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Non-life Reserves
 12 Months Ended
Dec. 31, 2023
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]  
Non-life Reserves Non-life Reserves
Non-life reserves are categorized into three types of reserves: case reserves, ACRs and IBNR reserves. Case reserves represent unpaid losses reported by the Company’s cedants and recorded by the Company. ACRs are established for particular circumstances where, on the basis of individual loss reports, the Company estimates that the particular loss or collection of losses covered by a treaty may be greater than those advised by the cedant. IBNR reserves represent a provision for claims that have been incurred but not yet reported to the Company, as well as future loss development on losses already reported, in excess of the case reserves and ACRs. See also Note 2(b). The Company’s gross liability for non-life reserves at December 31, 2023 and 2022 was as follows (in thousands of U.S. dollars):
December 31, 2023December 31, 2022
Case reserves$5,148,325 $5,110,575 
ACRs190,071 159,821 
IBNR reserves7,812,913 7,455,235 
Non-life reserves$13,151,309 $12,725,631 
The reconciliation of the beginning and ending gross and net liability for non-life reserves for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands of U.S. dollars): 
202320222021
Gross liability at beginning of year$12,725,631 $12,047,792 $11,395,321 
Reinsurance recoverable at beginning of year1,851,811 1,532,666 782,330 
Net liability at beginning of year10,873,820 10,515,126 10,612,991 
Net incurred losses related to:
Current year3,229,633 3,533,087 3,637,671 
Prior years(47,293)(219,853)(194,426)
3,182,340 3,313,234 3,443,245 
Net paid losses related to:
Current year(416,151)(419,633)(437,938)
Prior years(2,316,451)(2,238,503)(2,535,057)
(2,732,602)(2,658,136)(2,972,995)
Retroactive reinsurance recoverable adjustment(93,378)(35,695)(357,864)
Effects of foreign exchange rate changes and other155,882 (260,709)(210,251)
Net liability at end of year11,386,062 10,873,820 10,515,126 
Reinsurance recoverable at end of year1,765,247 1,851,811 1,532,666 
Gross liability at end of year$13,151,309 $12,725,631 $12,047,792 
Prior Years' Reserve Development
For the year ended December 31, 2023, the Company reported net favorable loss development for prior accident years resulting from favorable loss emergence in both the P&C and Specialty segments. The favorable loss emergence within the P&C segment was across multiple accident years, mainly driven by the catastrophe and U.S. health business, partially offset by adverse loss emergence in the casualty business. The favorable loss emergence within the Specialty segment was across multiple accident years, predominantly from the financial risks, agriculture, and multiline business, which was partially offset by adverse loss emergence in the aviation and marine business.
For the year ended December 31, 2022, the Company reported net favorable loss development for prior accident years resulting from favorable loss emergence in both the P&C and Specialty segments and a reduction in unallocated loss adjustment expenses. The favorable loss emergence within the P&C segment was across multiple accident years, mainly driven by the motor, catastrophe, and casualty business. The favorable loss emergence within the Specialty segment was across multiple accident years, predominantly from the financial risks, engineering, marine, and property business, which was partially offset by adverse loss emergence in the aviation business.
For the year ended December 31, 2021, the Company reported net favorable loss development for prior accident years resulting from favorable loss emergence in both the P&C and Specialty segments. The favorable loss emergence within the Specialty segment was across multiple accident years, predominantly from financial risks lines. The favorable loss emergence within the P&C segment was primarily from a refinement of loss estimates for certain large catastrophic events from accident years 2017 - 2019.
Retroactive Reinsurance Recoverable
During the second quarter of 2021, the Company entered into a loss portfolio transfer and adverse development cover agreement related to prior underwriting years on the Company's U.S. casualty and auto business within the P&C segment. Premium paid for the loss portfolio transfer and adverse development cover agreement resulted in a cash transfer for the premium at inception of the agreement, and a reinsurance recoverable of $485 million at December 31, 2023 and $394 million at December 31, 2022. At December 31, 2023 and 2022, as a result of adverse prior years reserve development ceded under this agreement, a deferred gain of $99 million and $47 million, respectively, was recorded in Accounts payable, accrued expense and other in the Consolidated Balance Sheets. This transaction is presented retrospectively in the net loss and loss expenses incurred development table for the casualty business below. Reinsurance recoveries under this transaction are attributed to calendar year and accident year based on the underlying distribution of losses subject to the agreement.
Asbestos and Environmental Claims
The Company’s net non-life reserves at December 31, 2023 and 2022 included $40 million and $42 million, respectively, related to asbestos and environmental claims. The gross liability for such claims at December 31, 2023 and 2022 was $47 million and $49 million, respectively.
Ultimate loss estimates for such claims cannot be estimated using traditional reserving techniques and there are significant uncertainties in estimating the Company’s potential losses for these claims. In view of the legal and tort environment that affect the development of such claims, the uncertainties inherent in estimating asbestos and environmental claims are not likely to be resolved in the near future. There can be no assurance that the reserves established by the Company will not be adversely affected by development of other latent exposures, and further, there can be no assurance that the reserves established by the Company will be adequate. The Company does, however, actively evaluate potential exposure to asbestos and environmental claims and establishes additional reserves as appropriate. The Company believes that it has made a reasonable provision for these exposures and is unaware of any specific issues that would materially affect its unpaid losses and loss expense reserves related to this exposure.
Non-life reserving methods
The reserving methods commonly employed by the Company are summarized as follows:
Chain Ladder (CL) Development Methods (Reported or Paid)
These methods use the underlying assumption that losses reported (paid) for each underwriting year at a particular development stage follow a stable pattern. The CL development method assumes that on average, every underwriting year will display the same percentage of ultimate liabilities reported by the Company’s cedants at 24 months after the inception of the underwriting year. The percentages reported (paid) are established for each development stage after examining historical averages from the loss development data. These are sometimes supplemented by external benchmark information. Ultimate liabilities are estimated by multiplying the actual reported (paid) losses by the reciprocal of the assumed reported (paid) percentage. Reserves are then calculated by subtracting paid claims from the estimated ultimate liabilities.
Expected Loss Ratio (ELR) Method
This method estimates ultimate losses for an underwriting year by applying an estimated loss ratio to the earned premium for that underwriting year. Although the method is insensitive to actual reported or paid losses, it can often be useful at the early stages of development when very few losses have been reported or paid, and the principal sources of information available to the Company consist of information obtained during pricing and qualitative information supplied by the cedant. However, the lack of sensitivity to reported or paid losses means that the method is usually inappropriate at later stages of development.
Bornhuetter-Ferguson (B-F) Methods (Reported or Paid)
These methods aim to address the variability at early stages of development and incorporates external information such as pricing. The B-F methods are more sensitive to reported and paid losses than the ELR method, and can be seen as a blend of the ELR and CL development methods. Unreported (unpaid) claims are calculated using an expected reporting (payment) pattern and an externally determined estimate of ultimate liabilities (usually determined by multiplying an a priori loss ratio with estimates of premium volume). The accuracy of the a priori loss ratio is a critical assumption in this method. Usually a priori loss ratios are initially determined on the basis of pricing information, but may also be adjusted to reflect other information that subsequently emerges about underlying loss experience.
Loss Event Specific Method
The ultimate losses estimated under this method are derived from estimates of specific events based on reported claims, client and broker discussions, review of potential exposures, market loss estimates, modeled analysis and other event specific criteria.
Method Weights
In determining the loss reserves, the Company often relies on a blend of the results from two or more methods (e.g., weighted averages). The judgment as to which of the above method(s) is most appropriate for a particular underwriting year and reserving cell could change over time as new information emerges regarding underlying loss activity and other data issues. Furthermore, as each line is typically composed of several reserving cells, it is likely that the reserves for the line will be dependent on several reserving methods. This is because reserves for a line are the result of aggregating the reserves for each constituent reserving cell and that a different method could be selected for each reserving cell.
The principal reserving methods used for each of the Specialty segment and P&C segment were ELR, Reported/Paid B-F, and Reported/Paid CL, with the exception of catastrophe risks within the P&C segment where the principal reserving methods used were ELR based on exposure analysis and loss event specific methods.
Non-life net incurred and paid losses and loss expense development
The net incurred and paid losses and loss expenses development by accident year for each of the years ended December 31, 2014 through 2023, and the total of IBNR plus expected development on reported claims included within the net incurred claims amounts, as at each of the years ended December 31, 2014 through 2023, are presented in the tables below (in thousands of U.S. dollars). The tables below reflect 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 Statements of Operations reflect losses incurred at the average exchange rate for the period.
The reconciliation of the net incurred and paid claims development information below to the Non-life reserves in the Consolidated Balance Sheet at December 31, 2023 was as follows (in thousands of U.S. dollars):
December 31, 2023
Total outstanding liability for unpaid claims
Property$1,908,065 
Casualty6,176,122 
Specialty3,011,789 
Total outstanding liabilities for unpaid claims$11,095,976 
Unallocated loss expenses130,717 
U.S. health net reserves (1)
156,570 
Other2,799 
Total other liabilities$290,086 
Net liability at end of year$11,386,062 
Reinsurance recoverable on unpaid claims
Property$763,028 
Casualty698,223 
Specialty303,996 
Reinsurance recoverable at end of year$1,765,247 
Gross liability at end of year$13,151,309 
(1) U.S. health business is not meaningful to include in the development tables as the estimated average duration of the health reserves is less than one year and substantially all claims are expected to be paid within two years, based on historical payout patterns.
NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - NON-LIFE
For the year ended December 31,December 31, 2023
Accident year2014201520162017201820192020202120222023Total of IBNR plus expected development on reported claims
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$2,481,720 $2,514,200 $2,368,967 $2,349,869 $2,353,759 $2,315,021 $2,277,135 $2,262,546 $2,232,454 $2,233,339 $50,959 
20152,502,854 2,611,184 2,527,784 2,550,830 2,520,182 2,475,960 2,451,141 2,432,324 2,435,356 87,537 
20162,451,204 2,559,851 2,516,126 2,486,199 2,467,920 2,484,069 2,476,383 2,472,778 95,112 
20172,549,737 2,801,179 2,698,916 2,651,730 2,663,904 2,658,571 2,660,319 159,021 
20182,596,552 2,974,243 2,969,810 2,972,766 3,009,359 3,015,217 334,532 
20192,931,280 3,519,556 3,510,991 3,523,443 3,531,407 637,205 
20204,186,395 3,586,462 3,499,097 3,480,994 859,604 
20212,880,141 2,829,876 2,836,450 1,435,501 
20223,410,844 3,374,321 1,723,904 
20233,115,830 967,607 
Total$29,156,011 $6,350,982 
NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - NON-LIFE
For the year ended December 31,
Accident year2014201520162017201820192020202120222023
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$336,270 $1,291,273 $1,594,146 $1,810,171 $1,946,054 $2,044,804 $2,118,939 $2,164,676 $2,196,720 $2,243,258 
2015306,562 1,159,655 1,564,173 1,798,537 1,959,722 2,067,935 2,142,234 2,198,481 2,240,255 
2016321,351 1,272,443 1,627,697 1,893,694 2,030,728 2,123,169 2,211,977 2,302,984 
2017394,394 1,421,140 1,804,959 2,072,838 2,195,236 2,314,529 2,436,391 
2018271,827 1,276,542 1,811,055 2,093,543 2,283,931 2,490,887 
2019462,939 1,438,793 1,961,928 2,341,116 2,640,483 
2020480,122 1,277,034 1,805,063 2,106,017 
2021373,191 1,088,143 1,531,660 
2022394,598 914,038 
2023397,510 
Total$19,303,483 
Net reserves for accident years and exposures included in the triangles$9,852,528 
All outstanding liabilities before accident year 2014, net of reinsurance
1,243,448 
Total outstanding liabilities for unpaid claims$11,095,976 
AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - NON-LIFE (unaudited)
Years12345678910
Non-life13%29%15%10%6%5%4%3%2%2%
NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - PROPERTY
For the year ended December 31,December 31, 2023
Accident year2014201520162017201820192020202120222023Total of IBNR plus expected development on reported claims
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$469,568 $488,446 $463,409 $458,609 $452,907 $450,487 $447,816 $447,894 $444,808 $445,152 $298 
2015537,193 565,816 537,792 528,106 524,147 519,568 525,203 523,475 524,453 3,605 
2016663,490 681,050 644,349 625,873 622,562 624,375 623,593 620,491 8,045 
2017971,607 1,022,186 952,613 923,025 915,166 910,105 909,849 12,314 
2018805,960 820,675 799,735 778,867 766,591 766,684 16,456 
2019703,097 782,453 720,079 711,928 714,189 32,277 
20201,252,575 1,070,935 1,061,772 1,056,274 132,920 
2021919,517 918,629 914,749 253,718 
2022944,920 859,807 457,178 
2023415,801 334,152 
Total$7,227,449 $1,250,963 
NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - PROPERTY
For the year ended December 31,
Accident year2014201520162017201820192020202120222023
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$95,013 $323,309 $395,102 $423,339 $432,567 $438,152 $442,581 $444,798 $445,375 $448,276 
201585,015 330,876 435,539 469,036 481,879 489,195 498,557 501,524 503,399 
2016132,914 446,804 538,988 579,381 595,159 604,980 609,257 613,854 
2017214,026 694,240 805,627 853,945 862,942 870,638 882,726 
201881,830 494,608 628,458 666,919 687,439 709,211 
201978,527 426,566 545,163 586,587 627,924 
2020115,165 515,030 681,851 772,952 
2021121,453 491,546 639,577 
2022103,876 279,970 
202391,499 
Total$5,569,388 
Net reserves for accident years and exposures included in the triangles$1,658,061 
All outstanding liabilities before accident year 2014, net of reinsurance
250,004 
Total outstanding liabilities for unpaid claims$1,908,065 
AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - PROPERTY (unaudited)
Years12345678910
Property 15%41%16%6%3%2%1%1%—%1%
NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - CASUALTY
For the year ended December 31,December 31, 2023
Accident year2014201520162017201820192020202120222023Total of IBNR plus expected development on reported claims
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$804,571 $848,698 $814,622 $810,349 $826,000 $791,768 $766,415 $753,383 $739,605 $740,555 $34,090 
2015699,327 783,275 761,091 803,497 770,242 751,652 726,451 714,608 717,382 57,407 
2016670,767 756,954 767,366 747,814 740,047 750,268 747,402 747,434 61,476 
2017621,095 743,114 720,966 709,881 716,862 720,732 724,138 94,614 
2018767,559 905,491 895,978 903,353 920,169 927,658 236,104 
2019999,955 1,226,210 1,272,980 1,273,687 1,282,398 494,696 
20201,344,430 1,115,751 1,094,890 1,086,082 601,415 
20211,013,896 967,726 987,435 886,905 
20221,495,131 1,561,575 888,080 
20231,698,981 326,606 
Total$10,473,638 $3,681,393 
NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - CASUALTY
For the year ended December 31,
Accident year2014201520162017201820192020202120222023
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$69,119 $189,458 $292,152 $387,182 $470,964 $536,883 $594,035 $631,367 $654,893 $692,148 
201573,252 184,520 303,213 398,790 505,067 577,907 627,964 667,748 702,472 
201628,304 140,081 244,560 369,651 455,982 520,069 586,050 667,058 
201755,617 157,792 246,615 334,296 411,806 488,164 596,996 
201859,105 201,190 323,510 425,887 532,717 699,190 
2019100,639 274,821 430,192 580,304 731,677 
2020112,281 176,740 304,592 410,337 
202180,434 225,846 329,578 
2022120,660 173,769 
2023171,996 
Total$5,175,221 
Net reserves for accident years and exposures included in the triangles$5,298,417 
All outstanding liabilities before accident year 2014, net of reinsurance
877,705 
Total outstanding liabilities for unpaid claims$6,176,122 
AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - CASUALTY (unaudited)
Years12345678910
Casualty9%12%13%12%12%11%10%7%4%5%
NET INCURRED LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - SPECIALTY
For the year ended December 31,December 31, 2023
Accident year2014201520162017201820192020202120222023Total of IBNR plus expected development on reported claims
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$1,207,581 $1,177,056 $1,090,936 $1,080,911 $1,074,852 $1,072,766 $1,062,904 $1,061,269 $1,048,041 $1,047,632 $16,571 
20151,266,334 1,262,093 1,228,901 1,219,227 1,225,793 1,204,740 1,199,487 1,194,241 1,193,52126,525 
20161,116,947 1,121,847 1,104,411 1,112,512 1,105,311 1,109,426 1,105,388 1,104,85325,591 
2017957,035 1,035,879 1,025,337 1,018,824 1,031,876 1,027,734 1,026,33252,093 
20181,023,033 1,248,077 1,274,097 1,290,546 1,322,599 1,320,87581,972 
20191,228,228 1,510,893 1,517,932 1,537,828 1,534,820110,232 
20201,589,390 1,399,776 1,342,435 1,338,638125,269 
2021946,728 943,521 934,266294,878 
2022970,793 952,939378,646 
20231,001,048306,849 
Total$11,454,924 $1,418,626 
NET PAID LOSSES AND LOSS EXPENSES DEVELOPMENT TABLE - SPECIALTY
For the year ended December 31,
Accident year2014201520162017201820192020202120222023
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
2014$172,138 $778,506 $906,892 $999,650 $1,042,523 $1,069,769 $1,082,323 $1,088,511 $1,096,452 $1,102,834 
2015148,295 644,259 825,421 930,711 972,776 1,000,833 1,015,713 1,029,209 1,034,384 
2016160,133 685,558 844,149 944,662 979,587 998,120 1,016,670 1,022,072 
2017124,751 569,108 752,717 884,597 920,488 955,727 956,669 
2018130,892 580,744 859,087 1,000,737 1,063,775 1,082,486 
2019283,773 737,406 986,573 1,174,225 1,280,882 
2020252,676 585,264 818,620 922,728 
2021171,304 370,751 562,505 
2022170,062 460,299 
2023134,015 
Total$8,558,874 
Net reserves for accident years and exposures included in the triangles$2,896,050 
All outstanding liabilities before accident year 2014, net of reinsurance
115,739 
Total outstanding liabilities for unpaid claims$3,011,789 
AVERAGE ANNUAL PERCENTAGE PAYOUT OF INCURRED CLAIMS BY AGE, NET OF REINSURANCE - SPECIALTY (unaudited)
Years12345678910
Specialty15%36%17%10%4%2%1%1%1%1%
The Company is predominantly a reinsurer of primary insurers and does not have access to claim frequency information held by its cedants due to the majority of the Company’s business being written on a proportional basis. As such, the Company considers it impracticable to disclose information on the frequency of claims.