Reserves for Unpaid Loss and LAE (Tables)

9 Months Ended

Sep. 30, 2012

Reserves for Unpaid Losses and Loss Adjustment Expenses

Loss and loss adjustment expense ("LAE") reserve activities

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
	($ in millions)
Gross beginning balance	$	3,175.3		$	3,131.5		$	3,358.6		$	3,295.5
Less beginning reinsurance recoverable on unpaid losses	(2,040.7		)	(1,825.9		)	(2,167.5		)	(1,893.2		)
Net loss and LAE reserves	1,134.6			1,305.6			1,191.1			1,402.3
Loss and LAE incurred relating to:
Current year losses	167.0			155.7			460.1			435.7
Prior year losses	(2.3		)	(6.0		)	(7.6		)	(14.4		)
Total incurred loss and LAE from continuing Operations	164.7			149.7			452.5			421.3
Loss and LAE paid relating to:
Current year losses	(59.6		)	(62.2		)	(123.0		)	(132.9		)
Prior year losses	(73.4		)	(64.5		)	(266.2		)	(244.7		)
Total loss and LAE payments from continuing operations	(133.0		)	(126.7		)	(389.2		)	(377.6		)
Net loss and LAE reserves	1,166.3			1,328.6			1,254.4			1,446.0
Total incurred loss and LAE from discontinued operations	27.7			12.9			48.4			37.7
Total loss and LAE payments from discontinued operations	(67.4		)	(63.7		)	(177.1		)	(205.9		)
Net loss and LAE reserves	1,126.6			1,277.8			1,125.7			1,277.8
Net loss and LAE reserves reclassified to held for sale related to Runoff (1)	(256.3		)	—			(256.3		)	—
Net loss and LAE reserves reclassified (to) from held for sale related to AutoOne (2)	—			(58.0		)	64.7			(58.0		)
Net loss and LAE reserves sold as part of the AutoOne Transaction (3)	—			—			(63.8		)	—
Net ending balance	870.3			1,219.8			870.3			1,219.8
Plus ending reinsurance recoverable on unpaid Losses	41.3			1,939.3			41.3			1,939.3
Gross ending balance	$	911.6		$	3,159.1		$	911.6		$	3,159.1

(1)In the three and nine months ended September 30, 2012, $256.3 million of net loss and LAE reserves related to the Runoff business were reclassified to held for sale.

(2)In the three and nine months ended September 30, 2011, $58.0 million of net loss and LAE reserves related to the AutoOne Transaction were reclassified to held for sale. In the nine months ended September 30, 2012, $64.7 million of net loss and LAE reserves related to the AutoOne Transaction were reclassified from held for sale immediately prior to the closing of the transaction which occurred on February 22, 2012.

(3)In the nine months ended September 30, 2012, $63.8 million of net loss and LAE reserves related to the AutoOne Transaction were sold.