Reserves For Losses And Loss Expenses (Tables)

12 Months Ended

Dec. 31, 2011

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The table below provides a reconciliation of the beginning and ending reserve balances:



(Dollars in thousands)	2011			2010			2009
Net reserves at beginning of year	$	7,999,521		$	8,147,782		$	8,122,586
Net provision for losses and loss expenses:
Claims occuring during the current year(1)	2,791,860			2,509,933			2,518,849
Decrease in estimates for claims occurring in prior years(2)(3)	(181,282		)	(253,248		)	(234,008		)
Loss reserve discount accretion	47,787			53,182			51,866
Total	2,658,365			2,309,867			2,336,707
Net payments for claims:
Current year	765,440			641,570			582,605
Prior year	1,721,558			1,811,507			1,751,026
Total	2,486,998			2,453,077			2,333,631
Foreign currency translation	1,224			(5,051		)	22,120
Net reserves at end of year	8,172,112			7,999,521			8,147,782
Ceded reserve at end of year	1,165,022			1,017,028			923,889
Gross reserves at end of year	$	9,337,134		$	9,016,549		$	9,071,671

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(1)	Claims occurring during the current year are net of loss reserve discounts of $43,286,000, $67,763,000 and $80,455,000 in 2011, 2010 and 2009, respectively.


(2)	The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $182,937,000, $246,941,000 and $232,040,000 in 2011, 2010 and 2009, respectively.


(3)	For certain retrospectively rated insurance polices and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable reserve development, net of additional and return premiums, was $182 million, $234 million and $190 million in 2011, 2010 and 2009, respectively.

- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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