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Reserve for Losses and Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 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:
Year Ended December 31,
202420232022
Reserve for losses and loss adjustment expenses at beginning of year$22,752 $20,032 $17,757 
Unpaid losses and loss adjustment expenses recoverable6,690 6,280 5,599 
Net reserve for losses and loss adjustment expenses at beginning of year16,062 13,752 12,158 
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year8,849 6,784 5,797 
Prior years(507)(538)(769)
Total net incurred losses and loss adjustment expenses8,342 6,246 5,028 
Net losses and loss adjustment expense reserves of acquired business (1)2,477 — — 
Foreign exchange (gains) losses and other(260)157 (293)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year(1,176)(1,081)(888)
Prior years(3,897)(3,012)(2,253)
Total net paid losses and loss adjustment expenses(5,073)(4,093)(3,141)
Net reserve for losses and loss adjustment expenses at end of year21,548 16,062 13,752 
Unpaid losses and loss adjustment expenses recoverable7,821 6,690 6,280 
Reserve for losses and loss adjustment expenses at end of year$29,369 $22,752 $20,032 
(1) Activity in the 2024 period primarily related to the MCE Acquisition (see note 2), along with acquisitions of Watford Insurance Company (see note 16) and RMIC Companies, Inc. and its wholly-owned subsidiaries (“RMIC”) that, together, comprise the run-off mortgage insurance business of Old Republic International Corporation.
Prior year development (“PYD”) arises from changes in loss estimates during the current period related to events occurring in prior calendar years. Long-tailed lines include lines of business that typically take many years for claims to settle such as third-party liability; short-tailed lines are those that settle more quickly such as property. The table below summarizes (favorable) and adverse net PYD by segment and tail length:
(Favorable) AdverseYear Ended December 31,
2024Short-tailedLong-tailedTotal
Insurance$(53)$16 $(37)
Reinsurance(232)44 (188)
Mortgage(282)— (282)
Total$(567)$60 $(507)
2023
Insurance$(85)$43 $(42)
Reinsurance(202)50 (152)
Mortgage(344)— (344)
Total$(631)$93 $(538)
2022
Insurance$(65)$40 $(25)
Reinsurance(195)5 (190)
Mortgage(554)— (554)
Total$(814)$45 $(769)
Year Ended December 31, 2024
The insurance segment’s short-tailed lines included $32 million of favorable development in travel and accident, primarily from the 2023 accident year, (i.e., the year in which a loss occurred), and $31 million of favorable development in surety, primarily from the 2007, 2022 and 2023 accident years. Net adverse development in long-tailed lines included adverse development in programs, mainly from the 2023 accident year.
The reinsurance segment’s short-tailed lines included $99 million of favorable development from property other than property catastrophe, primarily from the 2022 and 2023 underwriting years (i.e., all premiums and losses attributable to contracts having an inception or renewal date within the given 12 month period), $74 million of favorable development from other specialty lines, primarily from the 2015 to 2022 underwriting years, and $64 million of favorable development from property catastrophe, primarily from the 2020 to 2023 underwriting years. Long-tailed lines included $44 million of adverse development in casualty, primarily from the 2016, 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.
Year Ended December 31, 2023
The insurance segment’s short-tailed lines included $43 million of favorable development in property and marine, primarily from the 2021 and 2022 accident years, $22 million of favorable development in warranty and lenders solutions, primarily from the 2022 accident year, and $15 million of favorable development related to travel and accident business, primarily from the 2022 accident year. Long-tailed lines included $50 million of adverse development in professional liability, primarily from the 2017 to 2020 accident years.
The reinsurance segment’s short-tailed lines included $93 million of favorable development in property other than property catastrophe, primarily from the 2020 to 2022 underwriting years, $51 million of favorable development in property catastrophe, primarily from the 2019 to 2022 underwriting years, and $35 million from other specialty lines, primarily from the 2021 underwriting year. Long-tailed lines included $45 million of adverse development in casualty business, primarily from the 2013 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. The Company’s credit risk transfer and international businesses also contributed to the favorable development.
Year Ended December 31, 2022
The insurance segment’s short-tailed lines included $37 million of favorable development in warranty and lenders solutions, primarily from the 2021 accident year, and $15 million of favorable development related to travel and accident business, primarily from the 2021 accident year. Long-tailed lines included $25 million of adverse development in professional liability, primarily from the 2013 to 2015 and 2018 to 2020 accident years, and $18 million related to casualty business, primarily from the 2020 and 2021 accident years.
The reinsurance segment’s short-tailed lines included $109 million of favorable development from property other than property catastrophe business, primarily from the 2018 to 2021 underwriting years, $35 million from other specialty business, primarily from the 2016 and 2021 underwriting years, $28 million in marine and aviation lines, across most underwriting years, and $24 million of favorable development from property catastrophe business, primarily from the 2018 to 2020 underwriting years. Net adverse development in long-tailed lines included $5 million in casualty, spread across many prior underwriting years.
The mortgage segment’s favorable development was driven by reserve releases related to COVID-19 delinquencies associated with the U.S. first lien portfolio from the 2020 and 2021 accident years. The Company’s credit risk transfer, international, second lien and student loan businesses also contributed to the favorable development.