Reserves

9 Months Ended

Sep. 30, 2018

Reserve Roll Forward

The following table provides a roll forward of the Company’s beginning and ending claims and benefits payable balances. Claims and benefits payable is the liability for unpaid loss and loss adjustment expenses and is comprised of case and incurred but not reported ("IBNR") reserves.

Since unpaid loss and loss adjustment expenses are estimates, the Company’s actual losses incurred may be more or less than the Company’s previously developed estimates, which is referred to as either unfavorable or favorable development, respectively.

The best estimate of ultimate loss and loss adjustment expense is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented.



	For the Nine Months Ended September 30,
	2018			2017
Claims and benefits payable, at beginning of period	$	3,782.2		$	3,301.2
Less: Reinsurance ceded and other	(3,193.3		)	(2,718.2		)
Net claims and benefits payable, at beginning of period	588.9			583.0
Acquired reserves as of Acquisition Date (1)	139.9			—
Incurred losses and loss adjustment expenses related to:
Current year	1,603.6			1,539.4
Prior years	(12.1		)	(54.3		)
Total incurred losses and loss adjustment expenses	1,591.5			1,485.1
Paid losses and loss adjustment expenses related to:
Current year	1,168.8			954.5
Prior years	398.6			327.8
Total paid losses and loss adjustment expenses	1,567.4			1,282.3
Net claims and benefits payable, at end of period	752.9			785.8
Plus: Reinsurance ceded and other	3,011.8			4,008.4
Claims and benefits payable, at end of period	$	3,764.7		$	4,794.2


(1)	Acquired reserves from TWG on May 31, 2018 (the Acquisition Date) include $420.5 million of gross claims and benefits payable and $280.6 million of ceded claims and benefits payable. The reserve roll forward includes the activity of TWG from June 1, 2018 to September 30, 2018.

The Company experienced favorable development in both nine month periods presented in the roll forward table above. Global Housing and Global Lifestyle contributed $10.8 million and $45.6 million to the net favorable development during the nine months ended September 30, 2018 and 2017, respectively. Global Housing experienced unfavorable development from Hurricane Maria in 2018, partially offset by favorable development on non-catastrophe losses. Development on catastrophes was unfavorable by $13.3 million and favorable by $5.2 million for the nine months ended September 30, 2018 and 2017, respectively. Excluding catastrophes, favorable development decreased for lender-placed homeowners products due to increased severity on fire claims associated with prior periods and an increase in losses related to the runoff of REO policies. Favorable development for Global Lifestyle decreased in the nine months ended September 30, 2018 from the comparable period in 2017 primarily from extended service contracts and credit insurance products. This reduction was attributable to changing mix of business and consideration of prior development trends. Certain of these contracts and products contain retrospective commission provisions that would result in offsetting underwriting, general and administrative increases or decrease in expense dependent on if the development were favorable or unfavorable. Assurant Health, subject to continuing

runoff, contributed $0.7 million in favorable development for the nine months ended September 30, 2018 compared to $8.2 million in the comparable 2017 period.