RESERVE FOR LOSSES AND LOSS EXPENSES

12 Months Ended

Dec. 31, 2021

Insurance Loss Reserves [Abstract]

RESERVE FOR LOSSES AND LOSS EXPENSES

Reserving Methodology

Sources of Information

The Company's loss reserving process begins with the collection and analysis of paid and incurred claim data for each of the Company's segments. The segmental data is disaggregated by reserve class and further disaggregated by underwriting year and accident year. Underwriting year or accident year information is used to analyze the Company's business and to estimate reserves for losses and loss expenses. Reserve 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. The Company's reserve classes are reviewed on a regular basis and adjusted over time as the Company's business evolves. The paid and incurred claim data serves as a key input to many of the methods employed by the Company's actuaries.

The following tables map the Company's lines of business to reserve classes and the expected claim tails:

Insurance segment
	Reserve class and tail
	Property and other	Marine	Aviation	Credit and political risk	Professional lines	Liability
	Short	Short	Short/Medium	Medium	Medium	Long
Reported lines of business
Property	X
Marine		X
Terrorism	X
Aviation			X
Credit and political risk				X
Professional lines					X
Liability						X
Accident and health	X
Discontinued lines - Novae	X				X	X

Reinsurance segment
	Reserve class and tail
	Property and other	Credit and surety	Professional lines	Motor	Liability
	Short	Medium	Medium	Long	Long
Reported lines of business
Catastrophe	X
Property	X
Credit and surety		X
Professional lines			X
Motor				X
Liability					X
Engineering	X
Agriculture	X
Marine and aviation	X
Accident and health	X
Discontinued lines - Novae	X			X	X

Actuarial Analysis

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 reserve 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 the Company's actuaries including a discussion of their particular strengths and weaknesses: 

•Expected Loss Ratio Method ("ELR Method"): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio ("ELR") 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, loss and exposure trends, 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 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, among 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 responsive 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 the loss reserving process, the Company's 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 reserve 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 ultimate loss estimates for previous accident or underwriting years, 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, initial estimates for an accident or underwriting year are generally based on the ELR Method for longer tailed lines and a BF Method for shorter tailed lines. The initial ELR for each reserve class is established by the Company's actuaries 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 loss and 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.

Key Actuarial Assumptions

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

The Company relies on historical loss experience in establishing expected loss ratios and selecting loss development patterns. In establishing expected loss ratios for the insurance segment, consideration is given to a number of other factors, including exposure trends, rate adequacy on new and renewal business, ceded reinsurance costs, changes in claims emergence and the Company's underwriters’ view of terms and conditions in the market environment. For the reinsurance segment, expected loss ratios are based on a contract-by-contract review, which considers information provided by clients together with estimates provided by the Company's underwriters and actuaries about the impact of changes in pricing, terms and conditions and coverage. Market experience for some lines of business as compiled and analyzed by an independent actuarial firm is also considered, as appropriate.

Claim Tail Analysis

Short-tail Business

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. Short-tail business includes the underlying exposures in the property and other, marine, and aviation (hull and war business) reserve classes in the insurance segment, and the underlying exposures in the property and other reserve class in the reinsurance segment.

The key actuarial assumptions for short-tail business are primarily developed with reference to the Company's historical loss experience for expected loss ratios and loss development patterns utilized to establish estimates of ultimate losses for an accident year. Due to the relatively short reporting and settlement patterns for short-tail business, more weight is generally placed on experience-based methods and other qualitative considerations in establishing reserves for recent and more mature accident years.

The majority of development for an accident year or underwriting year is expected to be recognized in the subsequent one to three years.

Medium-tail Business

Medium-tail business generally has claim reporting and settlement periods that are longer than those of short-tail reserve classes. Medium-tail business includes the underlying exposures in the professional lines, credit and political risk and aviation (liability business) reserve classes in the insurance segment, and the credit and surety reserve class in the reinsurance segment. The Company considers credit and political risk business to have a medium-tail, due to the complex nature of claims and the potential additional time that may be required to realize subrogation assets.

Refer to 'Net incurred and Paid Claims Development Tables by Accident Year – Insurance segment – Insurance Professional Lines', 'Net incurred and Paid Claims Development Tables by Accident Year – Reinsurance segment – Reinsurance Professional Lines', 'Net incurred and Paid Claims Development Tables by Accident Year – Insurance segment – Insurance Credit and Political Risk' and Net incurred and Paid Claims Development Tables by Accident Year – Reinsurance segment – Reinsurance Credit and Surety' for further details on key actuarial assumptions associated with these reserve classes.

Long-tail Business

In contrast to short and medium-tail business, the claim tail for long-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. Long-tail business includes the underlying exposures in the liability reserve class in the insurance segment and the liability and motor reserve classes in the reinsurance segment.

As a general rule, estimates of accident year or underwriting year ultimate losses for long-tail business are notably more uncertain than those for short and medium-tail business. To date, key actuarial assumptions for long-tail business have been derived from a combination of industry benchmarks supplemented with Company historical loss experience. While industry benchmarks that the Company believes reflect the nature and coverage of its business are considered, actual loss experience may differ from the benchmarks based on industry averages. Due to the length of the development tail for this business, reserve estimates for most accident years and underwriting years are predominantly based on the BF Method or ELR Method and the consideration of qualitative factors.

Reserving for Significant Catastrophic Events

The Company cannot estimate losses from widespread catastrophic events, such as hurricanes and earthquakes, using the traditional actuarial methods described above. The magnitude and complexity of losses associated with certain of these events inherently increase the level of uncertainty and, therefore, the level of management judgment involved in arriving at estimated net reserves for losses and loss expenses. As a result, actual losses for these events may ultimately differ materially from current estimates.

Net reserves for losses and loss expenses related to the COVID-19 pandemic represents the Company's best estimate of losses and loss expenses that have been incurred at December 31, 2021. The determination of these net reserves for losses and loss expenses was based on the Company's ground-up assessment of coverage from individual contracts and treaties across all lines of business, and included a review of modeling analyses and market information, where appropriate. In addition, the Company considered information received from clients, brokers and loss adjusters together with global shelter-in-place orders and the outcomes of recent court judgments, including the UK Supreme Court ruling on January 15, 2021.

The estimate of net reserves for losses and loss expenses related to the COVID-19 pandemic is subject to significant uncertainty. This uncertainty is driven by the inherent difficulty in making assumptions around the impact of the COVID-19 pandemic due to the lack of comparable events, the ongoing nature of the event, and its far-reaching impacts on world-wide economies and the health of the population. These assumptions include:

•the nature and the duration of the pandemic;

•the effects on health, the economy and the Company's customers;

•the response of government bodies including legislative, regulatory or judicial actions and social influences that could alter the interpretation of the Company's contracts;

•the coverage provided under the Company's contracts;

•the coverage provided by the Company's ceded reinsurance; and

•the evaluation of the loss and impact of loss mitigation actions.

While the Company believes its estimate of net reserves for losses and loss expenses is adequate for losses and loss expenses that have been incurred at December 31, 2021 based on current facts and circumstances, the Company continues to monitor the appropriateness of these assumptions as new information comes to light, and adjustments are made to the estimate of ultimate losses related to the COVID-19 pandemic if there are developments that are different from previous expectations. Adjustments are recorded in the period in which they are identified. Actual losses for this event may ultimately differ materially from the Company's current estimates.

Net reserves for losses and loss expenses related to catastrophes other than the COVID-19 pandemic represent the Company's best estimate of losses and loss expenses that have been incurred at December 31, 2021. The determination of these net reserves for losses and loss expenses is estimated by management after a catastrophe occurs by completing an in-depth analysis of individual contracts which may potentially have been impacted by the catastrophic event. This in-depth analysis may rely on several sources of information including:

•estimates of the size of insured industry losses from the catastrophic event and the Company's corresponding market share;

•a review of the Company's portfolio of contracts to identify those contracts which may be exposed to the catastrophic event;

•a review of modeled loss estimates based on information previously reported by customers and brokers, including exposure data obtained during the underwriting process;

•discussions of the impact of the event with customers and brokers; and

•catastrophe bulletins published by various independent statistical reporting agencies.

A blend of these information sources is generally used to arrive at aggregate estimates of the ultimate losses arising from these catastrophic events.

While the Company believes its estimate of net reserves for losses and loss expenses is adequate for losses and loss expenses that have been incurred at December 31, 2021 based on current facts and circumstances, the Company monitors changes in paid and incurred losses in relation to each significant catastrophe in subsequent reporting periods and adjustments are made to estimates of ultimate losses for each event if there are developments that are different from previous expectations. Adjustments are recorded in the period in which they are identified. Actual losses for these events may ultimately differ materially from the Company's current estimates.

Selection of Reported Reserves – Management’s Best Estimate

The Company's loss reserving process involves the collaboration of its underwriting, claims, actuarial, legal, ceded reinsurance and finance departments, including various segmental committee meetings and culminates with the approval of a single point best estimate by the Company's 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 Company 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

Reserve for losses and loss expenses comprise the following:

At December 31,	2021		2020
Reserve for reported losses and loss expenses	$	5,539,971	$	5,331,900
Reserve for losses incurred but not reported	9,113,123		8,594,866
Reserve for losses and loss expenses	$	14,653,094	$	13,926,766

Reserve Roll-forward

The following table presents a reconciliation of the Company's beginning and ending gross reserves for losses and loss expenses and net reserves for unpaid losses and loss expenses:

Year ended December 31,	2021		2020		2019
Gross reserve for losses and loss expenses, beginning of year	$	13,926,766	$	12,752,081	$	12,280,769
Less reinsurance recoverable on unpaid losses, beginning of year	(4,496,641)		(3,877,756)		(3,501,669)
Net reserve for unpaid losses and loss expenses, beginning of year	9,430,125		8,874,325		8,779,100
Net incurred losses and loss expenses related to:
Current year	3,041,193		3,297,161		3,123,698
Prior years	(32,410)		(15,909)		(78,900)
	3,008,783		3,281,252		3,044,798
Net paid losses and loss expenses related to:
Current year	(490,011)		(571,442)		(598,988)
Prior years	(2,274,240)		(2,365,959)		(2,371,637)
	(2,764,251)		(2,937,401)		(2,970,625)
Foreign exchange and other	(39,174)		211,949		21,052
Net reserve for unpaid losses and loss expenses, end of year	9,635,483		9,430,125		8,874,325
Reinsurance recoverable on unpaid losses, end of year	5,017,611		4,496,641		3,877,756
Gross reserve for losses and loss expenses, end of year	$	14,653,094	$	13,926,766	$	12,752,081

The Company writes business with loss experience generally characterized as low frequency and high severity in nature, which can result in volatility in its financial results. During 2021, 2020 and 2019, the Company recognized catastrophe and weather-related losses, net of reinstatement premiums, of $443 million, $774 million and $336 million.

At December 31, 2021, foreign exchange and other included a reduction in reinsurance recoverable on unpaid losses of $49 million related to the Reinsurance to Close of the 2018 year of account of Syndicate 2007.

On December 15, 2019, the Company entered into a quota share retrocessional agreement with Harrington Re, a related party, which was deemed to have met the established criteria for retroactive reinsurance accounting. The Company recognized reinsurance recoverable on unpaid losses of $59 million related to this reinsurance agreement. This transaction was conducted at market rates consistent with negotiated arms-length contracts.

Estimates for Significant Catastrophe Events

At December 31, 2021, net reserve for losses and loss expenses included estimated amounts for numerous catastrophe events. The magnitude and complexity of losses arising from certain of these events inherently increase the level of uncertainty and, therefore, the level of management judgment involved in arriving at estimated net reserves for losses and loss expenses. These events include Hurricane Ida, U.S. Winter Storms Uri and Viola, and July European Floods in 2021, the COVID-19 pandemic, Hurricanes Laura, Sally, Zeta and Delta, Midwest derecho and wildfires across the West Coast of the United States in 2020, Japanese Typhoons Hagibis, Faxai and Tapah, Hurricane Dorian and Australia Wildfires in 2019 and Hurricanes Michael and Florence, California Wildfires and Typhoon Jebi in 2018. As a result, actual losses for these events may ultimately differ materially from current estimates.

Prior Year Reserve Development

The Company's net favorable prior year reserve development arises from changes to estimates for losses and loss expenses related to loss events that occurred in previous calendar years. The following table presents net prior year reserve development by segment:

	Favorable (Adverse)
	Insurance		Reinsurance		Total
Year ended December 31, 2021	$	18,360	$	14,049	$	32,410
Year ended December 31, 2020	8,937		6,972		15,909
Year ended December 31, 2019	53,302		25,598		78,900

The following sections provide further details on net prior year reserve development by segment, reserving class and accident year.

Insurance Segment:

	Favorable (Adverse)
Years ended December 31,	2021		2020		2019
Property and other	$	86,876	$	46,791	$	11,042
Marine	28,430		16,780		33,260
Aviation	14,106		6,416		3,741
Credit and political risk	10,363		(745)		18,810
Professional lines	(78,588)		(35,661)		11,721
Liability	(42,827)		(24,644)		(25,272)
Total	$	18,360	$	8,937	$	53,302

In 2021, we recognized $18 million of net favorable prior year reserve development, the principal components of which were:

•$87 million of net favorable prior year reserve development on property and other business primarily due to decreases in loss estimates attributable to specific large claims related to the 2011 and 2012 accident years, and better than expected loss emergence attributable to the 2018 to 2020 catastrophe events, the global property book of business related to 2017 to 2019 accident years, and the accident and health book of business related to the 2019 and 2020 accident years.

•$28 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence attributable to cargo, offshore energy and specie books of business mainly related to the 2017, 2018 and 2020 accident years and decreases in loss estimates attributable to specific large claims related to 2012 accident year.

•$14 million of net favorable prior year reserve development on aviation business primarily due to better than expected loss emergence mainly related to the 2020 accident year.

•$10 million of net favorable prior year reserve development on credit and political risk business primarily due to better than expected loss emergence mainly related to the 2018 and 2019 accident years.

•$79 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within runoff lines of business mainly related to the 2016 to 2019 accident years, the U.S. commercial management solutions book of business mainly related to the 2017 and 2019 accident years and the global cyber and technology book of business mainly related to the 2019 accident year.

•$43 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the program book of business mainly related to the 2018 and 2019 accident years.

In 2020, we recognized $9 million of net favorable prior year reserve development, the principal components of which were:

•$47 million of net favorable prior year reserve development on property and other business primarily due to better than expected loss emergence mainly related to the 2018 and 2019 accident years, and better than expected loss emergence attributable to the 2017 to 2019 catastrophe events.

•$17 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence mainly related to the 2018 accident year.

•$36 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the European professional indemnity and financial institutions books of business and the U.S. commercial management solutions book of business mainly related to the 2018 and 2019 accident years and an increase in the loss estimate attributable to a specific large claim related to the 2009 accident year.

•$25 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the primary casualty, U.S. excess casualty and program books of business mainly related to the 2017 and 2018 accident years.

In 2019, we recognized $53 million of net favorable prior year reserve development, the principal components of which were:

•$33 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence mainly related to the 2015 to 2017 accident years.

•$19 million of net favorable prior year reserve development on credit and political risk business primarily due to better than expected loss emergence mainly related to recent accident years.

•$12 million of net favorable prior year reserve development on professional lines business reflecting generally favorable experience on older accident years as the Company continued to transition to more experience based actuarial methods.

•$11 million of net favorable prior year reserve development on property and other business primarily due to better than expected loss emergence related to the 2017 catastrophe events and SuperStorm Sandy, partially offset by reserve strengthening within the International book of business mainly related to the 2018 accident year.

•$25 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the U.S. excess casualty and U.S. primary casualty books of business mainly driven by the higher frequency and severity of auto claims and the higher frequency of general liability claims mainly related to the 2015 and 2017 accident years.

Reinsurance Segment:

	Favorable (Adverse)
Years ended December 31,	2021		2020		2019
Property and other	$	8,282	$	(5,935)	$	(133,448)
Credit and surety	3,436		36,829		53,223
Professional lines	(23,718)		(15,352)		3,668
Motor	43,968		21,086		70,872
Liability	(17,919)		(29,656)		31,283
Total	$	14,049	$	6,972	$	25,598

In 2021, we recognized $14 million of net favorable prior year reserve development, the principal components of which were:

•$44 million of net favorable prior year reserve development on motor business primarily due to proportional and non-proportional treaty business mainly related to 2016 and older accident years.

•$8 million of net favorable prior year reserve development on property and other business primarily due to decreases in loss estimates attributable to specific large claims within the property and engineering lines of business related to the 2018 accident year, decreases in the loss estimates attributable to specific large claims within the property line of business related to the 2009, 2017 and 2019 accident years, better than expected loss emergence attributable to the 2017 to 2019 catastrophe events, and to the accident and health book of business mainly related to the 2019 and 2020 accident years, partially offset by reserve strengthening attributable to the 2020 catastrophe events and within the engineering line of business mainly related to the 2016, 2017 and 2019 accident years.

•$24 million of net adverse prior year reserve development on professional lines business primarily due to reserve strengthening within the U.S. and European books of business related to the 2015 to 2018 accident years and increases in the loss estimates attributable to specific large claims related to the 2015 to 2017 accident years.

•$18 million of net adverse prior year reserve development on liability business primarily due to increases in loss estimates attributable to specific large claims related to the 2017 and 2018 accident years and reserve strengthening within the commercial auto liability and U.S. multiline/regional books of business related to the 2018 accident year.

In 2020, we recognized $7 million of net favorable prior year reserve development, the principal components of which were:

•$37 million of net favorable prior year reserve development on credit and surety business primarily due to better than expected loss emergence related to several accident years.

•$21 million of net favorable prior year reserve development on motor business primarily due to non-proportional treaty business mainly related to older accident years, partially offset by increases in loss estimates for proportional treaty business mainly related to the 2018 accident year.

•$30 million of net adverse prior year reserve development on liability business due to reserve strengthening within the U.S. casualty, the U.S. multiline/regional and the European books of business mainly related to the 2016 to 2019 accident years and an increase in the loss estimate attributable to a specific large claim related to the 2009 accident year.

•$15 million of net adverse prior year reserve development on professional lines business due to an increase in the loss estimate attributable to a specific large claim related to the 2016 accident year and reserve strengthening within the European book of business mainly related to the 2016 to 2018 accident years.

•$6 million of net adverse prior year reserve development on property and other business primarily due to an increase in the loss estimate attributable to a specific large claim within the marine and aviation line of business related to the 2019 accident year, reserve strengthening within the engineering line of business mainly related to the 2016 to 2018 accident years, partially offset by net favorable prior year reserve development within the property line of business due to better than expected loss emergence attributable to the 2019 catastrophe events.

In 2019, we recognized $26 million of net favorable prior year reserve development, the principal components of which were:

•$71 million of net favorable prior year reserve development on motor business primarily due to the impact of the increase in the Ogden Rate and changes in related actuarial assumptions on several accident years.

•$53 million of net favorable prior year reserve development on credit and surety business primarily due to better than expected loss emergence mainly related to accident years 2015 to 2017.

•$31 million of net favorable prior year reserve development on liability business primarily due to increased weight given by management to experience based indications on older accident years.

•$133 million of net adverse prior year reserve development on property and other business primarily due to an increase in loss estimates attributable to Hurricanes Irma and Michael consistent with industry trends, an increase in the loss estimate attributable to Typhoon Jebi consistent with updated industry insured loss estimates, and reserve strengthening within the U.S. regional and commercial proportional property books of business and the European proportional property book of business.

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 average annual percentage payout of incurred claims by age for each reserve class. The loss development tables are presented on an accident year basis for each reserve class in the insurance and reinsurance segments. The Company does not discount reserves for losses and loss expenses.

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 foreign currency exchange rates may cause material shifts in loss development. Reserves for losses and loss expenses disclosed in the consolidated balance sheets are also remeasured using the rates of exchange in effect at the balance sheet date.

There are many considerations in establishing net reserves for losses and loss expenses. An attempt to evaluate net reserves for losses and loss expenses using solely the paid losses and claim counts presented in these tables could be misleading. When projecting net reserves for losses and loss expenses, the Company relies on several inputs in addition to the information presented in this disclosure including case incurred loss projections, changes in mix of business, external trends, and additional qualitative information. The Company cautions 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 the 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 reserve class. 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 property, terrorism, accident and health, and discontinued lines - Novae.

The property line of business provides physical loss or damage, business interruption and machinery breakdown cover for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore renewable energy installations. This line of business includes primary and excess risks, some of which are catastrophe-exposed.

The terrorism line of business provides cover for physical damage and business interruption of an insured following an act of terrorism and includes kidnap and ransom, and crisis management insurance.

The accident and health line of business includes accidental death, travel insurance and specialty health products for employer and affinity groups. An increase in limited benefits medical business written in 2017 resulted in a significant increase in reported claims observed in that year.

The discontinued lines - Novae includes the international direct and facultative property line of business that Novae exited or placed into run-off in the fourth quarter of 2016.

In general, reporting and payment 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, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	392,832	$	402,013	$	383,920	$	363,521	$	359,326	$	353,602	$	352,761	$	342,723	$	342,406	$	335,903	$	8	29,793
2013			310,545		300,371		273,448		269,504		269,153		279,588		275,919		275,403		276,632		1,069		53,020
2014					362,013		356,814		346,144		330,094		329,003		327,406		322,723		319,317		2,739		62,221
2015							279,805		272,498		261,501		257,068		254,221		256,252		245,590		988		48,317
2016									353,241		380,615		371,911		358,721		352,464		355,523		3,631		93,582
2017											905,430		830,525		822,660		811,219		807,759		3,783		698,013
2018													725,996		784,554		764,189		754,009		17,643		740,146
2019															451,522		446,574		437,227		17,971		674,310
2020																	741,881		711,366		97,496		699,571
2021																			452,055		121,860		293,463
																	Total		$	4,695,381

Insurance property and other
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	77,684	$	214,440	$	278,538	$	301,512	$	309,042	$	314,210	$	314,282	$	316,388	$	316,614	$	316,722
2013			76,142		199,585		238,483		249,534		260,576		263,605		265,442		269,290		273,752
2014					133,186		260,405		307,040		314,197		318,414		319,601		316,305		316,319
2015							100,169		204,138		228,910		243,213		243,895		250,620		242,516
2016									125,806		292,009		332,043		340,568		341,693		348,739
2017											256,234		629,722		745,770		775,507		773,007
2018													288,200		585,855		685,681		699,094
2019															197,452		328,183		382,521
2020																	220,838		486,815
2021																			174,401
Total																			4,013,886
All outstanding liabilities before 2012, net of reinsurance																			7,291
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	688,786

Insurance property and other
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
35.3%	40.8%	13.7%	3.8%	1.3%	1.5%	(0.9%)	0.7%	0.9%	—%

Insurance Marine

This reserve class includes the marine line of business which provides cover for traditional marine classes, including offshore energy, renewable offshore energy, cargo, liability, recreational marine, fine art, specie, and hull 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 marine policies tends to result in reporting and payment patterns that are longer than those of the property and other reserve 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, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	89,643	$	83,026	$	68,936	$	71,000	$	72,020	$	74,541	$	72,698	$	62,100	$	65,122	$	64,686	$	2,932	4,135
2013			79,514		100,613		95,940		97,010		82,261		81,822		80,781		79,950		80,797		1,218		2,356
2014					59,719		44,469		48,205		44,152		45,634		46,932		40,617		38,112		2,693		2,169
2015							159,499		140,502		135,999		128,687		116,686		121,677		122,084		1,057		2,232
2016									86,403		78,726		76,441		71,066		69,814		68,897		2,105		2,867
2017											206,441		169,508		167,118		163,222		154,218		12,183		4,038
2018													182,358		203,260		191,806		185,628		27,926		4,426
2019															169,706		167,184		171,244		29,024		4,668
2020																	171,330		155,167		55,833		4,491
2021																			199,007		130,108		3,447
																	Total		$	1,239,840

Insurance marine
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	10,706	$	38,466	$	44,734	$	49,474	$	50,284	$	52,631	$	54,621	$	55,654	$	55,830	$	58,122
2013			18,873		43,866		54,648		62,825		65,493		76,517		76,660		77,937		79,163
2014					6,362		15,154		26,542		26,682		35,631		40,256		41,344		35,155
2015							21,446		54,640		107,512		110,367		111,761		113,293		120,216
2016									12,490		31,822		57,267		63,245		64,019		65,143
2017											14,634		67,622		91,342		115,634		122,148
2018													26,752		85,409		115,600		126,986
2019															36,293		75,653		116,160
2020																	38,554		72,095
2021																			20,043
Total																			815,231
All outstanding liabilities before 2012, net of reinsurance																			5,859
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	430,468

Insurance marine
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
17.2%	29.2%	23.6%	7.2%	5.8%	6.4%	3.0%	(4.3%)	0.9%	3.5%

Insurance Aviation

This reserve class includes the aviation line of business which provides cover for hull and liability, and specific war cover 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 insurance coverage provided. Losses arising from war or terrorism and damage to hulls of aircraft are generally reported quickly compared with liability claims which involve passengers and third parties and generally exhibit longer reporting and payment patterns. To date, the claims reported to the Company have predominantly related to damage to hulls, therefore, reporting and payment patterns have typically exhibited a relatively short-tail.

Insurance aviation
	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				At December 31, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	12,782	$	10,670	$	10,795	$	8,709	$	7,760	$	7,703	$	7,590	$	7,383	$	7,302	$	7,205	$	36	886
2013			15,654		16,334		15,207		15,249		15,586		15,471		16,763		16,670		16,451		260		1,043
2014					20,437		23,038		24,357		21,798		21,857		19,097		17,350		16,716		121		1,374
2015							29,786		28,512		29,845		29,579		27,522		28,001		27,517		179		2,053
2016									29,180		33,517		33,679		31,745		32,473		32,545		325		1,945
2017											55,401		61,524		66,263		68,549		69,799		(458)		4,466
2018													57,877		63,348		61,678		61,338		2,610		4,214
2019															44,106		41,658		41,123		2,003		2,778
2020																	37,391		25,380		6,355		1,584
2021																			43,585		22,283		1,268
																	Total		$	341,659

Insurance aviation
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	956	$	2,863	$	4,153	$	5,950	$	6,823	$	7,044	$	7,157	$	7,093	$	7,091	$	7,098
2013			4,401		7,330		9,748		11,450		13,561		14,170		14,487		15,948		15,974
2014					3,989		8,028		11,698		13,856		14,493		14,856		15,027		15,086
2015							8,086		16,166		20,968		23,227		24,686		25,993		26,107
2016									10,416		19,289		26,274		27,838		29,074		29,926
2017											21,176		40,035		50,585		58,920		61,312
2018													21,235		40,068		47,287		50,347
2019															18,052		28,771		31,628
2020																	6,324		12,954
2021																			7,532
Total																			257,964
All outstanding liabilities before 2012, net of reinsurance																			4,508
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	88,203

Insurance aviation
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
27.6%	26.1%	15.9%	11.1%	6.9%	3.3%	1.2%	2.8%	0.1%	0.1%

Insurance Credit and Political Risk

This reserve class includes the credit and political risk line of business which provides credit and political risk insurance products for banks, commodity traders, corporations and multilateral and export credit agencies. Cover is provided for a range of risks including sovereign and corporate 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. In order to claim compensation under a credit insurance contract, the insured (most often a bank) cannot assign, without the Company's prior agreement, the insured contract (most often a loan) to any third party and is normally obliged to hold a material portion of insured asset on their books, unhedged and uninsured. Claims for this business tend to be characterized by their severity risk, as opposed to their frequency risk.

Claim reporting and payment patterns are anticipated to be volatile and are generally medium-tailed. Under the notification provisions of credit insurance policies issued by the Company, it anticipates being advised of an insured event within a relatively short time period. Consequently, the Company generally estimates 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, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	32,602	$	15,672	$	12,435	$	12,447	$	10,322	$	47	$	199	$	199	$	199	$	49	$	5	4
2013			26,439		25,684		9,759		9,880		14,942		14,067		12,377		12,739		12,614		462		2
2014					38,825		70,713		67,109		68,324		69,589		71,275		70,747		69,113		—		6
2015							30,329		30,368		27,524		26,012		25,930		24,851		24,189		880		2
2016									45,760		44,711		42,221		42,792		26,577		25,597		1,081		1
2017											48,555		33,148		27,634		19,804		17,592		8,590		3
2018													43,738		36,562		35,546		27,656		13,354		2
2019															51,407		79,778		73,471		16,248		19
2020																	60,927		69,263		31,314		37
2021																			42,600		39,624		8
																	Total		$	362,144

Insurance credit and political risk
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	—	$	—	$	—	$	—	$	40	$	42	$	44	$	44	$	44	$	44
2013			745		2,235		3,726		5,216		11,769		13,828		13,828		13,828		12,151
2014					1,924		39,952		61,108		57,858		57,858		64,051		70,224		70,224
2015							—		23,309		23,309		23,309		23,309		23,309		23,309
2016									—		24,516		24,516		24,516		24,516		24,516
2017											421		4,173		9,529		12,034		11,252
2018													5,552		13,897		15,971		12,432
2019															16,431		46,924		54,239
2020																	10,013		91,352
2021																			2,769
Total																			302,288
All outstanding liabilities before 2012, net of reinsurance																			(874)
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	58,982

Insurance credit and political risk
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
7.5%	52.2%	11.3%	1.2%	21.5%	5.9%	3.3%	—%	(6.7%)	—%

Insurance Professional Lines

This reserve class includes the professional lines line of business which provides directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, cyber and privacy insurance, medical malpractice and other financial insurance related covers for public and private commercial enterprises, financial institutions, not-for-profit organizations and other professional service providers. This reserve class also includes discontinued lines - Novae specifically the financial institutions and professional indemnity lines of business that Novae exited or placed into run-off in the first quarter of 2017. 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 payment patterns.

With respect to key actuarial assumptions, the Company relies on its loss experience when establishing expected loss ratios and selecting loss development patterns. 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 or underwriting year matures. Consequently, initial reserves for losses and loss expenses for an accident year or underwriting year are generally based on an ELR Method and the consideration of relevant qualitative factors. As accident years and underwriting years mature, the Company increasingly gives more weight to methods that reflect its experience until its selections are based almost exclusively on experience-based methods. The Company evaluates the appropriateness of the transition to experience-based methods at the reserve class level, commencing this transition when it believes that its incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which the Company transitions fully to sole reliance on experience-based methods can vary by reserve class and by year, depending on its assessment of the stability and relevance of such indications. For some professional lines in the insurance segment, the Company also relies on 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, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	329,064	$	376,334	$	377,681	$	376,619	$	363,769	$	365,781	$	354,414	$	352,476	$	334,321	$	337,000	$	20,571	8,348
2013			384,382		398,008		399,307		366,094		355,419		357,807		335,888		339,108		335,453		36,146		9,473
2014					413,511		412,262		422,079		392,916		372,390		354,972		348,326		351,729		51,739		9,858
2015							378,217		377,970		383,614		358,613		345,416		328,723		329,377		47,302		10,532
2016									350,015		352,753		359,176		360,698		370,847		374,148		58,192		11,909
2017											394,239		398,881		440,090		436,589		453,259		103,291		13,870
2018													363,496		379,463		433,040		460,903		130,876		16,765
2019															406,170		428,019		467,030		206,644		16,954
2020																	440,967		432,895		283,686		11,622
2021																			509,463		448,897		8,271
																	Total		$	4,051,257

Insurance professional lines
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	7,825	$	41,505	$	100,434	$	184,776	$	231,582	$	254,682	$	274,150	$	282,494	$	298,902	$	304,095
2013			17,718		73,251		130,081		176,433		213,979		243,890		264,537		277,239		291,767
2014					23,579		70,688		130,348		192,845		224,461		243,586		253,387		277,463
2015							20,291		67,886		138,136		170,009		204,121		243,082		258,963
2016									15,913		71,229		147,678		192,832		234,825		261,321
2017											21,052		71,877		139,143		206,193		240,455
2018													20,945		82,982		155,101		222,374
2019															28,206		99,158		169,088
2020																	26,640		95,558
2021																			34,035
Total																			2,155,119
All outstanding liabilities before 2012, net of reinsurance																			113,232
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	2,009,370

Insurance professional lines
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
5.3%	13.9%	17.3%	15.4%	10.6%	8.0%	4.9%	4.4%	4.6%	1.5%

Insurance Liability

This reserve class includes the liability line of business which primarily targets primary and low to mid-level excess and umbrella commercial liability risks in the U.S. wholesale markets in addition to primary and excess of loss employers, public and products liability business predominately in the U.K. This reserve class also includes discontinued lines - Novae specifically the international liability line of business that Novae exited or placed into run-off in the fourth quarter of 2016. 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 reporting and payment patterns that are typically long-tail in nature. A consequence of the claim development tail is that this line of business is particularly exposed, among 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, 2021
	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	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	70,859	$	71,690	$	74,135	$	71,474	$	68,658	$	75,698	$	72,727	$	67,238	$	64,542	$	61,993	$	10,249	3,355
2013			93,234		95,309		95,175		88,243		93,682		95,983		91,943		89,902		94,201		13,218		3,690
2014					107,136		124,313		129,774		130,674		132,021		131,477		132,585		132,064		14,321		5,265
2015							128,437		127,424		137,652		165,160		182,891		188,218		187,146		26,055		6,390
2016									124,322		130,209		128,940		127,572		120,333		120,309		27,993		7,208
2017											167,803		165,661		185,998		202,508		206,833		36,274		8,471
2018													168,202		169,241		192,289		205,961		51,462		8,292
2019															192,358		193,526		222,820		83,628		7,567
2020																	225,407		225,866		171,715		5,285
2021																			233,055		198,167		4,171
																	Total		$	1,690,248

Insurance liability
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	1,631	$	5,514	$	15,411	$	30,145	$	37,139	$	42,740	$	46,541	$	48,034	$	48,316	$	48,505
2013			2,360		23,281		33,320		42,051		60,005		66,964		71,983		73,314		78,023
2014					1,414		18,643		49,839		71,596		84,376		93,576		103,050		106,215
2015							5,438		22,444		39,702		92,744		120,313		141,002		150,848
2016									6,323		23,289		36,382		56,455		66,371		79,594
2017											5,561		29,610		59,306		116,157		144,267
2018													9,460		34,931		72,398		119,446
2019															7,887		39,986		83,943
2020																	8,163		25,245
2021																			13,413
Total																			849,499
All outstanding liabilities before 2012, net of reinsurance																			61,635
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	902,384

Insurance liability
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
3.5%	12.3%	15.3%	20.7%	12.8%	9.1%	6.0%	2.1%	2.8%	0.3%

Reinsurance Segment

The presentation of net incurred and paid claims development tables by accident year for the reinsurance segment is challenging due to the need to allocate loss information related to proportional treaties to the appropriate accident years. Information related to proportional treaty reinsurance contracts is generally submitted to the Company via quarterly bordereaux reporting by underwriting year, with a supplemental listing of large losses. Large losses can be allocated to the corresponding accident years accurately. The remaining losses can generally only be allocated to accident years based on estimated premiums earned 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 net incurred and paid claims development presented in the tables below.

The reporting of cumulative claims frequency for the reserve classes within the reinsurance segment is deemed to be impracticable as 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 includes catastrophe, property, agriculture, engineering, marine and aviation, accident and health, and discontinued lines - Novae.

The catastrophe line of business provides protection for most catastrophic losses that are covered in the underlying insurance policies written by the Company's cedants. The underlying policies principally cover property-related exposures but other exposures including workers compensation and personal accident are also covered. The principal perils covered by policies in this portfolio include hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. This business is written on a proportional and an excess of loss basis.

The property line of business provides protection for property damage and related losses resulting from natural and man-made perils that are covered in underlying personal and commercial lines insurance policies written by the Company's cedants. The predominant exposure is to property damage, but other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. The most significant perils covered by policies in this portfolio include windstorm, tornado and earthquake, but other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events are also included. This business is written on a proportional and excess of loss basis.

The agriculture line of business provides protection 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. This business is written on a proportional and aggregate stop loss reinsurance basis.

The engineering line of business provides protection 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. The Company exited this line of business in 2020.

The marine and aviation line of business includes specialty marine classes such as cargo, hull, pleasure craft, marine liability, inland marine and offshore energy. The principal perils covered by policies in this portfolio include physical loss, damage and/or liability arising from natural perils of the seas or land, man-made events including fire and explosion, stranding/sinking/salvage, pollution, shipowners and maritime employers liability. This business is written on a non-proportional and proportional basis. Aviation provides cover for airline, aerospace and general aviation exposures. This business is written on a proportional and non-proportional basis.

The accident and health line of business includes personal accident, specialty health, accidental death, travel, life and disability reinsurance products which are offered on a proportional and catastrophic or per life excess of loss basis.

The discontinued lines - Novae includes the international facultative property line of business that Novae exited or placed into run-off in the fourth quarter of 2016.

In general, reporting and payment patterns are relatively short-tailed although they can be volatile due to the incidence of catastrophe events.

Reinsurance property and other
	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				At December 31, 2021
	For the years ended December 31,																				Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	555,785	$	523,613	$	508,032	$	477,396	$	461,542	$	456,536	$	457,952	$	454,701	$	454,280	$	451,567	$	81
2013			580,230		562,186		531,304		510,944		504,945		504,433		501,123		500,490		497,825		585
2014					542,903		525,809		499,636		487,065		485,213		484,443		481,582		481,788		3,587
2015							478,050		465,733		460,576		455,252		451,295		456,549		453,142		1,568
2016									618,765		637,746		624,507		620,858		622,706		623,977		8,053
2017											1,099,195		1,080,897		1,103,419		1,110,521		1,105,803		40,302
2018													884,369		1,010,076		1,014,311		1,019,138		44,435
2019															951,665		949,822		924,338		78,420
2020																	859,634		893,869		163,285
2021																			783,134		425,137
																	Total		$	7,234,581

Reinsurance property and other
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	122,945	$	294,809	$	367,575	$	390,051	$	404,621	$	414,306	$	416,360	$	428,889	$	430,468	$	434,420
2013			107,774		325,596		442,216		472,619		482,360		483,785		484,429		484,128		487,971
2014					102,421		353,313		435,322		452,832		458,981		463,976		461,202		468,080
2015							71,550		266,150		369,339		401,731		414,291		420,783		436,720
2016									128,812		378,387		522,648		565,778		584,602		592,193
2017											252,454		723,271		866,481		938,025		965,116
2018													196,679		646,904		793,481		859,649
2019															162,093		590,010		708,467
2020																	209,072		483,680
2021																			165,582
Total																			5,601,878
All outstanding liabilities before 2012, net of reinsurance																			20,247
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,652,950

Reinsurance property and other
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
21.1%	42.3%	17.8%	6.0%	2.5%	1.2%	0.9%	1.4%	0.6%	0.9%

Reinsurance Credit and Surety

This reserve class includes the credit and surety line of business which provides reinsurance of trade credit insurance products and includes 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. Surety reinsurance provides protection 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. The Company also provides mortgage reinsurance to mortgage guaranty insurers and U.S. government sponsored entities for losses related to credit risk transfer into the private sector.

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 and mortgage business, the Company generally commences the transition to experience-based methods sooner for these lines of business than for surety business.

Reinsurance credit and surety
	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				At December 31, 2021
	For the years ended December 31,																				Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	158,822	$	148,841	$	151,401	$	148,622	$	140,246	$	132,213	$	128,662	$	125,625	$	123,383	$	122,058	$	1,642
2013			165,106		153,538		144,733		140,863		136,675		125,376		125,497		128,319		127,065		2,445
2014					137,007		136,403		143,576		139,862		128,434		127,133		123,430		122,149		990
2015							160,874		166,772		161,575		157,491		138,575		139,565		140,788		3,998
2016									142,299		141,963		149,807		124,115		116,440		114,123		2,592
2017											139,346		133,506		127,691		118,941		116,204		6,021
2018													112,256		121,246		115,905		112,859		13,156
2019															75,066		69,366		69,399		10,705
2020																	77,354		84,115		40,625
2021																			52,278		36,571
																	Total		$	1,061,038

Reinsurance credit and surety
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	49,736	$	85,902	$	99,969	$	105,808	$	109,335	$	111,111	$	112,430	$	114,392	$	114,809	$	113,870
2013			32,474		77,279		92,165		98,755		106,422		108,318		113,284		115,494		113,741
2014					35,632		61,490		86,580		95,711		103,309		107,724		108,232		108,039
2015							32,944		82,167		100,347		117,426		119,333		123,042		123,907
2016									42,110		73,643		92,792		102,465		103,591		102,153
2017											37,387		74,473		91,162		102,901		101,047
2018													39,079		69,040		73,748		85,470
2019															19,382		31,841		46,028
2020																	25,386		34,330
2021																			4,477
Total																			833,062
All outstanding liabilities before 2012, net of reinsurance																			21,326
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	249,302

Reinsurance credit and surety
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
28.9%	26.2%	14.1%	8.4%	2.7%	1.6%	1.5%	1.0%	(0.6%)	(0.8%)

Reinsurance Professional Lines

This reserve class includes the professional line of business which provides protection for directors' and officers' liability, employment practices liability, medical malpractice, professional indemnity, environmental liability, cyber, and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. This business is written on a proportional and excess of loss basis. Typically, this reserve class is anticipated to exhibit medium to long-tail claim reporting and payment patterns.

With respect to key actuarial assumptions, the Company relies on its loss experience when establishing expected loss ratios and selecting loss development patterns. Loss reporting patterns for professional lines business tend to be volatile, causing instability in actuarial indications based on incurred loss data until an underwriting year matures. Consequently, initial reserves for losses and loss expenses for an underwriting year are generally based on the ELR Method and the consideration of relevant qualitative factors. As underwriting years mature, the Company increasingly gives more weight to methods that reflect its experience until its selections are based almost exclusively on experience-based methods. The Company evaluates the appropriateness of the transition to experience-based methods at the reserve class level, commencing this transition when it believes that its incurred loss development is sufficient to produce meaningful actuarial indications. The rate at which the Company transitions fully to sole reliance on experience-based methods can vary by reserve class and by year, depending on its 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, 2021
	For the years ended December 31,																				Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	209,815	$	216,364	$	221,821	$	224,214	$	222,937	$	212,941	$	214,341	$	207,151	$	203,653	$	205,581	$	8,110
2013			209,516		214,662		215,862		214,075		213,590		206,226		182,005		169,783		165,978		8,416
2014					219,544		219,610		219,552		219,509		233,896		230,376		229,236		227,369		5,971
2015							212,183		212,226		214,606		225,365		232,164		229,418		236,208		19,277
2016									195,328		196,480		200,309		228,398		256,207		256,242		32,832
2017											155,335		156,019		162,447		179,072		189,356		35,316
2018													146,729		149,373		156,429		167,128		47,916
2019															139,177		139,131		143,214		68,827
2020																	141,974		143,135		105,608
2021																			149,925		131,625
																	Total		$	1,884,136

Reinsurance professional lines
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	778	$	10,404	$	29,657	$	53,696	$	86,064	$	107,351	$	132,030	$	146,093	$	155,739	$	165,580
2013			1,066		12,089		30,544		65,027		81,721		105,054		123,498		128,867		133,276
2014					2,019		13,079		48,891		74,640		109,356		147,361		159,081		178,781
2015							3,134		13,506		41,565		79,285		112,030		132,153		152,907
2016									1,771		20,566		52,689		95,450		125,448		154,200
2017											2,814		14,961		39,960		62,975		89,223
2018													271		2,616		31,352		57,170
2019															371		13,696		33,902
2020																	3,825		14,109
2021																			4,337
Total																			983,485
All outstanding liabilities before 2012, net of reinsurance																			68,013
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	968,664

Reinsurance professional lines
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
1.2%	5.8%	13.2%	14.9%	13.4%	12.2%	9.3%	6.2%	3.7%	4.8%

Reinsurance Motor

This reserve class includes the motor line of business which provides protection to insurers for motor liability and motor property damage losses arising from any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. This reserve class also includes discontinued lines - Novae specifically the motor reinsurance line of business that Novae exited or placed into run-off in the first quarter of 2017. The Company offers 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 premium in this line of business. Most of the premium relates to a relatively small number of large United Kingdom ("U.K.") quota share reinsurance treaty contracts. The motor proportional business generally has a significantly shorter reported and payment pattern, relative to the motor non-proportional business.

The motor non-proportional business consists of standard excess of loss contracts written for cedants in several European countries with most of the premium related to two major markets, U.K. and France. Since 2009/2010, an increasing number 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 the inclusion of capitalization clauses on a number of U.K. motor treaties which allow reinsurers to settle claims arising under PPOs with a lump sum payment, to help mitigate the lengthening of the development tail on more recent accident years.

In 2017, the U.K. Ministry of Justice announced a decrease in the discount rate to be used to calculate lump sum awards in U.K. bodily injury cases, known as the Ogden Rate. Effective March 20, 2017, the Ogden rate changed from plus 2.5% to minus 0.75%. This resulted in a trend toward a lower number of claims settlements using PPOs and an increase in projected ultimate losses, particularly related to recent accident years.

Effective August 5, 2019, the Ogden rate changed from minus 0.75% to minus 0.25%. This resulted in a decrease in projected ultimate losses, particularly related to recent accident years.

Reinsurance motor
	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				At December 31, 2021
	For the years ended December 31,																				Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	182,633	$	173,749	$	162,106	$	154,440	$	149,527	$	139,917	$	136,989	$	128,719	$	129,001	$	125,068	$	9,380
2013			167,165		165,656		153,715		144,202		140,724		137,925		128,823		125,709		121,852		5,645
2014					187,744		190,577		185,889		183,176		178,705		175,289		171,880		171,540		4,531
2015							228,839		226,222		230,494		232,237		220,530		219,179		216,102		8,044
2016									252,697		273,424		275,311		264,703		256,311		253,527		7,507
2017											375,025		388,304		377,357		377,101		377,449		26,571
2018													368,844		372,104		384,410		380,446		42,305
2019															349,016		348,877		349,747		51,861
2020																	225,728		229,582		71,686
2021																			188,428		111,017
																	Total		$	2,413,741

Reinsurance motor
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	29,565	$	54,803	$	70,098	$	80,217	$	86,965	$	91,200	$	93,594	$	94,827	$	86,130	$	97,432
2013			34,395		55,392		70,078		80,600		86,524		92,307		95,445		86,532		99,978
2014					43,918		76,923		97,479		106,072		116,724		126,849		122,682		143,954
2015							58,581		96,745		118,018		135,958		152,558		154,002		177,260
2016									61,686		108,670		133,970		152,721		166,826		191,945
2017											73,425		139,560		171,933		208,687		232,316
2018													85,158		148,084		215,555		227,804
2019															90,829		186,943		206,602
2020																	44,268		100,288
2021																			42,173
Total																			1,519,752
All outstanding liabilities before 2012, net of reinsurance																			230,586
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,124,575

Reinsurance motor
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
23.8%	19.9%	11.0%	7.2%	6.0%	4.9%	3.2%	2.0%	2.0%	9.0%

Reinsurance Liability

This reserve class includes the liability line of business which provides protection to insurers of admitted casualty business, excess and surplus lines casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, workers' compensation, auto liability and excess casualty. This reserve class includes discontinued lines - Novae specifically the general liability reinsurance line of business that Novae exited or placed into run-off in the first quarter of 2017.

Claim reporting and payment patterns are typically long-tail in nature and, therefore, 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, mass tort and changing social trends.

Reinsurance liability
	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				At December 31, 2021
	For the years ended December 31,																				Total of incurred-but-not-reported liabilities plus expected development on reported claims
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	166,836	$	163,315	$	167,715	$	172,661	$	173,827	$	171,269	$	164,524	$	158,528	$	160,665	$	163,062	$	11,222
2013			171,714		175,587		182,564		184,591		184,252		177,391		157,366		156,069		154,459		12,187
2014					199,798		203,282		205,011		200,935		199,736		197,580		188,082		183,909		19,068
2015							215,061		215,460		216,437		216,257		214,011		214,132		203,913		28,578
2016									240,882		246,322		251,424		254,716		264,749		268,888		50,187
2017											275,897		271,104		280,632		290,024		299,740		73,074
2018													265,519		270,527		275,980		288,528		90,968
2019															263,805		273,309		275,176		135,114
2020																	284,232		285,083		189,324
2021																			304,922		265,558
																	Total		$	2,427,680

Reinsurance liability
	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
	For the years ended December 31,
Accident year	2012 unaudited		2013 unaudited		2014 unaudited		2015 unaudited		2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021
2012	$	3,541	$	12,803	$	28,392	$	58,815	$	78,291	$	101,234	$	115,695	$	126,071	$	134,357	$	136,365
2013			5,974		22,242		52,338		69,069		88,280		102,617		113,154		123,710		128,124
2014					7,094		28,672		48,445		70,214		89,502		110,095		130,304		137,659
2015							7,271		27,460		54,556		80,911		109,056		131,010		141,808
2016									11,884		37,742		69,655		112,028		143,293		167,276
2017											12,477		42,227		78,771		121,223		159,265
2018													19,361		50,121		85,510		128,405
2019															19,326		45,415		80,066
2020																	16,950		49,233
2021																			10,998
Total																			1,139,199
All outstanding liabilities before 2012, net of reinsurance																			114,137
Liabilities for claims and claim adjustment expenses, net of reinsurance																			$	1,402,618

Reinsurance liability
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
4.5%	9.9%	12.8%	14.2%	12.2%	10.9%	8.0%	5.7%	4.0%	1.2%

Reconciliation of Loss Development Tables to Consolidated Balance Sheet

The following table reconciles the reserve for losses and loss expenses at December 31, 2021, included in the loss development tables to the reserve for losses and loss expenses reported in the consolidated balance sheet:

Reconciliation of the disclosure of incurred and paid claims development to the liability for unpaid claims and claim adjustment expenses
	At December 31, 2021
	Net outstanding liabilities		Reinsurance recoverable on unpaid claims		Gross outstanding liabilities
Insurance segment
Property and other	$	688,786	$	417,814	$	1,106,600
Marine	430,468		182,584		613,052
Aviation	88,203		58,067		146,270
Credit and political risk	58,982		(23,381)		35,601
Professional lines	2,009,370		1,494,488		3,503,858
Liability	902,384		1,321,469		2,223,853
Total insurance segment	4,178,193		3,451,041		7,629,234
Reinsurance segment
Property and other	1,652,950		584,201		2,237,151
Credit and surety	249,302		66,965		316,267
Professional lines	968,664		251,341		1,220,005
Motor	1,124,575		229,195		1,353,770
Liability	1,402,618		434,868		1,837,486
Total reinsurance segment	5,398,109		1,566,570		6,964,679
Total	$	9,576,302	$	5,017,611	14,593,913
Unallocated claims adjustment expenses					159,676
Foreign exchange and other(1)					48,373
Ceded reserves related to retroactive transactions					(148,868)
Total liability for unpaid claims and claims adjustment expense					$	14,653,094

(1)    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 in the consolidated balance sheets are also remeasured using rates of exchange in effect at the balance sheet date.