Liability for Unpaid Loss and Loss Adjustment Expense

6 Months Ended

Jun. 30, 2014

Liability for Unpaid Loss and Loss Adjustment Expense

Liability For Future Policy Benefits And Unpaid Claims Disclosure TextBlock

(5) Liability for Unpaid Loss and Loss Adjustment Expense

The table below provides a reconciliation of our liability for loss and loss adjustment expense payable (referred to as reserves).

		Six months ended June 30,				Three months ended June 30,
		2014		2013		2014		2013
Reserves at beginning of period		$	3,902,132	$	3,767,850	$	3,847,417	$	3,774,162
Less reinsurance recoverables on reserves			1,122,731		1,018,047		1,098,576		1,012,920
	Net reserves at beginning of period		2,779,401		2,749,803		2,748,841		2,761,242
Net loss and loss adjustment expense			648,938		672,171		327,094		339,474
Net loss and loss adjustment expense payments			(674,070)		(586,326)		(319,114)		(286,797)
Foreign currency adjustment			5,979		(24,627)		3,427		(2,898)
	Net reserves at end of period		2,760,248		2,811,021		2,760,248		2,811,021
Plus reinsurance recoverables on reserves			1,081,249		1,003,663		1,081,249		1,003,663
	Reserves at end of period	$	3,841,497	$	3,814,684	$	3,841,497	$	3,814,684

We recognized no loss development in the first six months or second quarter of 2014. In the first six months and second quarter of 2013, we recognized favorable development of $9.5million in our U.S. Surety & Credit segment and $2.3 million in our International segment. Our review of reserves in our U.S. Surety & Credit segment at that time indicated better experience than our actuarial expectations compared to the prior year review. As a result, we recognized favorable development of $3.7million and $5.8million for our surety and credit lines of business, respectively, related to the 2010 and prior underwriting years. In the International segment, we released catastrophe reserves related to the 2010 New Zealand earthquake, due to settlement of these claims in 2013.