Reserves for Losses and Loss Adjustment Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Reserves for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of reserves for losses and loss adjustment expenses (“LAE”):


	For the Nine Months Ended September 30,
(in millions)	2023		2022
Net reserves - beginning of the year	$	2,213.1	$	3,123.2


Add:
Losses and LAE incurred during current calendar year, net of reinsurance:
Current accident year	680.9		826.8
Prior accident years	126.0		31.6
Losses and LAE incurred during calendar year, net of reinsurance	806.9		858.4
Deduct:
Losses and LAE payments made during current calendar year, net of reinsurance:
Current accident year	94.9		112.0
Prior accident years	361.6		623.2
Losses and LAE payments made during current calendar year, net of reinsurance:	456.5		735.2
Add/(Deduct):
Divestitures (1)	24.4		(35.2)


Retroactive reinsurance (2)	21.7		—
Deferred gain on U.S. loss portfolio transfer, net of amortization	(16.8)		—
Syndicate 1200 loss portfolio transfer (for years of account 2018 and 2019) (3)	—		(175.5)
Change in participation interest (4)	—		32.2
Total net reserve adjustments	29.3		(178.5)
Foreign exchange adjustments	0.9		(10.6)
Net reserves - end of period	2,593.7		3,057.3
Add:
Reinsurance recoverables on unpaid losses and LAE, end of period	2,735.0		2,674.1
Gross reserves - end of period	$	5,328.7	$	5,731.4

(1)For the nine months ended September 30, 2023, the adjustment relates to the year-to-date activity of Syndicate 1200 and on reinsurance contracts with AUA subsidiaries. Refer to the sale of AUA in Note 1, “Business and Significant Accounting Policies” for additional information. For the nine months ended September 30, 2022, refer to the sale of Argo Seguros and AGSE in Note 1, “Business and Significant Accounting Policies” for additional information.

(2) In connection with the sale of AUA, the Company entered into two retroactive reinsurance agreements with AUA subsidiaries.

(3) Loss portfolio transfer on Syndicate 1200's reserves for the 2018 and 2019 years of account. Refer to Note 1, “Business and Significant Accounting Policies” for additional information.

(4) Amount represents the change in reserves due to changing our participation in Syndicates 1200 and 1910. For the nine months ended September 30, 2023, the balance has been reduced to zero as a result of the sale of AUA.

Impact from (Favorable) Unfavorable Development of Prior Accident Years’ Loss and LAE Reserves on Each Reporting Segment

The impact from the (favorable) unfavorable development of prior accident years’ loss and LAE reserves on each reporting segment is presented below:


	For the Nine Months Ended September 30,
(in millions)	2023		2022
U.S. Operations	$	111.7	$	27.9
International Operations	11.7		0.8
Run-off Lines	2.6		2.9
Total (favorable) unfavorable prior-year development	$	126.0	$	31.6