11.

Liability for Unpaid Losses and Loss Adjustment Expenses

Starting on December 31, 2016, and for future annual reporting periods, the Company has enhanced its disclosure regarding liabilities for unpaid losses and loss adjustment expenses by presenting development tables for incurred claims and paid claims, the average annual percentage payout of incurred claims by age and a reconciliation of incurred and paid claims development information to the unpaid losses and loss adjustment expenses on the balance sheet.

The incurred and paid claims tables are aggregated by lines of business that have similar payout patterns. In the case of Global Indemnity, payout patterns are generally similar for property lines within their respective segments and for casualty lines within their respective segments.

The tables are shown net of reinsurance and by accident year. The incurred claims tables include incurred-but-not-reported (“IBNR”) liabilities. The incurred claims tables also include quantitative information about claim frequency.

Information regarding liabilities for unpaid losses and loss adjustment expenses that had been provided in prior year end reporting periods are consistent with the disclosures made in such prior year end reporting periods.

Consolidated Activity

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


	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Balance at beginning of period	$	680,047		$	675,472		$	779,466
Less: Ceded reinsurance receivables		108,130			123,201			192,491

Net balance at beginning of period		571,917			552,271			586,975
Purchased reserves, gross		2,007			89,489			—
Less: Purchased reserves ceded		(45	)		12,800			—

Purchase reserves, net of third party reinsurance		2,052			76,689			—

Incurred losses and loss adjustment expenses related to:
Current year		321,255			310,066			153,994
Prior years		(57,252	)		(34,698	)		(16,433	)

Total incurred losses and loss adjustment expenses		264,003			275,368			137,561

Paid losses and loss adjustment expenses related to:
Current year		177,006			164,058			55,485
Prior years		140,363			168,353			116,780

Total paid losses and loss adjustment expenses		317,369			332,411			172,265

Net balance at end of period		520,603			571,917			552,271
Plus: Ceded reinsurance receivables		130,439			108,130			123,201

Balance at end of period	$	651,042		$	680,047		$	675,472

When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates.

During 2016, the Company reduced its prior accident year loss reserves by $57.3 million, which consisted of a $43.8 million decrease related to Commercial Lines and a $13.5 million decrease related to Reinsurance Operations.

The $43.8 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following:

•

Property: A $0.8 million increase in aggregate with a $0.5 million increase in the non-catastrophe segments and $0.3 million increase in the catastrophe segments. The increases reflect higher than expected case incurred emergence, primarily in the 2009, 2012, and 2015 accident years. The increases were partially offset by decreases in the 2008, 2011, and 2013 accident years due to better than expected case incurred emergence in those accident years.

•

General Liability: A $43.8 million reduction in aggregate, within the casualty lines, with $9.4 million of favorable development in the construction defect reserve category and $34.4 million of favorable development in the other general liability reserve categories. For the construction defect reserve category, lower than expected frequency and severity led to favorable development in accident years 2005 through 2015. Lower than expected claims severity was the driver of the favorable development in the other general liability reserve categories, primarily in the 2004 through 2014 accident years.

•

Marine: A $1.4 million decrease in accident years 2010 through 2012 was driven by less than expected case incurred emergence in these years which is primarily within the casualty lines.

The $13.5 million reduction of prior accident year loss reserves related to Reinsurance Operations was primarily from the property lines for accident years 2010 through 2015. Ultimate losses were lowered in these accident years based on reviews of the experience reported from cedants.

During 2015, the Company reduced its prior accident year loss reserves by $34.7 million, which consisted of a $25.6 million decrease related to Commercial Lines and a $9.1 million decrease related to Reinsurance Operations.

The $25.6 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following:

•

General Liability: A $20.4 million reduction in aggregate, within the casualty lines, with $5.9 million of favorable development in the construction defect reserve category and $14.5 million of favorable development in the other general liability reserve categories. In the construction defect reserve category, a reduction in both claims frequency and severity was observed across several accident years which contributed to the recognition of favorable development primarily in accident years 2008 through 2014. For general liability excluding construction defect, lower than expected claims severity was experienced across multiple accident years leading to the recognition of favorable development in accident years 2004 through 2014.

•

Professional: A $6.2 million decrease in aggregate primarily related to better than anticipated claims frequency and severity in accident years 2006 through 2011 which is within the casualty lines.

The $9.1 million reduction of prior accident year loss reserves related to Reinsurance Operations was primarily driven by $6.8 million of favorable development in property mainly due to accident years 2011 through 2014 and $2.8 million of favorable development in the marine product mainly due to accident years 2010 and 2011, partially offset by adverse development of $1.0 million in workers compensation mainly due to accident year 2010. Ultimate losses from quota share underwriting years 2013 and prior were booked to the amount reported from cedants and reserve releases on legacy contracts due to better than anticipated case incurred emergence led to the recognition of favorable development.

During 2014, the Company reduced its prior accident year loss reserves by $16.4 million, which consisted of a $12.5 million decrease related to Commercial Lines and a $3.9 million decrease related to Reinsurance Operations.

The $12.5 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following:

•

Property: A $2.1 million increase due to higher than expected emergence on non-catastrophe claims primarily in accident years 2007, 2012, and 2013.

•

General Liability: A $3.1 million reduction, within the casualty lines, due to less than anticipated frequency in accident year 2001 and less than anticipated frequency and severity on claims from accident years 2007 through 2010 partially offset by greater than anticipated loss emergence in accident year 2013.

•

Asbestos and Environmental: A $7.1 million increase, within the casualty lines, related to policies written prior to 1990 as a result of recent severity being higher than expected due to faster erosion of underlying policy limits.

•

Professional: A $19.4 million reduction primarily due to expected loss emergence being much less than anticipated for accident years 2007 through 2011 which is within the casualty lines.

•

Umbrella: A $2.7 million decrease primarily driven by less than anticipated frequency in accident years 2002 through 2007 which is within the casualty lines.

•

Commercial Auto: A $3.6 million increase primarily related to accident years 2011 through 2013 which is within the casualty lines. Larger vehicles were written prior to 2014 and industry loss development factors were used to project losses.

The $3.9 million reduction of prior accident year loss reserves related to Reinsurance Operations was primarily due to better than anticipated loss emergence on property lines partially offset by adverse development related to commercial auto and higher than anticipated severity on the Company’s marine product.

Prior to 2001, the Company underwrote multi-peril business insuring general contractors, developers, and sub-contractors primarily involved in residential construction that has resulted in significant exposure to construction defect (“CD”) claims. The Company’s reserves for CD claims are established based upon management’s best estimate in consideration of known facts, existing case law and generally accepted actuarial methodologies. However, due to the inherent uncertainty concerning this type of business, the ultimate exposure for these claims may vary significantly from the amounts currently recorded. As of December 31, 2016 and 2015, gross reserves for CD claims were $54.5 million and $70.4 million, respectively, and net reserves for CD claims were $48.6 million and $62.2 million, respectively.

The Company has exposure to asbestos and environmental (“A&E”) claims. The asbestos exposure primarily arises from the sale of product liability insurance, and the environmental exposure arises from the sale of general liability and commercial multi-peril insurance. In establishing the liability for unpaid losses and loss adjustment expenses related to A&E exposures, management considers facts currently known and the current state of the law and coverage litigation. Liabilities are recognized for known claims (including the cost of related litigation) when sufficient information has been developed to indicate the involvement of a specific insurance policy, and management can reasonably estimate its liability. In addition, liabilities have been established to cover additional exposures on both known and unasserted claims. Estimates of the liabilities are reviewed and updated regularly. Case law continues to evolve for such claims, and uncertainty exists about the outcome of coverage litigation and whether past claim experience will be representative of future claim experience. Included in net unpaid losses and loss adjustment expenses as of December 31, 2016, 2015, and 2014 were IBNR reserves of $26.7 million, $26.0 million, and $26.4 million, respectively, and case reserves of approximately $3.2 million, $4.5 million, and $4.8 million, respectively, for known A&E-related claims.

The following table shows the Company’s gross reserves for A&E losses:


	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Gross reserve for A&E losses and loss adjustment expenses—beginning of period	$	53,824		$	56,535		$	50,155
Plus: Incurred losses and loss adjustment expenses—case reserves		(669	)		2,666			4,333
Plus: Incurred losses and loss adjustment expenses—IBNR		2,064			(2,663	)		7,340
Less: Payments		3,300			2,714			5,293

Gross reserves for A&E losses and loss adjustment expenses—end of period	$	51,919		$	53,824		$	56,535

The following table shows the Company’s net reserves for A&E losses:


	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Net reserve for A&E losses and loss adjustment expenses—beginning of period	$	30,529		$	31,185		$	23,038
Plus: Incurred losses and loss adjustment expenses—case reserves		(125	)		395			2,754
Plus: Incurred losses and loss adjustment expenses—IBNR		631			(394	)		8,241
Less: Payments		1,145			657			2,848

Net reserves for A&E losses and loss adjustment expenses—end of period	$	29,890		$	30,529		$	31,185

Establishing reserves for A&E and other mass tort claims involves more judgment than other types of claims due to, among other things, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage. The insurance industry continues to receive a substantial number of asbestos-related bodily injury claims, with an increasing focus being directed toward other parties, including installers of products containing asbestos rather than against asbestos manufacturers. This shift has resulted in significant insurance coverage litigation implicating applicable coverage defenses or determinations, if any, including but not limited to, determinations as to whether or not an asbestos-related bodily injury claim is subject to aggregate limits of liability found in most comprehensive general liability policies.

As of December 31, 2016, 2015, and 2014, the survival ratio on a gross basis for the Company’s open A&E claims was 13.8 years, 15.0 years, and 10.8 years, respectively. As of December 31, 2016, 2015, and 2014, the survival ratio on a net basis for the Company’s open A&E claims was 19.3 years, 16.8 years, and 8.4 years, respectively. The survival ratio, which is the ratio of gross or net reserves to the 3-year average of annual paid claims, is a financial measure that indicates how long the current amount of gross or net reserves are expected to last based on the current rate of paid claims.

Line of Business Categories

The following is information, presented by lines of business with similar payout patterns, about incurred and paid claims development as of December 31, 2016, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities included within the net incurred claims amounts.

The information about incurred and paid claims development for the years ended December 31, 2007 to 2015, is presented as supplementary unaudited information.

Commercial Lines

Property and Casualty Methodologies

Commercial Lines internal actuarial reserve reviews were completed for loss and allocated loss adjustment expenses (ALAE) separately for property excluding catastrophe experience, property catastrophes, and casualty reserve categories. The reserve reviews were completed with data through December, 2016. Actuarial methodologies, such as the Loss Development and Bornhuetter-Ferguson methods, were employed to develop estimates of ultimate Loss & ALAE for most reserve categories. Additional actuarial methodologies were employed to develop estimates of ultimate Loss & ALAE for mass tort and constructions defect reserve categories due to the unique characteristics of the exposures involved. Management’s ultimate selections were based on the internal actuarial review and a third party actuarial review based on data through September 2016. A rollforward, performed by the aforementioned third party, was completed through December, 2016 to determine if there have been any significant changes in development. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year.

Commercial Lines cumulative claim frequency has been calculated at the claim level and includes claims closed without payment.

Commercial Lines—Property

(Dollars in thousands)


	Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,						As of December 31, 2016
Accident Year	2014		2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)		(unaudited)
2014	$	64,459	$	65,529	$	65,375	$	3,247		6,388
2015				64,693		65,880		5,817		4,864
2016						63,632		11,855		4,047

				Total	$	194,887

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Commercial Lines—Property

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2014		2015		2016
	(unaudited)		(unaudited)
2014	$	45,771	$	59,049	$	61,085
2015				41,972		58,134
2016						39,994

Total						159,213
All outstanding liabilities before 2014, net of reinsurance						5,378

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance					$	41,052

The following is supplementary information about average historical claims duration as of December 31, 2016:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2			3
Commercial Lines—Property		65.5	%		22.4	%		3.1	%

Commercial Lines—Casualty

(Dollars in thousands)


	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of December 31, 2016
Accident Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2007	$	222,751	$	238,374	$	240,974	$	229,255	$	219,709	$	221,276	$	215,716	$	210,327	$	208,412	$	205,257	$	11,119		8,690
2008				138,417		170,855		160,325		149,564		148,019		146,142		138,558		134,352		129,740		10,002		6,065
2009						93,748		96,956		104,518		104,803		104,392		96,206		92,666		89,939		9,537		3,774
2010								79,188		101,830		102,252		101,113		94,484		90,683		83,997		11,891		3,287
2011										115,441		117,602		117,288		115,193		109,420		96,761		18,682		3,478
2012												61,340		65,911		65,637		63,123		54,674		14,766		2,140
2013														63,807		68,089		66,855		65,220		14,390		2,278
2014																61,325		58,873		56,620		19,267		2,089
2015																		55,628		55,141		24,547		1,715
2016																				52,228		37,773		1,247

																		Total	$	889,577

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Commercial Lines—Casualty

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2007	$	14,250	$	46,819	$	96,489	$	136,203	$	160,712	$	174,488	$	184,028	$	188,162	$	190,102	$	191,564
2008				7,844		34,172		65,700		86,889		100,369		110,145		114,546		116,094		117,639
2009						5,564		19,154		37,653		53,738		65,721		71,108		73,831		76,413
2010								5,503		19,926		34,659		50,520		58,913		64,693		66,593
2011										5,451		21,325		41,282		56,562		64,885		72,247
2012												3,500		11,884		22,456		30,883		35,776
2013														6,400		17,881		28,955		37,657
2014																3,968		14,846		25,133
2015																		2,958		13,922
2016																				3,847

																		Total	$	640,791
All outstanding liabilities before 2007, net of reinsurance																				62,487

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance																			$	311,274

The following is supplementary information about average historical claims duration as of December 31, 2016:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2			3			4			5			6			7			8			9			10
Commercial Lines—Casualty		6.7	%		17.4	%		20.2	%		16.7	%		10.5	%		6.9	%		3.3	%		2.0	%		1.1	%		0.7	%

Personal Lines

Property and Casualty Methodologies

Personal Lines internal actuarial reserve reviews were completed for loss and loss adjustment expenses (LAE) combined for property excluding catastrophe experience, property catastrophes, and casualty reserve categories. The reserve reviews were completed with data through December, 2016. Actuarial methodologies, such as the Loss Development and Bornhuetter-Ferguson methods, were employed to develop estimates of ultimate Loss & LAE. Management’s ultimate selections were based on the internal actuarial review and a third party actuarial review based on data through September 2016. A rollforward, performed by the aforementioned third party, was completed through December, 2016 to determine if there have been any significant changes in development. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year.

Personal lines are primarily comprised of business acquired in the purchase of American Reliable, which occurred on January 1, 2015. The acquisition included the purchase of the business of the legal entity as well as additional books of business written by other Assurant entities. In addition, ceding arrangements subsequent to the date of the acquisition are not consistent with years prior to the acquisition. As a result, it is not practical, nor would it be consistent, to include information for years prior to 2015 in the development tables for Personal Lines.

Personal Lines cumulative claim frequency has been calculated at the claim level and includes claims closed without payment.

Personal Lines—Property

(Dollars in thousands)


	Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,				As of December 31, 2016
Accident Year	2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)
2015	$	139,508	$	137,611	$	3,299		16,182
2016				144,916		14,179		15,724

		Total	$	282,527

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Personal Lines—Property

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2015		2016
	(unaudited)
2015	$	109,953	$	133,093
2016				121,548

		Total		254,641
All outstanding liabilities before 2015, net of reinsurance				2,538

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance			$	30,424

The following is supplementary information about average historical claims duration as of December 31, 2016.


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2
Personal Lines—Property		81.9	%		16.8	%

Personal Lines—Casualty

(Dollars in thousands)


	Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,				As of December 31, 2016
Accident Year	2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)
2015	$	20,566	$	21,986	$	8,243		1,057
2016				23,390		16,465		745

		Total	$	45,376

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Personal Lines —Casualty

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2015		2016
	(unaudited)
2015	$	3,817	$	9,418
2016				3,795

		Total		13,213
All outstanding liabilities before 2015, net of reinsurance				11,338

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance			$	43,500

The following is supplementary information about average historical claims duration as of December 31, 2016:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2
Personal Lines—Casualty		16.8	%		25.5	%

Reinsurance Lines

Property & Casualty Methodologies

Reinsurance Operations internal reserve reviews were completed for loss and allocated loss adjustment expenses (ALAE) combined for run off treaties and the current book of business. The current book of business is constituted of professional liability portfolios and retrocessions from Bermuda based companies for property catastrophe, marine business, and mortgage insurance. The reserve reviews were completed based on the latest data reported from the cedants which is typically on a quarter lag. Paid loss, ALAE and Case reserves, shown in the reinsurance category tables below, which are originally based in a foreign currency, are remeasured in U.S. dollars based on the Foreign Exchange (FX) rate at the date the cedant’s report. Management’s ultimate selections were based on a review of ultimates reported from the cedants, a third party actuarial review based on data reported through September 2016, and loss emergence during the reporting period. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year.

The Company does not have direct access to claim frequency information underlying certain reinsurance contracts. As a result, the Company does not believe providing claim frequency information is practicable.

Reinsurance Lines—Property

(Dollars in thousands)


	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,														As of December 31, 2016
Accident Year	2010		2011		2012		2013		2014		2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2010	$	13,486	$	15,041	$	14,091	$	14,562	$	14,562	$	14,562	$	14,562	$	248		—
2011				30,963		28,547		26,916		25,994		24,994		24,912		1,194		—
2012						10,388		10,578		9,279		8,579		8,497		616		—
2013								15,153		9,948		8,197		6,698		1,008		—
2014										21,787		18,861		14,139		1,979		—
2015												19,877		16,738		7,364		—
2016														23,646		17,739		—

												Total	$	109,192

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Reinsurance Lines—Property

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2010		2011		2012		2013		2014		2015		2016
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2010	$	456	$	11,678	$	12,201	$	14,043	$	14,199	$	14,231	$	14,249
2011				12,044		19,274		20,698		22,060		22,426		22,771
2012						1,127		5,481		7,221		7,648		7,527
2013								723		4,008		5,835		5,111
2014										2,243		9,035		10,460
2015												742		5,163
2016														2,071

												Total		67,352
All outstanding liabilities before 2010, net of reinsurance														181

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance													$	42,021

The following is supplementary information about average historical claims duration as of December 31, 2016:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2			3			4			5			6			7
Reinsurance Lines—Property		14.9	%		46.8	%		13.4	%		3.1	%		0.4	%		0.8	%		0.1	%

Reinsurance Lines – Casualty

(Dollars in thousands)


	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of December 31, 2016
Accident Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		IBNR (1)		Cumulative Number of Reported Claims
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2007	$	3,645	$	6,396	$	6,359	$	6,351	$	6,352	$	4,705	$	4,931	$	4,931	$	3,894	$	3,944	$	529		—
2008				8,906		8,758		8,988		8,997		10,167		10,340		10,340		9,435		9,835		476		—
2009						20,706		23,818		25,444		30,533		30,850		31,340		31,419		31,453		391		—
2010								41,831		53,279		57,916		62,628		61,062		61,792		60,701		2,755		—
2011										45,726		48,846		44,692		47,980		46,510		43,657		2,860		—
2012												15,865		15,624		17,123		17,579		17,360		1,018		—
2013														1,224		1,262		1,172		1,013		927		—
2014																1,988		2,095		2,060		1,995		—
2015																		2,908		2,911		2,782		—
2016																				3,626		3,627		—

																		Total	$	176,560

(1)

Incurred-but-not-reported liabilities plus expected development on reported claims

Reinsurance Lines—Casualty

(Dollars in thousands)


	Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident Year	2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
2007	$	—	$	78	$	852	$	1,811	$	1,900	$	2,452	$	2,674	$	2,678	$	2,727	$	2,733
2008						627		1,955		5,149		5,648		6,832		8,713		8,875		8,919
2009						1,986		9,759		11,064		12,597		13,652		15,104		30,141		31,019
2010								10,185		21,447		30,754		36,090		39,123		55,315		55,848
2011										7,968		20,072		28,495		36,020		38,907		39,815
2012												5,312		9,435		11,658		15,534		15,696
2013														123		50		62		65
2014																88		47		50
2015																		107		128
2016																				—

																		Total	$	154,273
All outstanding liabilities before 2007, net of reinsurance																				—

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance																			$	22,287

The following is supplementary information about average historical claims duration as of December 31, 2016:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Year	1			2			3			4			5			6			7			8			9			10
Reinsurance Lines—Casualty		9.2	%		10.5	%		10.8	%		15.7	%		3.9	%		11.9	%		18.4	%		1.5	%		0.8	%		0.1	%

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in the consolidated balance sheets as of December 31, 2016 is as follows:


Net outstanding liabilities
Commercial Lines – Property	$	41,052
Commercial Lines – Casualty		311,274
Personal Lines – Property		30,424
Personal Lines – Casualty		43,500
Reinsurance Lines – Property		42,021
Reinsurance Lines – Casualty		22,287

Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance		490,558

Reinsurance recoverable on unpaid claims
Commercial Lines – Property	$	6,439
Commercial Lines – Casualty		76,956
Personal Lines – Property		39,708
Personal Lines – Casualty		5,352
Reinsurance Lines – Property		—
Reinsurance Lines – Casualty		237

Total reinsurance recoverable on unpaid claims		128,692

Other outstanding liabilities
Commercial Lines
Ceded Allowance		8,040
Unallocated claims adjustment expenses		17,795
Purchase accounting adjustment		(2,000	)
Loss Clearing		(910	)
Personal Lines
Fronted business ceded to Assurant		3,748
Unallocated claims adjustment expenses		4,685
Loss Clearing		(68	)
Reinsurance Lines
Unallocated claims adjustment expenses		646
Other		(144	)

Total other outstanding liabilities		31,792
Total gross liability for unpaid losses and loss adjustment expenses	$	651,042