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Liability for Loss and LAE
 6 Months Ended
Jun. 30, 2022
Insurance [Abstract]  
Liability for Loss and LAE

5. Liability for Loss and LAE

(a) Liability Rollforward

The following table presents the activity in the liability for loss and LAE for the six months ended June 30, 2022 and 2021:

 

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

 

($ in millions)

 

Reserves as of January 1

 

$

14,357.6

 

 

$

12,970.6

 

Less: reinsurance recoverables(1)

 

 

2,026.1

 

 

 

1,703.7

 

Net reserves as of January 1

 

 

12,331.5

 

 

 

11,266.9

 

 

 

 

 

 

 

 

Other adjustments

 

 

(1.1

)

 

 

0.1

 

 

 

 

 

 

 

 

Incurred loss and LAE, net of reinsurance, related to:

 

 

 

 

 

 

Current year

 

 

2,082.6

 

 

 

2,340.8

 

Prior years

 

 

(101.7

)

 

 

(141.5

)

Total incurred loss and LAE, net of reinsurance

 

 

1,980.9

 

 

 

2,199.3

 

 

 

 

 

 

 

 

Paid loss and LAE, net of reinsurance, related to:(2)

 

 

 

 

 

 

Current year

 

 

200.0

 

 

 

298.0

 

Prior years

 

 

1,653.1

 

 

 

1,484.3

 

Total paid loss and LAE, net of reinsurance

 

 

1,853.1

 

 

 

1,782.3

 

 

 

 

 

 

 

 

Foreign currency exchange rate effect

 

 

(103.3

)

 

 

63.1

 

 

 

 

 

 

 

 

Net reserves as of June 30

 

 

12,354.9

 

 

 

11,747.1

 

Reinsurance recoverables as of June 30(1)

 

 

2,038.8

 

 

 

1,757.4

 

Reserves as of June 30

 

$

14,393.7

 

 

$

13,504.5

 

 

(1)
Reinsurance recoverables in this table include only ceded loss and LAE reserves.
(2)
Includes paid losses and LAE, net of reinsurance, related to commutations.

Gross loss and LAE reserves as of June 30, 2022 approximated gross loss and LAE as of December 31, 2021, primarily reflecting catastrophe and non-catastrophe losses incurred in the first six months of 2022, offset by payments on catastrophe losses incurred in prior years, and net favorable prior accident year loss reserve development.

(b) Liability Development

The following table presents the (favorable) unfavorable prior accident year loss reserve development, including from the Pandemic (defined in Note 9(a)), for the three and six months ended June 30, 2022 and 2021:

 

 

 

Three Months Ended
June 30,

 

 

 

Six Months Ended
June 30,

 

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

($ in millions)

Reinsurance Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Catastrophe events (excluding Pandemic)

 

$

(27.7

)

(1)

 

$

1.4

 

(2)

 

$

(30.1

)

(1)

 

$

(3.0

)

(3)

Pandemic

 

 

(5.4

)

 

 

 

17.8

 

 

 

 

(9.7

)

 

 

 

47.6

 

 

Non-catastrophe

 

 

(11.5

)

(4)

 

 

(23.0

)

(5)

 

 

(23.9

)

(4)

 

 

(34.6

)

(5)

Total

 

 

(44.6

)

 

 

 

(3.8

)

 

 

 

(63.7

)

 

 

 

10.0

 

 

Casualty & specialty:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Catastrophe events (excluding Pandemic)

 

 

5.3

 

 

 

 

0.1

 

 

 

 

3.6

 

 

 

 

(1.2

)

 

Pandemic

 

 

0.6

 

 

 

 

(18.5

)

 

 

 

1.5

 

 

 

 

(30.3

)

 

Non-catastrophe

 

 

(30.4

)

(6)

 

 

(54.2

)

(7)

 

 

(60.4

)

(6)

 

 

(108.3

)

(8)

Total

 

 

(24.5

)

 

 

 

(72.6

)

 

 

 

(55.3

)

 

 

 

(139.8

)

 

Total Reinsurance Segment

 

 

(69.1

)

 

 

 

(76.4

)

 

 

 

(119.0

)

 

 

 

(129.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSUI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casualty

 

 

10.7

 

(9)

 

 

(2.6

)

(10)

 

 

8.9

 

(9)

 

 

(3.7

)

(10)

Property and other

 

 

2.8

 

(11)

 

 

(6.7

)

(12)

 

 

(1.7

)

(13)

 

 

(8.3

)

(12)

Total

 

 

13.5

 

 

 

 

(9.3

)

 

 

 

7.2

 

 

 

 

(12.0

)

 

CapSpecialty

 

 

7.2

 

(14)

 

 

0.2

 

(15)

 

 

10.1

 

(14)

 

 

0.3

 

(15)

Total incurred related to prior years

 

$

(48.4

)

 

 

$

(85.5

)

 

 

$

(101.7

)

 

 

$

(141.5

)

 

 

(1)
Primarily reflects favorable prior accident year loss reserve development related to Hurricane Ida in the 2021 accident year.
(2)
Primarily reflects unfavorable prior accident year loss reserve development related to Hurricanes Laura and Sally in the 2020 accident year, partially offset by favorable prior accident year loss reserve development related to catastrophic events in earlier accident years.
(3)
Primarily reflects favorable prior accident year loss reserve development related to catastrophic events in the 2010, 2017 and 2018 accident years, partially offset by unfavorable prior accident year loss reserve development related to Hurricanes Laura and Sally in the 2020 accident year.
(4)
Primarily reflects favorable prior accident year loss reserve development in the 2018 through 2021 accident years.
(5)
Primarily reflects favorable prior accident year loss reserve development related to the 2019 and 2020 accident years.
(6)
Primarily reflects favorable prior accident year loss reserve development in the longer-tailed lines of business in the 2014 and prior accident years and shorter-tailed lines of business in the 2019 through 2020 accident years, partially offset by unfavorable prior accident year development in the longer-tailed lines of business in the 2016 through 2018 accident years.
(7)
Primarily reflects favorable prior accident year loss reserve development in the longer-tailed lines of business in the 2015 and earlier accident years, and the shorter-tailed lines of business in the 2016, 2018 and 2020 accident years.
(8)
Primarily reflects favorable prior accident year loss reserve development in the longer-tailed lines of business in the 2015 and earlier accident years, and the shorter-tailed lines of business in the 2019 and 2020 accident years.
(9)
Primarily reflects unfavorable prior accident year loss reserve development in the professional liability lines of business in the 2016 accident year and the general liability lines of business in the 2021 accident year.
(10)
Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2007 through 2014 accident years, partially offset by unfavorable prior accident year loss reserve development in the directors’ and officers’ liability lines of business in the 2013 and 2014 accident years and the binding authority lines of business in the 2011 through 2013 accident years.
(11)
Primarily reflects unfavorable prior accident year loss reserve development in non-catastrophe property losses in recent accident years, partially offset by favorable prior accident year loss reserve development related to catastrophe losses in the 2021 accident year.
(12)
Primarily reflects favorable prior accident year loss reserve development related to losses not classified as catastrophes in recent accident years and, to a lesser extent, catastrophes in the 2017 and 2018 accident years, partially offset by unfavorable prior accident year loss reserve development related to catastrophes in the 2020 accident year.
(13)
Primarily reflects favorable prior accident year loss reserve development related to catastrophe losses in the 2021 accident year, partially offset by unfavorable prior accident year loss reserve development in non-catastrophe property losses in recent accident years.
(14)
Primarily reflects unfavorable prior accident year loss reserve development in several casualty liability lines of business in the 2014 through 2019 accident years.
(15)
Primarily reflects unfavorable prior accident year loss reserve development related to several casualty lines of business.