 million and $27 million in 2016 and 2015, respectively. This net favorable prior year reserve development reflected the recognition of generally better than expected loss emergence. In 2015, net adverse development of $15 million was recognized in our in credit and political risk insurance lines relating primarily to an increase in loss estimates for one specific claim.

Our long-tail business consists primarily of liability and motor reserve classes. In 2016, 2015 and 2014, our motor and reinsurance liability reserve classes contributed net favorable prior year reserve development of $99 million, $82 million and $40 million, respectively. The net favorable prior year reserve development for the motor reserve class related to favorable loss emergence trends on several classes of business spanning multiple accident years. The net favorable prior year reserve

development for our reinsurance liability reserve class primarily reflected the progressively increased weight given by

management to experience based indications on older accident years, which has generally been favorable. This favorable development was partially offset by adverse development in our insurance liability reserve class of $8 million, $27 million and $23 million in 2016, 2015 and 2014, respectively, related primarily to an increase in loss estimates for specific individual

claim reserves as well as a higher frequency of large auto liability claims which impacted the adverse reserve development in

2015.

Our December 31, 2016 net reserve for losses and loss expenses includes estimated amounts for numerous catastrophe events. We caution that the magnitude and/or complexity of losses arising from certain of these events, in particular the Hurricane Matthew, Fort McMurray wildfires, Storm Sandy, the 2011 Japanese earthquake and tsunami, the 2010-11 New Zealand earthquakes and the Tianjin port explosion, inherently increases the level of uncertainty and, therefore, the level of management judgment involved in arriving at our estimated net reserves for losses and loss expenses. As a result, our actual losses for these events may ultimately differ materially from our current estimates.

Net Incurred and Paid Claims Development Tables By Accident Year

The following tables present net incurred and paid claims development by accident year, total incurred-but-not-reported liabilities plus expected development on reported claims, cumulative reported claims frequency and claims duration for each reserve class. The development triangles are presented on an accident year basis for both our Insurance and Reinsurance segments. We do not discount our unpaid losses and loss expense reserves.

Non-U.S. dollar denominated loss data is converted to U.S dollar at the rates of exchange in effect at the balance sheet date for material underlying currencies. Fluctuations in currency exchange rates may cause material shifts in loss development. Reserves for losses and loss expenses, disclosed on our consolidated balance sheets, are also revalued using the exchange rate at the balance sheet date.

There are many considerations in establishing loss reserves and an attempt to evaluate our loss reserves using solely the data presented in these tables could be misleading. We caution against mechanical application of standard actuarial methodologies to project ultimate losses using data presented in this disclosure.

Insurance Segment

The reporting of cumulative claims frequency for the reserve classes within our Insurance segment has been measured by counting the number of unique claim references including claim references assigned to nil and nominal case reserves. Claim references are grouped by claimant by loss event for each class of business. For certain insurance facilities and business produced by managing general agents where underlying data is reported to the Company in an aggregated format, the information necessary to provide cumulative claims frequency is not available therefore reporting of claims frequency is deemed to be impracticable.

Insurance Property and Other

This reserve class includes our property, terrorism and accident and health lines of business. Our property line of business provides physical loss or damage, business interruption and machinery breakdown coverage for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore energy installations. This line of business consists of both primary and excess risks, some of which are catastrophe-exposed. Our terrorism line of business provides coverage for physical damage and business interruption of an insured following an act of terrorism. Our accident and health line of business includes accidental death, travel insurance and specialty health products for employer and affinity groups, as well as accident and health reinsurance for catastrophic or per life events on a quota share and/or excess of loss basis, with aggregate and/or per person deductibles. The accident and health line of business has contributed an increasing portion of the premium earned within this reserve class from 2010 forward with a large increase in reported claims observed from 2012. In general, paid and reporting patterns are relatively short-tailed although they can be volatile due to the incidence of catastrophe events.

Insurance Property and Other
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	209,411	$	162,796	$	160,343	$	151,107	$	149,236	$	149,580	$	148,350	$	147,875	$	147,552	$	147,178	$	449	834
2008			318,702		273,666		265,330		255,880		240,324		238,882		234,488		232,738		231,713		2,017		1,573
2009					120,169		101,823		92,505		85,202		83,139		80,983		81,204		80,880		815		1,483
2010							182,337		155,368		147,867		122,700		117,130		116,193		115,888		469		2,309
2011									386,326		364,736		340,974		317,110		316,756		315,517		2,583		3,736
2012											463,117		470,059		446,790		426,457		422,394		9,381		27,679
2013													421,113		414,793		387,086		381,573		10,120		51,231
2014															471,402		467,335		442,392		19,696		60,120
2015																	378,216		375,867		38,959		43,312
2016																			519,834		189,742		51,460
																	Total		$	3,033,236

Insurance Property and Other
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	54,533	$	105,253	$	126,050	$	134,379	$	137,481	$	139,931	$	146,404	$	146,717	$	146,807	$	146,563
2008			83,640		164,425		186,147		197,852		224,874		227,438		229,498		228,989		228,945
2009					34,370		63,009		71,529		75,366		76,212		77,228		79,435		79,717
2010							48,970		87,621		96,449		107,257		111,450		111,543		111,349
2011									88,982		221,701		282,382		304,349		305,184		305,007
2012											107,441		278,331		341,818		364,966		372,567
2013													128,519		302,372		345,866		359,867
2014															173,615		345,785		398,150
2015																	124,166		280,577
2016																			173,233
Total																			2,455,975
All outstanding liabilities before 2007, net of reinsurance																			5,376
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	582,637

Insurance Property and Other
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
35.1%	38.5%	12.4%	5.9%	3.4%	0.8%	2.0%	0.1%	0.1%	(0.2)%

Insurance Marine

This reserve class comprises our marine line of business and provides coverage for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie as well as hull and war. Offshore energy coverage includes physical damage, business interruption, operators extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases. The complex nature of claims arising under our marine policies tends to result in payment and reporting patterns that are longer than those of our property and other class. Exposure to natural perils such as windstorm and earthquake can result in volatility.

Insurance Marine
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims			Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	96,533	$	95,994	$	106,228	$	100,962	$	97,949	$	96,304	$	94,612	$	92,405	$	92,077	$	92,063	$	257		684
2008			107,697		108,208		103,287		102,201		95,006		88,612		84,848		84,483		84,221		324			516
2009					82,075		75,532		71,049		65,787		58,383		56,208		54,774		53,652		531			475
2010							67,916		69,312		65,198		52,161		50,248		47,397		45,934		(1,368		)	472
2011									90,608		78,293		72,137		65,383		65,363		65,572		2,449			602
2012											89,663		82,344		68,315		70,404		71,370		9,821			697
2013													79,011		99,885		94,917		95,954		9,907			727
2014															59,880		44,221		47,870		8,864			794
2015																	158,240		138,915		23,853			850
2016																			86,115		41,293			804
																	Total		$	781,666

Insurance Marine
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	14,828	$	35,176	$	57,907	$	76,551	$	82,021	$	85,219	$	85,211	$	86,792	$	90,115	$	90,267
2008			22,745		54,266		70,590		78,641		79,737		83,465		83,546		83,692		83,772
2009					18,938		31,745		40,968		44,535		46,490		47,082		49,588		49,845
2010							17,387		27,822		32,327		41,158		43,962		44,730		45,634
2011									26,431		44,004		54,618		57,677		59,481		60,181
2012											10,669		38,301		44,463		49,100		49,891
2013													18,309		43,193		53,633		61,737
2014															6,359		14,877		26,111
2015																	21,584		54,575
2016																			12,459
Total																			534,472
All outstanding liabilities before 2007, net of reinsurance																			6,114
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	253,308

Insurance Marine
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
23.4%	26.6%	16.3%	10.8%	3.5%	2.4%	1.7%	0.8%	1.9%	0.2%

Insurance Aviation

This reserve class comprises our aviation line of business and provides hull and liability and specific war coverage primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers. The claims reporting pattern varies by coverage. Losses arising from war/terrorism and damage to hulls of aircraft are generally reported quickly. This is to be contrasted with liability claims which involve passengers and third parties and generally exhibit longer reporting and paid patterns. To date, the claims we have been advised of have predominantly related to damage to hulls, hence our payment and reporting patterns have typically exhibited a relatively short tail.

Insurance Aviation
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	29,801	$	25,466	$	22,682	$	17,043	$	16,756	$	16,352	$	14,427	$	12,958	$	12,853	$	12,422	$	53	270
2008			14,480		12,009		8,504		8,341		8,243		7,095		5,925		5,840		5,985		91		187
2009					17,408		14,490		18,680		18,007		16,835		16,535		15,351		14,519		176		317
2010							12,629		11,383		11,095		9,419		8,444		8,370		8,418		253		516
2011									17,721		15,377		12,763		9,536		8,404		7,257		434		730
2012											12,772		10,642		10,764		8,678		7,728		499		866
2013													15,647		16,313		15,179		15,223		1,010		1,005
2014															20,429		23,016		24,322		2,969		1,255
2015																	29,748		28,453		4,999		1,751
2016																			29,135		9,919		1,143
																	Total		$	153,462

Insurance Aviation
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	2,400	$	6,692	$	9,219	$	10,498	$	11,100	$	11,781	$	12,129	$	12,126	$	12,148	$	12,182
2008			488		2,057		3,074		3,655		4,205		4,475		4,651		5,258		5,514
2009					2,022		3,516		6,957		12,697		13,819		14,183		14,120		13,617
2010							745		3,819		5,995		6,567		7,230		7,345		7,788
2011									638		2,813		4,499		5,015		5,547		5,796
2012											951		2,848		4,133		5,927		6,793
2013													4,398		7,317		9,731		11,427
2014															3,985		8,011		11,672
2015																	8,077		16,137
2016																			10,396
Total																			101,322
All outstanding liabilities before 2007, net of reinsurance																			2,410
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	54,550

Insurance Aviation
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
18.1%	25.1%	19.7%	15.4%	8.0%	3.5%	2.7%	2.2%	2.3%	0.3%

Insurance Credit and Political Risk

This reserve class comprises our credit and political risk line of business and provides credit and political risk insurance products for banks and corporations. Coverage is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events. The credit insurance coverage is primarily for lenders seeking to mitigate the risk of non-payment from their borrowers. For the credit insurance contracts, it is necessary for the buyer of the insurance (most often a bank) to hold an insured asset (most often an underlying loan) in order to claim compensation under the insurance contract. Claims for this business tend to be characterized by their severity risk, as opposed to their frequency risk. Therefore, claim payment and reporting patterns are anticipated to be volatile. Under the notification provisions of our credit insurance, we anticipate being advised of an insured event within a relatively short time period. As a result, we generally estimate ultimate losses based on a contract-by-contract analysis which considers the contracts’ terms, the facts and circumstances of underlying loss events and qualitative input from claims managers.

Insurance Credit and Political Risk
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	50,812	$	44,972	$	16,695	$	5,253	$	898	$	898	$	3,609	$	3,642	$	3,667	$	2,741	$	200	2
2008			52,993		63,552		48,715		45,554		45,551		45,551		45,600		45,200		44,410		—		9
2009					248,082		305,277		326,017		335,525		335,398		335,258		335,278		339,557		1,740		24
2010							62,415		63,179		63,259		65,595		64,975		65,009		72,099		6,900		6
2011									58,154		48,665		47,706		48,361		48,333		45,036		17,400		4
2012											32,602		15,672		12,435		12,447		10,319		10,282		4
2013													26,439		25,684		9,759		9,880		1,600		1
2014															38,825		70,712		67,109		9,247		5
2015																	30,329		30,368		7,059		3
2016																			43,756		19,043		1
																	Total		$	665,275

Insurance Credit and Political Risk
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	—	$	2,798	$	4,263	$	4,236	$	4,236	$	4,236	$	4,236	$	4,236	$	4,236	$	4,236
2008			—		69,217		45,625		45,638		45,379		45,379		44,410		44,410		44,410
2009					92,841		344,648		346,248		346,209		341,564		345,508		345,507		345,555
2010							50,000		85,418		90,729		106,766		101,784		101,946		102,152
2011									32,788		37,205		27,636		27,636		27,636		27,636
2012											—		—		—		—		36
2013													745		2,235		3,726		5,216
2014															1,924		39,951		61,108
2015																	—		23,309
2016																			—
Total																			613,658
All outstanding liabilities before 2007, net of reinsurance																			20
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	51,637

Insurance Credit and Political Risk
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
18.0%	60.0%	4.2%	5.2%	(1.4)%	0.3%	(0.5)%	—%	—%	—%

Insurance Professional Lines

This reserve class comprises our professional line of business and provides coverage for directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, medical malpractice and other financial insurance related coverages for commercial enterprises, financial institutions and not-for-profit organizations. This business is predominantly written on a claims-made basis. Typically this reserve class is anticipated to exhibit medium to long tail claim reporting and settlement patterns.

With respect to our key actuarial assumptions, we are progressively giving more weight to our own experience when establishing our expected loss ratios and our selected loss development patterns, though we continue to consider industry benchmarks. Loss reporting patterns for professional lines business tend to be volatile, causing instability in actuarial indications based on incurred loss data until an accident year matures for a number of years. Consequently, our initial loss reserves for an accident year are generally based upon an ELR method and the consideration of relevant qualitative factors. As accident years mature, we increasingly give more weight to methods that reflect our actual experience until our selections are based almost exclusively on experience-based methods. We evaluate the appropriateness of the transition to experience-based methods at the reserving class level, commencing this transition when we believe that our incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which we transition fully to sole reliance on experience-based methods can vary, depending on our assessment of the stability and relevance of such indications. For some professional lines in our insurance segment, we also rely upon the evaluation of the open claim inventory in addition to the commonly employed actuarial methods when establishing reserves.

Insurance Professional Lines
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	221,212	$	247,155	$	249,780	$	248,741	$	221,708	$	217,901	$	201,294	$	202,636	$	197,765	$	196,562	$	4,683	3,596
2008			240,809		279,486		280,329		299,422		295,953		309,268		328,628		326,623		324,197		23,024		4,582
2009					251,995		257,354		258,134		256,731		263,157		245,939		247,495		223,700		14,856		6,148
2010							251,985		257,527		255,337		218,436		195,831		173,104		195,869		44,799		5,975
2011									341,302		342,063		359,448		348,860		355,008		368,830		69,175		7,633
2012											353,693		399,610		401,976		408,870		397,517		108,180		8,805
2013													410,537		425,400		430,517		398,776		161,370		9,835
2014															435,447		443,665		451,917		244,910		10,017
2015																	401,941		401,660		277,836		10,178
2016																			348,076		312,698		8,935
																	Total		$	3,307,104

Insurance Professional Lines
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	3,817	$	18,301	$	49,258	$	102,031	$	114,021	$	139,144	$	150,649	$	161,153	$	168,368	$	169,572
2008			5,154		22,565		68,355		125,594		167,923		189,952		214,542		249,050		267,314
2009					4,251		24,559		49,396		76,121		105,510		117,174		136,271		174,032
2010							8,179		30,353		57,282		78,663		96,431		109,403		119,939
2011									8,470		36,396		78,605		117,097		177,629		250,219
2012											8,895		44,804		106,822		194,031		240,671
2013													18,305		75,901		136,542		182,468
2014															25,351		73,828		132,966
2015																	20,745		68,050
2016																			15,707
Total																			1,620,938
All outstanding liabilities before 2007, net of reinsurance																			31,393
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,717,559

Insurance Professional Lines
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
3.4%	9.6%	13.7%	15.9%	11.6%	10.2%	6.9%	10.9%	4.7%	0.6%

Insurance Liability

This reserve class comprises our liability line of business and primarily targets primary and low/mid-level excess and umbrella commercial liability risks in the U.S. wholesale markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services. The delay between the writing of a contract, notification and subsequent settlement of a claim in respect of that contract results in claim payment and reporting patterns that are typically long tail in nature. A consequence of the claim development tail is that this line of business is particularly exposed, amongst a number of uncertainties, to the potential for unanticipated levels of claim inflation relative to that assumed when the contracts were written. Factors influencing claim inflation on this class can include, but are not limited to, underlying economic and medical inflation, judicial inflation, mass tort and changing social trends.

Insurance Liability
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	100,380	$	88,102	$	95,435	$	98,625	$	98,851	$	99,483	$	102,010	$	101,299	$	97,526	$	97,078	$	12,107	3,766
2008			82,969		79,836		80,947		81,785		82,225		81,949		101,589		102,444		108,189		20,340		3,697
2009					61,469		64,017		67,410		67,869		76,431		83,281		101,179		98,384		11,813		2,735
2010							79,406		94,222		98,637		98,115		99,574		98,064		105,123		15,988		2,196
2011									72,586		75,329		83,118		87,059		85,243		83,730		20,189		1,776
2012											70,836		70,608		73,280		70,769		68,179		23,448		1,215
2013													92,146		94,171		94,247		87,491		36,011		1,494
2014															106,121		122,583		128,465		55,811		2,240
2015																	127,318		125,844		83,145		2,970
2016																			123,233		107,850		3,099
																	Total		$	1,025,716

Insurance Liability
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	436	$	5,968	$	22,206	$	40,853	$	52,660	$	60,080	$	69,335	$	76,411	$	80,150	$	82,449
2008			1,906		8,796		18,507		27,861		37,408		47,447		51,776		55,314		61,618
2009					726		4,646		13,305		26,754		31,865		41,322		44,105		83,991
2010							1,030		15,968		30,791		53,584		61,033		66,118		71,792
2011									2,761		10,540		20,190		38,376		46,074		54,996
2012											1,630		5,513		15,410		30,144		37,138
2013													2,355		23,275		33,314		42,044
2014															1,410		18,620		49,816
2015																	5,437		22,323
2016																			6,307
Total																			512,474
All outstanding liabilities before 2007, net of reinsurance																			39,713
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	552,955

Insurance Liability
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
2.3%	10.7%	13.8%	16.6%	8.8%	8.4%	5.4%	17.0%	4.9%	2.4%

Reinsurance Segment

The main difficulty in presenting accident year triangles for the Reinsurance segment relates to the allocation of loss information on proportional treaties to the appropriate accident years. As an example, many proportional treaty reinsurance contracts are submitted using quarterly bordereau reporting by underwriting year, with a supplemental listing of large losses. The large losses can be accurately allocated to the corresponding accident years. However, the remaining losses can generally only be allocated to accident years based on estimated premium earning and loss reporting patterns. To the extent management’s assumptions and allocation procedures differ from the actual loss development patterns, the actual loss development may differ materially from the loss development presented below.

The reporting of cumulative claims frequency for the reserve classes within our Reinsurance segment is deemed to be impracticable. The information necessary to provide cumulative claims frequency for these reserve classes is not available to the Company.

Reinsurance Property and Other

This reserve class comprises our property, catastrophe, engineering, agriculture and marine and other lines of business. Our catastrophe line of business provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our cedants. The exposure in the underlying policies is principally property exposure but also covers other exposures including workers compensation, personal accident and life. The principal perils in this portfolio are hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. We underwrite catastrophe reinsurance principally on an excess of loss basis. Our property line of business provides coverage for property damage and related losses resulting from natural and man-made perils contained in underlying personal and commercial policies. While our predominant exposure is to property damage, other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. While our most significant exposures typically relate to losses from windstorms, tornadoes and earthquakes, we are also exposed to other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events. We assume business on both a proportional and excess of loss basis.

Our agriculture line of business provides coverage for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. We provide both proportional and aggregate stop loss reinsurance. Our engineering line of business provides coverage for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes coverage for losses arising from operational failures of machinery, plant and equipment and electronic equipment as well as business interruption. Our marine and other line of business includes marine, aviation and personal accident reinsurance.

In general, paid and reporting patterns are relatively short-tailed and can be volatile due to the incidence of catastrophe events such as hurricanes and earthquakes.

Reinsurance Property and Other
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	394,054	$	321,110	$	279,571	$	265,204	$	249,436	$	238,779	$	231,597	$	224,023	$	220,937	$	220,469	$	379
2008			671,079		569,031		584,076		562,028		547,586		536,555		520,174		513,948		512,261		(296		)
2009					337,333		279,833		241,346		227,777		220,889		199,777		193,703		195,545		705
2010							599,084		584,912		553,798		567,341		569,697		563,532		555,647		7,034
2011									1,083,060		1,092,015		1,090,593		1,049,625		1,032,549		1,006,528		10,715
2012											484,438		450,563		440,303		409,836		393,775		10,707
2013													466,295		441,492		411,440		392,459		10,724
2014															437,470		455,607		442,330		53,805
2015																	380,660		359,185		69,223
2016																			440,384		224,911
																	Total		$	4,518,583

Reinsurance Property and Other
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	58,955	$	159,438	$	189,166	$	203,754	$	211,499	$	215,294	$	219,809	$	217,756	$	215,894	$	217,366
2008			157,415		312,580		437,973		489,821		502,377		506,139		505,939		510,628		509,433
2009					55,694		126,587		156,617		174,250		184,513		183,729		186,448		188,103
2010							104,263		296,764		388,310		419,571		465,358		494,362		519,128
2011									246,222		557,409		759,930		859,089		888,222		961,477
2012											92,620		228,876		300,983		322,801		337,115
2013													54,451		218,110		328,765		355,706
2014															65,721		271,621		346,856
2015																	48,121		187,229
2016																			77,205
Total																			3,699,618
All outstanding liabilities before 2007, net of reinsurance																			4,498
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	823,463

Reinsurance Property and Other
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
21.2%	37.7%	19.2%	7.7%	4.3%	2.9%	2.0%	0.3%	(0.5)%	0.7%

Reinsurance Credit and Surety

This reserve class is comprised of our credit and surety line of business and consists of reinsurance of trade credit insurance products and includes both proportional and excess of loss structures. The underlying insurance indemnifies sellers of goods and services in the event of a payment default by the buyer of those goods and services. The Company provides credit insurance coverage to mortgage guaranty insurers and government sponsored entities. Also included in this line of business is coverage for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligations in a variety of jurisdictions around the world.

Our initial and most recent underwriting year loss projections are generally based on the ELR method, with consideration given to qualitative factors. Given that there is a quicker and more stable reporting pattern for trade credit business, we generally commence the transition to experience-based methods sooner than for the surety business.

Reinsurance Credit and Surety
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	48,646	$	53,197	$	44,789	$	40,395	$	39,015	$	39,584	$	45,853	$	53,938	$	52,838	$	53,775	$	915
2008			79,689		102,595		92,784		92,151		93,339		92,118		88,619		87,638		87,130		1,456
2009					137,963		117,004		100,943		100,177		99,872		94,541		91,346		90,893		2,968
2010							112,888		92,842		86,340		83,888		79,568		72,316		71,016		6,397
2011									117,902		101,752		99,640		106,196		104,414		96,269		9,658
2012											155,730		142,870		145,147		142,639		134,620		19,094
2013													161,647		148,760		139,761		136,024		23,760
2014															132,483		131,887		139,026		34,983
2015																	156,959		161,178		46,635
2016																			138,876		72,455
																	Total		$	1,108,807

Reinsurance Credit and Surety
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	13,612	$	24,105	$	28,797	$	33,178	$	34,476	$	35,328	$	36,580	$	46,356	$	46,734	$	47,496
2008			20,345		63,686		61,530		75,801		77,425		79,414		81,152		81,790		82,026
2009					31,892		73,878		74,948		76,863		80,635		83,281		83,338		83,185
2010							25,558		44,156		54,023		54,849		56,304		57,263		58,579
2011									22,198		50,959		66,120		73,282		77,734		79,807
2012											48,576		82,707		95,544		101,328		104,802
2013													32,113		74,740		88,904		95,282
2014															35,261		59,406		83,536
2015																	32,757		79,523
2016																			41,768
Total																			756,004
All outstanding liabilities before 2007, net of reinsurance																			3,865
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	356,668

Reinsurance Credit and Surety
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
27.8%	30.5%	9.3%	6.3%	2.9%	2.1%	1.6%	6.2%	0.5%	1.4%

Reinsurance Professional Lines

This reserve class is comprised of our professional line of business and covers directors' and officers' liability, employment practices liability, medical malpractice, professional indemnity, environmental liability and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. Business is written on both a proportional and excess of loss basis. Claim payment and reporting patterns on an accident year basis are typically medium to long tail in nature.

With respect to our key actuarial assumptions, we are progressively giving more weight to our own experience when establishing our expected loss ratios and our selected loss development patterns, though we continue to consider industry benchmarks. Loss reporting patterns for professional lines business tend to be volatile, causing instability in actuarial indications based on incurred loss data until an accident year matures for a number of years. Consequently, our initial loss reserves for an accident year or underwriting year are generally based upon an ELR method and the consideration of relevant qualitative factors. As accident and underwriting years mature, we increasingly give more weight to methods that reflect our actual experience until our selections are based almost exclusively on experience-based methods. We evaluate the appropriateness of the transition to experience-based methods at the reserving class level, commencing this transition when we believe that our incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which we transition fully to sole reliance on experience-based methods can vary, depending on our assessment of the stability and relevance of such indications.

Reinsurance Professional Lines
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	195,045	$	204,971	$	204,594	$	196,696	$	176,792	$	151,628	$	137,392	$	118,321	$	114,714	$	111,256	$	8,173
2008			174,881		181,729		181,097		177,038		175,203		171,409		172,414		170,509		170,596		14,293
2009					210,606		210,413		215,065		217,656		208,234		207,939		192,974		189,290		21,035
2010							208,718		209,034		210,413		213,560		213,316		196,067		188,729		42,307
2011									200,400		200,776		201,989		210,770		208,126		207,237		75,492
2012											209,109		215,586		221,036		223,023		221,722		94,535
2013													208,804		213,810		214,659		212,763		114,919
2014															218,734		218,662		218,610		120,754
2015																	211,420		211,181		163,900
2016																			194,558		183,486
																	Total		$	1,925,942

Reinsurance Professional Lines
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	56	$	4,133	$	21,286	$	34,567	$	54,438	$	60,188	$	70,636	$	73,941	$	82,406	$	86,573
2008			373		6,411		21,620		49,053		70,329		91,554		108,226		123,672		132,194
2009					914		8,588		32,286		62,988		83,537		108,140		127,697		137,842
2010							1,740		12,000		31,198		52,066		76,635		107,096		123,711
2011									1,510		11,812		30,216		57,119		84,672		102,813
2012											776		10,346		29,527		53,440		85,753
2013													1,059		12,020		30,403		64,809
2014															2,019		13,049		48,714
2015																	3,134		13,503
2016																			1,755
Total																			797,667
All outstanding liabilities before 2007, net of reinsurance																			26,189
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,154,464

Reinsurance Professional Lines
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
0.7%	4.6%	11.2%	13.6%	13.7%	11.1%	9.6%	5.8%	6.3%	3.7%

Reinsurance Motor

This reserving class is comprised of our motor line of business and provides coverage to insurers for motor liability and property damage losses arising out of any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. We offer traditional proportional and non-proportional reinsurance as well as structured solutions predominantly relating to European exposures. The business written on a proportional basis has expanded significantly since 2010 and now represents the majority of the written premium on this class. Most of the premium relates to a relatively small number of large United Kingdom ("U.K.") and, to a lesser extent, Greek quota share treaties. The motor proportional class generally has significantly shorter paid and reported loss development patterns relative to the motor non-proportional class.

The motor non-proportional business consists of standard excess of loss contracts written for cedants in several European countries with the two major markets, U.K. and France, generally accounting for the majority of the premium volume. From 2009/2010 onwards increasing numbers of large bodily injury settlements in the U.K. market were settled using indexed annuities (Periodical Payment Orders "PPOs"). This led to a materially longer development tail on the older accident years for the U.K. non-proportional motor book. This also resulted in a move towards generally lower treaty attachment points and the inclusion of capitalization clauses on a number of U.K. motor treaties partly helping to mitigate the lengthening of the development tail on more recent accident years. Despite the trend toward a greater number of claims settlements using PPOs, we note that there has been a trend towards generally quicker and more adequate reporting of losses in recent years.

Reinsurance Motor
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	65,601	$	66,567	$	62,829	$	62,768	$	63,813	$	60,568	$	59,548	$	58,086	$	55,279	$	54,504	$	14,117
2008			64,513		69,234		68,617		70,961		68,486		67,783		63,627		58,250		54,678		18,178
2009					77,092		75,034		82,170		83,944		85,870		87,017		78,929		73,670		17,780
2010							92,168		97,598		97,823		96,811		91,248		86,409		77,560		27,778
2011									149,535		151,432		155,096		160,516		156,912		148,843		44,483
2012											170,379		159,822		149,420		142,454		137,841		37,418
2013													155,880		150,277		139,138		130,299		30,902
2014															175,848		173,568		168,846		33,650
2015																	215,342		207,409		49,375
2016																			238,258		100,635
																	Total		$	1,291,908

Reinsurance Motor
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	1,663	$	3,881	$	4,150	$	6,127	$	9,939	$	11,616	$	13,710	$	18,527	$	20,433	$	21,596
2008			2,741		5,612		5,827		6,984		8,438		10,788		13,366		13,975		15,452
2009					2,533		6,343		7,346		8,761		12,037		17,973		20,167		24,535
2010							5,138		9,299		13,939		17,068		19,972		23,957		27,017
2011									23,397		45,270		58,841		68,802		74,955		80,593
2012											28,703		50,904		64,918		74,063		80,182
2013													33,173		50,230		62,830		72,085
2014															42,546		70,547		88,652
2015																	56,940		89,516
2016																			59,989
Total																			559,617
All outstanding liabilities before 2007, net of reinsurance																			78,865
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	811,156

Reinsurance Motor
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
15.8%	10.7%	6.0%	4.6%	4.4%	4.9%	3.9%	5.3%	3.1%	2.1%

Reinsurance Liability

This reserve class is comprised of our liability line of business and provides coverage to insurers of standard casualty business, excess and surplus casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, although workers' compensation and auto liability are also written. Claim payment and reporting patterns are typically long tail in nature and, therefore, also subject to increased uncertainty surrounding future loss development. In particular, claims can be subject to inflation from a number of sources including, but not limited to, economic and medical inflation, judicial inflation and changing social trends.

Reinsurance Liability
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																				At December 31, 2016
	For the Years Ended December 31,																				Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	160,455	$	157,947	$	158,773	$	157,966	$	157,886	$	157,822	$	144,241	$	114,939	$	97,515	$	92,712	$	11,940
2008			137,646		137,932		138,926		139,592		137,793		132,317		110,545		105,286		94,589		20,513
2009					169,886		171,868		179,239		176,853		184,378		203,553		191,701		177,852		34,578
2010							169,442		168,929		180,949		181,663		199,656		189,531		180,860		53,863
2011									170,182		170,606		172,708		190,043		196,805		193,749		45,166
2012											165,409		162,127		166,492		171,033		172,176		55,572
2013													171,121		174,885		180,802		182,813		83,598
2014															198,634		201,551		203,252		124,579
2015																	213,387		213,776		157,257
2016																			238,524		199,828
																	Total		$	1,750,303

Reinsurance Liability
	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007 Unaudited		2008 Unaudited		2009 Unaudited		2010 Unaudited		2011 Unaudited		2012 Unaudited		2013 Unaudited		2014 Unaudited		2015 Unaudited		2016
2007	$	2,556	$	10,663	$	22,833	$	32,641	$	42,081	$	54,374	$	59,966	$	65,026	$	66,791	$	70,221
2008			2,156		9,940		21,917		29,991		36,497		43,397		51,786		53,578		57,686
2009					1,703		17,100		44,429		56,586		73,197		103,871		123,051		127,354
2010							2,405		17,576		46,123		62,207		83,542		97,167		108,476
2011									5,190		21,274		39,983		69,886		92,221		112,066
2012											3,540		12,791		28,354		58,639		78,037
2013													5,965		22,214		52,299		69,021
2014															7,086		28,645		48,363
2015																	7,267		27,440
2016																			11,859
Total																			710,523
All outstanding liabilities before 2007, net of reinsurance																			28,494
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,068,274

Reinsurance Liability
Average annual percentage payout of incurred claims by age, net of reinsurance
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
2.7%	8.5%	12.7%	11.0%	10.2%	11.1%	8.0%	3.3%	3.1%	3.7%

Reconciliation of Development Tables to Consolidated Balance Sheet

The following table reconciles the reserves for loss and loss expenses as of December 31, 2016 as reported in our Consolidated Balance Sheet to the reserves for loss and loss expenses included in the development tables:

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses
	At December 31, 2016
	Net outstanding liabilities		Reinsurance recoverable on unpaid claims		Gross outstanding liabilities
Insurance Segment
Property and Other	$	582,637	$	169,707	$	752,344
Marine	253,308		180,996		434,304
Aviation	54,550		6,384		60,934
Credit and Political Risk	51,637		154		51,791
Professional Lines	1,717,559		998,873		2,716,432
Liability	552,955		837,215		1,390,170
Total Insurance Segment	3,212,646		2,193,329		5,405,975
Reinsurance Segment
Property and Other	823,463		55,637		879,100
Credit and Surety	356,668		1,916		358,584
Professional Lines	1,154,464		8,353		1,162,817
Motor	811,156		—		811,156
Liability	1,068,274		16,874		1,085,148
Total Reinsurance Segment	4,214,025		82,780		4,296,805
Total	$	7,426,671	$	2,276,109	9,702,780
Unallocated claims adjustment expenses					144,375
Foreign exchange and other(1)					(59,988		)
(Ceded)/assumed reserves related to retroactive transactions					(89,340		)
Total liability for unpaid claims and claims adjustment expense					$	9,697,827

(1) Non-U.S. dollar denominated loss data is converted to U.S dollar at the rates of exchange in effect at the balance sheetdate for material underlying currencies. Fluctuations in currency exchange rates cause material shifts in loss development. Reserves for losses and loss expenses, disclosed on our consolidated balance sheets, are also revalued using the exchange rate at the balance sheet date.