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Reserve for Losses and Loss Adjustment Expenses
 9 Months Ended
Sep. 30, 2024
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]  
Reserve for losses and loss adjustment expenses
The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses:
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Reserve for losses and loss adjustment expenses at beginning of period
$24,466 $21,268 $22,752 $20,032 
Unpaid losses and loss adjustment expenses recoverable
7,083 6,394 6,690 6,280 
Net reserve for losses and loss adjustment expenses at beginning of period
17,383 14,874 16,062 13,752 
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year
2,524 1,793 6,324 5,012 
Prior years
(121)(146)(366)(403)
Total net incurred losses and loss adjustment expenses
2,403 1,647 5,958 4,609 
Net losses and loss adjustment expense reserves of acquired businesses (1) 2,413 — 2,463 — 
Net foreign exchange (gains) losses and other
246 (123)152 (24)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year
(362)(345)(647)(700)
Prior years
(967)(713)(2,872)(2,297)
Total net paid losses and loss adjustment expenses
(1,329)(1,058)(3,519)(2,997)
Net reserve for losses and loss adjustment expenses at end of period
21,116 15,340 21,116 15,340 
Unpaid losses and loss adjustment expenses recoverable
7,563 6,496 7,563 6,496 
Reserve for losses and loss adjustment expenses at end of period
$28,679 $21,836 $28,679 $21,836 
(1) Activity for the 2024 third quarter related to the acquisition of MCE (see note 2) and Watford Insurance Company (see note 16), while activity for the nine months ended September 30, 2024 also reflects the Company’s acquisition of RMIC Companies, Inc. and its wholly-owned subsidiaries (“RMIC”) that, together, comprise the run-off mortgage insurance business of Old Republic International Corporation.
Prior year development (“PYD”) arises from changes in loss estimates during the current period related to events occurring in prior calendar years. Long-tailed lines include lines of business that typically take many years for claims to settle such as third-party liability; short-tailed lines are those that settle more quickly such as property. The table below summarizes (favorable) and adverse net PYD by segment and tail length:
Three Months EndedNine Months Ended
(Favorable) AdverseSeptember 30,September 30,
2024Short-tailedLong-tailedTotalShort-tailedLong-tailedTotal
Insurance$(31)$15 $(16)$(61)$30 $(31)
Reinsurance(68)27 (41)(158)43 (115)
Mortgage(64)— (64)(220)— (220)
Total$(163)$42 $(121)$(439)$73 $(366)
2023
Insurance$(29)$19 $(10)$(74)$40 $(34)
Reinsurance(65)21 (44)(168)42 (126)
Mortgage(92)— (92)(243)— (243)
Total$(186)$40 $(146)$(485)$82 $(403)
2024 Third Quarter
The insurance segment’s short-tailed lines included $15 million of favorable development in property and marine, primarily from the 2012 and 2023 accident years (i.e., the year in which a loss occurred), and $11 million of favorable development in travel and accident, primarily from the 2023 accident year. Long tailed lines primarily included adverse development in programs, mainly from the 2023 accident year.
The reinsurance segment’s short-tailed lines included $35 million of favorable development from other specialty lines, primarily from the 2012 and subsequent underwriting years (i.e., all premiums and losses attributable to contracts having an inception or renewal date within the given 12 month period), and $20 million of favorable development from property other than property catastrophe, primarily from the 2022 and 2023 underwriting years. Long-tailed lines included $27 million of adverse development in casualty, primarily from the 2020 and 2022 underwriting years.
The mortgage segment’s favorable development was driven by reductions on reserves for delinquent loans associated with the U.S. first lien portfolio from the 2023 accident year. The Company’s credit risk transfer and international businesses also contributed to the favorable development.
2023 Third Quarter
The insurance segment’s short-tailed lines included $16 million of favorable development in property and marine, primarily from the 2021 and 2022 accident years. Long-tailed lines included $25 million of adverse development in professional liability, primarily from 2019 and 2020 accident years.
The reinsurance segment’s short-tailed lines included $29 million of favorable development in property other than property catastrophe, primarily from the 2020 to 2022 underwriting years, $22 million of favorable development in property catastrophe, primarily from the 2021 and 2022 underwriting years, and $19 million of favorable development in other specialty lines, primarily from the 2021 and prior underwriting years. Long-tailed lines included $21 million of adverse development in casualty, primarily from the 2016 to 2020 underwriting years.
The mortgage segment’s favorable development was driven by reserve releases associated with the U.S. first lien portfolio from the 2020 through 2022 accident years, with the credit risk transfer and international businesses also contributing.
Nine Months Ended September 30, 2024
The insurance segment’s short-tailed lines included $31 million of favorable development in surety, primarily from the 2007 and 2022 accident years, and $29 million of favorable development in travel and accident, primarily from the 2023 accident year. Net adverse development in long-tailed lines primarily included adverse development in programs, mainly from the 2023 accident year.
The reinsurance segment’s short-tailed lines included $72 million of favorable development from other specialty lines, primarily from the 2015 and subsequent underwriting years and $71 million of favorable development from property other than property catastrophe, primarily from the 2022 and 2023 underwriting years. Long-tailed lines included $43 million of adverse development in casualty, primarily from the 2017 and 2020 underwriting years.
The mortgage segment’s favorable development was driven by reserve releases associated with the U.S. first lien portfolio from the 2022 and 2023 accident years. The Company’s credit risk transfer and international businesses also contributed to the favorable development.
Nine Months Ended September 30, 2023
The insurance segment’s short-tailed lines included $44 million of favorable development in property and marine, primarily from the 2021 and 2022 accident years and $20 million of favorable development in warranty and lenders solutions, primarily from the 2022 accident year. Long-tailed lines included $48 million of adverse development in professional liability, primarily from the 2017 to 2020 accident years, partially offset by $24 million of favorable development in executive assurance, primarily from the 2019 and 2021 accident years.
The reinsurance segment’s short-tailed lines included $75 million of favorable development in property other than property catastrophe, primarily from the 2021 and 2022 underwriting years, $46 million in other specialty lines, primarily from the 2021 underwriting year, and $29 million of favorable development in property catastrophe, primarily from the 2019 and 2022 underwriting years. Long-tailed lines primarily included $39 million of adverse development in casualty, primarily from the 2014 to 2020 underwriting years.
The mortgage segment’s favorable development was driven by reserve releases associated with the U.S. first lien portfolio from the 2020 to 2022 accident years, with the credit risk transfer and international businesses also contributing.