The Company believes the most significant accounting judgment made by management is its estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts the Company sells. The Company establishes its claims and claim expense reserves by taking claims reported to the Company by insureds and ceding companies, but which have not yet been paid (“case reserves”), adding estimates for the anticipated cost of claims incurred but not yet reported to the Company, or incurred but not enough reported to the Company (collectively referred to as “IBNR”) and, if deemed necessary,

adding costs for additional case reserves which represent the Company’s estimates for claims related to specific contracts previously reported to the Company which it believes may not be adequately estimated by the client as of that date, or adequately covered in the application of IBNR.




At March 31, 2020	Case Reserves		Additional Case Reserves		IBNR		Total
Property	$	1,095,840	$	1,707,754	$	958,827	$	3,762,421
Casualty and Specialty	1,644,402		105,505		3,894,049		5,643,956
Other	330		—		—		330
Total	$	2,740,572	$	1,813,259	$	4,852,876	$	9,406,707

At December 31, 2019
Property	$	1,253,406	$	1,631,223	$	1,189,221	$	4,073,850
Casualty and Specialty	1,596,426		129,720		3,583,913		5,310,059
Other	440		—		—		440
Total	$	2,850,272	$	1,760,943	$	4,773,134	$	9,384,349

Activity in the liability for unpaid claims and claim expenses is summarized as follows:




Three months ended March 31,	2020			2019
Net reserves as of beginning of period	$	6,593,052		$	3,704,050
Net incurred related to:
Current year	557,054			231,341
Prior years	13,900			(4,306		)
Total net incurred	570,954			227,035
Net paid related to:
Current year	31,201			8,149
Prior years	436,286			300,120
Total net paid	467,487			308,269
Amounts acquired (1)	—			1,858,775
Foreign exchange (2)	(55,395		)	1,550
Net reserves as of end of period	6,641,124			5,483,141
Reinsurance recoverable as of end of period	2,765,583			2,908,343
Gross reserves as of end of period	$	9,406,707		$	8,391,484

The Company’s estimates of claims and claim expense reserves are not precise in that, among other things, they are based on predictions of future developments and estimates of future trends and other variable factors. Some, but not all, of the Company’s reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are numerous factors that affect reserves and claims payments that cannot be determined with certainty in advance, the Company’s ultimate payments will vary, perhaps materially, from its estimates of reserves. If the Company determines in a subsequent period that adjustments to its previously established reserves are appropriate, such adjustments are recorded in the

period in which they are identified. On a net basis, the Company’s cumulative favorable or unfavorable development is generally reduced by offsetting changes in its reinsurance recoverables, as well as changes to loss related premiums such as reinstatement premiums and redeemable noncontrolling interest, all of which generally move in the opposite direction to changes in the Company’s ultimate claims and claim expenses.

The following table details the Company’s prior year development by segment of its liability for unpaid claims and claim expenses:




Three months ended March 31,	2020			2019
	(Favorable) adverse development			(Favorable) adverse development
Property	$	14,008		$	1,877
Casualty and Specialty	(1		)	(6,202		)
Other	(107		)	19
Total net adverse (favorable) development of prior accident years net claims and claim expenses	$	13,900		$	(4,306	)

Changes to prior year estimated claims reserves decreased net income by $13.9 million during the three months ended March 31, 2020 (2019 - increased net income by $4.3 million), excluding the consideration of changes in reinstatement, adjustment or other premium items, profit commissions, redeemable noncontrolling interests and income tax.

The following tables detail the development of the Company’s liability for unpaid claims and claim expenses for its Property segment, allocated between large and small catastrophe net claims and claim expenses and attritional net claims and claim expenses, included in the other line item:




Three months ended March 31,	2020
	(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
2019 Large Loss Events	$	(19,681	)
2018 Large Loss Events	(14,200		)
2017 Large Loss Events	(6,237		)
Other	8,027
Total large catastrophe events	(32,091		)
Small catastrophe events and attritional loss movements
Other small catastrophe events and attritional loss movements	46,099
Total small catastrophe events and attritional loss movements	46,099
Total net adverse development of prior accident years net claims and claim expenses	$	14,008

The net adverse development of prior accident years net claims and claim expenses within the Company’s Property segment in the three months ended March 31, 2020 of $14.0 million was comprised of net adverse development of $54.1 million primarily within the Company’s other property class of business and principally driven by higher than expected attritional losses related to lines of business where the Company principally estimates net claims and claim expenses using traditional actuarial methods, combined with the impact of certain of the Company’s whole account ceded protections. Partially offsetting this adverse development was favorable development on prior accident years net claims and claim expenses associated with the following large catastrophe events:




Three months ended March 31,	2019
	(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
2017 Large Loss Events	$	(10,918	)
Other	(1,374		)
Total large catastrophe events	(12,292		)
Small catastrophe events and attritional loss movements
Other small catastrophe events and attritional loss movements	14,169
Total small catastrophe events and attritional loss movements	14,169
Total catastrophe and attritional net claims and claim expenses	1,877
Total net adverse development of prior accident years net claims and claim expenses	$	1,877

The net adverse development of prior accident years net claims and claim expenses within the Company’s Property segment in the three months ended March 31, 2019 of $1.9 million was principally comprised of net adverse development of $14.2 million related to small catastrophe events and attritional loss movements and partially offset by net favorable development of $10.9 million related to the 2017 Large Loss Events.

The following table details the development of the Company’s liability for unpaid claims and claim expenses for its Casualty and Specialty segment:




Three months ended March 31,	2020			2019
	(Favorable) adverse development			(Favorable) adverse development
Actuarial methods	$	(1	)	$	(6,202	)
Total net favorable development of prior accident years net claims and claim expenses	$	(1	)	$	(6,202	)

The net favorable development of prior accident years net claims and claim expenses within the Company’s Casualty and Specialty segment of $1 thousand in the three months ended March 31, 2020 was due to reported losses generally coming in as expected on attritional net claims and claim expenses.

The net favorable development of prior accident years net claims and claim expenses within the Company’s Casualty and Specialty segment was $6.2 million in the three months ended March 31, 2019 driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses and