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Loss and Loss Adjustment Expense Reserves (Tables)
9 Months Ended
Sep. 30, 2011
Loss and Loss Adjustment Expense Reserves 
Loss and loss adjustment expense ("LAE") reserve activities

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

Millions

 

2011

 

2010

 

2011

 

2010

 

Gross beginning balance

 

$

5,642.4

 

$

6,198.1

 

$

5,736.8

 

$

6,379.2

 

Less beginning reinsurance recoverable on unpaid losses

 

(2,193.0

)

(2,748.3

)

(2,344.0

)

(2,771.5

)

Net loss and LAE reserves

 

3,449.4

 

3,449.8

 

3,392.8

 

3,607.7

 

 

 

 

 

 

 

 

 

 

 

Less: Beginning net loss and LAE reserves for AutoOne (1)

 

(58.6

)

(81.7

)

(68.2

)

(95.8

)

 

 

 

 

 

 

 

 

 

 

Loss and LAE reserves acquired — Central National

 

—

 

—

 

—

 

17.6

 

Loss and LAE reserves sold — OneBeacon Personal Lines (2)

 

—

 

—

 

—

 

(231.0

)

 

 

 

 

 

 

 

 

 

 

Loss and LAE incurred relating to:

 

 

 

 

 

 

 

 

 

Current year losses

 

307.8

 

284.7

 

972.2

 

1,244.9

 

Prior year losses

 

(30.7

)

(31.3

)

(58.2

)

(69.0

)

Total incurred losses and LAE

 

277.1

 

253.4

 

914.0

 

1,175.9

 

 

 

 

 

 

 

 

 

 

 

Accretion of fair value adjustment to loss and LAE reserves

 

2.1

 

2.1

 

6.2

 

6.3

 

Foreign currency translation adjustment to loss and LAE reserves

 

(25.5

)

39.9

 

5.7

 

6.7

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE paid relating to:

 

 

 

 

 

 

 

 

 

Current year losses

 

(112.8

)

(156.3

)

(237.9

)

(403.9

)

Prior year losses

 

(230.9

)

(211.8

)

(711.8

)

(788.1

)

Total loss and LAE payments

 

(343.7

)

(368.1

)

(949.7

)

(1,192.0

)

 

 

 

 

 

 

 

 

 

 

Plus: Ending net loss and LAE reserves for AutoOne (1)

 

—

 

82.9

 

—

 

82.9

 

 

 

 

 

 

 

 

 

 

 

Net ending balance

 

3,300.8

 

3,378.3

 

3,300.8

 

3,378.3

 

Plus ending reinsurance recoverable on unpaid losses

 

2,581.2

 

2,592.1

 

2,581.2

 

2,592.1

 

Gross ending balance

 

$

5,882.0

 

$

5,970.4

 

$

5,882.0

 

$

5,970.4

 

 

 

(1)

Adjustment is to present loss and LAE reserve activities from continuing operations. At September 30, 2011, loss and LAE reserves for AutoOne have been reclassified as liabilities held for sale.  Loss and LAE reserve balances for AutoOne prior to September 30, 2011 were not reclassified. See Note 14.

(2)

In the second quarter of 2010, $231.0 of net loss and LAE reserves related to the Personal Lines Transaction were reclassified to liabilities held for sale. The Personal Lines Transaction closed in July 2010.