Liability for Loss and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2011

Activity in Liability for Loss and Loss Adjustment Expenses

Activity in liability for loss and LAE in 2011, 2010 and 2009 is summarized as follows (in millions):


	2011			2010			2009
Reserves as of January 1	$	2,328.7		$	2,521.0		$	2,578.6
Less: reinsurance recoverables*		847.4			947.7			1,008.3

Net reserves		1,481.3			1,573.3			1,570.3

Incurred loss, net of reinsurance, related to:
Current year		455.8			411.6			460.0
Prior years		(25.8	)		(33.7	)		(17.9	)

Total incurred loss, net of reinsurance		430.0			377.9			442.1

Paid loss, net of reinsurance, related to:
Current year		84.4			81.2			83.5
Prior years		345.7			388.7			355.6

Total paid loss, net of reinsurance		430.1			469.9			439.1

Reserves, net of reinsurance recoverables, as of December 31		1,481.2			1,481.3			1,573.3
Reinsurance recoverables as of December 31*		831.8			847.4			947.7

Reserves, gross of reinsurance recoverables, as of December 31	$	2,313.0		$	2,328.7		$	2,521.0

*	Reinsurance recoverables in this table include only ceded loss reserves.

Summary of Increases (Decreases) to Prior Year Net Reserves Included in Reserve Changes

The above reserve changes included (decreases) increases prior year net reserves, which are summarized as follows (in millions):


	2011			2010
RSUI:
Net casualty reserve (releases)	$	(56.2	)	$	(33.9	)
Property and other, net		(3.3	)		(9.3	)

	$	(59.5	)	$	(43.2	)
CATA:
Net insurance reserve increases (releases)	$	5.0		$	(0.4	)
Reinsurance assumed reserve release		—			(3.5	)

	$	5.0		$	(3.9	)
PCC:
Net workers’ compensation increases	$	28.4		$	12.5
All other, net		0.3			0.9

	$	28.7		$	13.4
Total incurred related to prior years	$	(25.8	)	$	(33.7	)

Prior Accident Year Workers' Compensation Net Loss Reserves


	Three months ended:				Twelve months ended
	June 30, 2011		December 31, 2011		December 31, 2011
Adverse claims emergence	$	10.0	$	4.2	$	14.2
Increases in allocated LAE		3.0		6.4		9.4
Increases in unallocated LAE		—		2.8		2.8
Decrease in ceded loss and LAE reserves		2.0		—		2.0

	$	15.0	$	13.4	$	28.4

- Definition

Tabular disclosure of an adjustment or group of similar adjustments to the opening balance of the estimated reserve for unpaid claims and claims adjustment expense.

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- 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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