Non-life and Life and Health Reserves (Tables)

12 Months Ended

Dec. 31, 2017

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

The Company’s gross liability for non-life reserves reported by cedants (case reserves) and those estimated by the Company (ACRs and IBNR reserves) at December 31, 2017 and 2016 was as follows (in thousands of U.S. dollars):



	December 31, 2017		December 31, 2016
Case reserves	$	4,176,879	$	3,883,926
ACRs	176,369		166,913
IBNR reserves	5,357,209		4,934,595
Non-life reserves	$	9,710,457	$	8,985,434

Reconciliation of the beginning and ending gross and net liability for non-life reserves

The reconciliation of the beginning and ending gross and net liability for non-life reserves for the years ended December 31, 2017, 2016 and 2015 was as follows (in thousands of U.S. dollars):



	2017			2016			2015
Gross liability at beginning of year	$	8,985,434		$	9,064,711		$	9,745,806
Reinsurance recoverable at beginning of year	266,742			189,234			214,349
Net liability at beginning of year	8,718,692			8,875,477			9,531,457
Net incurred losses related to:
Current year	3,022,926			2,997,394			3,023,704
Prior years	(448,158		)	(676,574		)	(830,705		)
	2,574,768			2,320,820			2,192,999
Change in Paris Re Reserve Agreement	(3,481		)	5,518			(8,771		)
Net paid losses related to:
Current year	396,927			331,785			250,720
Prior years	2,278,603			1,931,131			2,171,883
	2,675,530			2,262,916			2,422,603
Effects of foreign exchange rate changes	407,328			(220,207		)	(417,605		)
Net liability at end of year	9,021,777			8,718,692			8,875,477
Reinsurance recoverable at end of year	688,680			266,742			189,234
Gross liability at end of year	$	9,710,457		$	8,985,434		$	9,064,711

Net favorable prior year loss development by segment

The net favorable prior year loss development for each of the Company’s Non-life segments for the years ended December 31, 2017, 2016 and 2015 was as follows (in thousands of U.S. dollars):



	2017		2016		2015
P&C	$	204,172	$	389,672	$	473,564
Specialty	243,986		286,902		357,141
Total net favorable prior year loss development	$	448,158	$	676,574	$	830,705

Reconciliation losses and loss expenses

The reconciliation of the beginning and ending gross and net liability for life and health reserves for the years ended December 31, 2017and 2016 was as follows (in thousands of U.S. dollars):



	2017			2016
Gross liability at beginning of period	$	1,984,096		$	2,051,935
Reinsurance recoverable at beginning of period	31,372			42,773
Net liability at beginning of period	1,952,724			2,009,162
Liability acquired related to the acquisition of Aurigen	67,916			—
Net incurred losses	1,266,214			927,271
Net losses paid	(1,017,673		)	(844,156		)
Effects of foreign exchange rate changes	180,688			(139,553		)
Net liability at end of period	2,449,869			1,952,724
Reinsurance recoverable at end of period	40,605			31,372
Gross liability at end of period	$	2,490,474		$	1,984,096

Losses and loss expenses in the Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015 were comprised as follows (in thousands of U.S. dollars):



	2017		2016		2015
Non-life	$	2,574,768	$	2,320,820	$	2,192,999
Life and Health	1,266,214		927,271		964,421
Losses and loss expenses	$	3,840,982	$	3,248,091	$	3,157,420

Incurred and paid claims development and average annual percentage payout of incurred claims by age, net of reinsurance

The information presented below for incurred and paid claims development for each of the years ended December 31, 2012 through 2016 and the average annual percentage payout of incurred claims by age, net of reinsurance, is presented as supplementary information and is unaudited.



NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - NON-LIFE
For the year ended December 31,															December 31, 2017
Accident year	2012		2013		2014		2015		2016		2017				Total of IBNR plus expected development on reported claims
2012	$	2,685,454	$	2,493,810	$	2,336,917	$	2,228,953	$	2,196,626	$	2,227,260			$	156,038
2013			$	2,925,140	$	2,753,196	$	2,573,105	$	2,518,691	$	2,483,294			$	233,607
2014					2,882,914		2,664,647		2,551,470		2,518,203				319,931
2015							2,941,159		2,650,862		2,544,179				484,936
2016									2,978,955		2,743,531				771,217
2017											3,034,380		⁽¹	⁾	2,120,419
Total											$	15,550,847			$	4,086,148

NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - NON-LIFE
For the year ended December 31,
Accident year	2012		2013		2014		2015		2016		2017
2012	$	290,902	$	1,076,536	$	1,466,177	$	1,635,334	$	1,739,820	$	1,831,483
2013			$	249,309	$	1,320,171	$	1,679,371	$	1,883,432	$	2,015,049
2014					310,960		1,338,380		1,648,748		1,860,577
2015							310,031		1,247,343		1,655,681
2016									333,673		1,402,948
2017											397,053		⁽¹	⁾
Total											$	9,162,791

Net reserves for Accident Years and exposures included in the triangles											$	6,388,056
All outstanding liabilities before Accident Year 2012, net of reinsurance											2,070,569
Total outstanding liabilities for unpaid claims											$	8,458,625

AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - NON-LIFE
Years	1		2		3		4		5		6
Non-life	12%		39%		15%		8%		5%		4%

(1) The table above (and each of the three tables below for property, casualty and specialty) reflects losses incurred and paid losses translated to U.S. dollars at the exchange rate as of the balance sheet date whereas the losses and loss expenses in the Consolidated Statement of Operations reflected losses incurred at the average exchange rate for the period.



NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - PROPERTY
For the year ended December 31,													December 31, 2017
Accident year	2012		2013		2014		2015		2016		2017		Total of IBNR plus expected development on reported claims
2012	$	681,580	$	679,274	$	600,278	$	583,371	$	567,870	$	567,563	$	15,272
2013			704,000		600,178		566,525		550,840		546,345		4,825
2014					532,197		486,918		464,515		461,719		6,259
2015							609,235		567,709		542,180		17,187
2016									741,002		696,494		53,275
2017											1,033,194		530,918
Total											$	3,847,495	$	627,736

NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - PROPERTY
For the year ended December 31,
Accident year	2012		2013		2014		2015		2016		2017
2012	$	102,351	$	368,126	$	464,879	$	500,313	$	511,821	520,927
2013			91,935		351,048		456,511		491,978		510,813
2014					95,806		333,809		400,247		427,187
2015							97,678		365,650		456,828
2016									139,423		470,421
2017											225,385
Total											$	2,611,561

Net reserves for Accident Years and exposures included in the triangles											$	1,235,934
All outstanding liabilities before Accident Year 2012, net of reinsurance											201,339
Total outstanding liabilities for unpaid claims											$	1,437,273

AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - PROPERTY
Years	1		2		3		4		5		6
Property	20%		48%		17%		6%		3%		2%



NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - CASUALTY
For the year ended December 31,													December 31, 2017
Accident year	2012		2013		2014		2015		2016		2017		Total of IBNR plus expected development on reported claims
2012	$	701,087	$	687,470	$	659,934	$	618,750	$	600,969	$	608,547	$	102,999
2013			811,925		809,690		760,299		742,170		736,526		179,543
2014					912,442		889,241		869,428		874,583		252,944
2015							911,106		849,772		825,518		326,504
2016									866,772		818,954		426,472
2017											779,812		633,189
Total											$	4,643,940	$	1,921,651

NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - CASUALTY
For the year ended December 31,
Accident year	2012		2013		2014		2015		2016		2017
2012	$	52,976	$	138,628	$	209,006	$	282,401	$	338,800	397,768
2013			51,808		162,355		271,242		353,313		424,092
2014					72,127		212,462		317,277		418,218
2015							68,544		191,076		304,876
2016									35,901		168,303
2017											63,798
Total											$	1,777,055

Net reserves for Accident Years and exposures included in the triangles											$	2,866,885
All outstanding liabilities before Accident Year 2012, net of reinsurance											1,679,085
Total outstanding liabilities for unpaid claims											$	4,545,970

AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - CASUALTY
Years	1		2		3		4		5		6
Casualty	7%		15%		13%		12%		9%		10%



NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - SPECIALTY
For the year ended December 31,													December 31, 2017
Accident year	2012		2013		2014		2015		2016		2017		Total of IBNR plus expected development on reported claims
2012	$	1,302,787	$	1,127,066	$	1,076,705	$	1,026,832	$	1,027,787	$	1,051,150	$	37,767
2013			1,409,215		1,343,328		1,246,281		1,225,681		1,200,423		49,239
2014					1,438,275		1,288,488		1,217,527		1,181,901		60,728
2015							1,420,818		1,233,381		1,176,481		141,245
2016									1,371,181		1,228,083		291,470
2017											1,221,374		956,312
Total											$	7,059,412	$	1,536,761

NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - SPECIALTY
For the year ended December 31,
Accident year	2012		2013		2014		2015		2016		2017
2012	$	135,575	$	569,782	$	792,292	$	852,620	$	889,199	912,788
2013			105,566		806,768		951,618		1,038,141		1,080,144
2014					143,027		792,109		931,224		1,015,172
2015							143,809		690,617		893,977
2016									158,349		764,224
2017											107,870
Total											$	4,774,175

Net reserves for Accident Years and exposures included in the triangles											$	2,285,237
All outstanding liabilities before Accident Year 2012, net of reinsurance											190,145
Total outstanding liabilities for unpaid claims											$	2,475,382

AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - SPECIALTY
Years	1		2		3		4		5		6
Specialty	11%		50%		15%		7%		3%		2%

Reconciliation of net incurred and paid claims development to Non-life reserves

The reconciliation of the net incurred and paid claims development information above to the Non-life reserves in the Consolidated Balance Sheet at December 31, 2017 was as follows (in thousands of U.S. dollars):



	December 31, 2017
Total outstanding liability for unpaid claims
Property	$	1,437,273
Casualty	4,545,970
Specialty	2,475,382
Total outstanding liabilities for unpaid claims	$	8,458,625
Other liabilities⁽¹⁾	563,152
Net liability at end of year	$	9,021,777

Reinsurance recoverable on unpaid claims
Property	$	453,656
Casualty	40,920
Specialty	194,105
Reinsurance recoverable at end of year	$	688,680
Gross liability at end of year	$	9,710,457


(1)	Other liabilities included in the reconciliation relate primarily to the guaranteed reserves, described above, and unallocated loss expenses.