

	For the years ended December 31,
	2019			2018			2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	24,584		$	23,775		$	22,545
Reinsurance and other recoverables	4,232			3,957			3,488
Beginning liabilities for unpaid losses and loss adjustment expenses, net	20,352			19,818			19,057
Navigators Group acquisition	2,001			—			—
Provision for unpaid losses and loss adjustment expenses
Current accident year	7,463			7,107			7,381
Prior accident year development [1]	(65		)	(167		)	(41		)
Total provision for unpaid losses and loss adjustment expenses	7,398			6,940			7,340
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	(16		)	—			—
Payments
Current accident year	(2,374		)	(2,452		)	(2,751		)
Prior accident years	(4,374		)	(3,954		)	(3,828		)
Total payments	(6,748		)	(6,406		)	(6,579		)
Foreign currency adjustment	(1		)	—			—
Ending liabilities for unpaid losses and loss adjustment expenses, net	22,986			20,352			19,818
Reinsurance and other recoverables	5,275			4,232			3,957
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	28,261		$	24,584		$	23,775



	For the years ended December 31,
	2019						2018						2017
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	1,331					$	1,331					$	1,387
Amount of discount	388						388						410
Carrying value of liability for unpaid losses and loss adjustment expenses	$	943					$	943					$	977
Discount accretion included in losses and loss adjustment expenses	$	33					$	40					$	30
Weighted average discount rate	2.91					%	2.98					%	3.06					%
Range of discount rates	1.76		%	-	14.03	%	1.77		%	-	14.15	%	1.77		%	-	14.15	%

The reserves recorded for the Company’s property and casualty insurance products at December 31, 2019 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant uncertainties surrounding reserves it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to the Company’s results of operations or cash flows.

Losses and loss adjustment expenses are also impacted by trends including frequency and severity as well as changes in the legislative and regulatory environment. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty in the ultimate settlement of the liabilities gross of reinsurance include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures before reinsurance, factors contributing to the high degree of uncertainty in gross reserves include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.



	For the years ended December 31,
	2019			2018			2017
Workers’ compensation	$	(120	)	$	(164	)	$	(79	)
Workers’ compensation discount accretion	33			40			28
General liability	61			52			11
Marine	8			—			—
Package business	(47		)	(26		)	(25		)
Commercial property	(11		)	(12		)	(8		)
Professional liability	29			(12		)	1
Bond	(3		)	2			32
Assumed Reinsurance	3			—			—
Automobile liability - Commercial Lines	27			(15		)	17
Automobile liability - Personal Lines	(38		)	(18		)	—
Homeowners	3			(25		)	(14		)
Net asbestos reserves	—			—			—
Net environmental reserves	—			—			—
Catastrophes	(42		)	(49		)	(16		)
Uncollectible reinsurance	(30		)	22			(15		)
Other reserve re-estimates, net	46			38			27
Total prior accident year development, including full benefit for the ADC cession	(81		)	(167		)	(41		)
Change in deferred gain on retroactive reinsurance included in other liabilities	16			—			—
Total prior accident year development	$	(65	)	$	(167	)	$	(41	)

claims, reserve increases in middle & large commercial for accident years 2015 to 2018 due to higher estimated severity, as well as increased estimated severity on the acquired Navigators Group book of business related to U.S. construction, premises liability, products liability and excess casualty, mostly related to accident years 2014 to 2017. In addition, an increase in reserves for mass torts for 2009 and prior accident years was offset by a decrease in reserves for extra contractual liability claims for more recent accident years, including the 2018 accident year.

Professional liability reserves were increased, primarily due to increased securities litigation and large loss activity, including wrongful termination and discrimination claims, related to accident years 2017 and 2018 and increased estimated frequency and severity of directors’ and officers’ reserves on the Navigators Group book of business, principally for the 2014 to 2018 accident years. Partially offsetting the increase was a decrease in average severity on public company directors’ and officers’ claim reserves and errors and omissions claim reserves for accident years 2014 and prior.

Automobile liability reserves were decreased in Personal Lines and increased in Commercial Lines. The decrease in Personal Lines was due to the emergence of lower estimated severity in automobile liability for accident year 2017. The increase in Commercial Lines was due to higher estimated severity on national accounts, principally in accident years 2017 and 2018, and higher estimated severity for accident year 2018 in small commercial and middle market, partially offset by lower estimated severity for 2017 and prior accident years in small commercial and middle market.

Catastrophes reserves were reduced, primarily as a result of lower estimated net losses from 2017 hurricanes Harvey and Irma and the 2017 California wildfires. While gross loss reserve estimates for the 2018 California wildfires were also reduced, this was largely offset by a reduction in reinsurance recoverables resulting in very little change to estimated net losses from those wildfires.

In December, 2019, the judge overseeing the bankruptcy of PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E”) approved an $11 billion settlement with insurers representing approximately 85 percent of insurance subrogation claims to resolve all such claims arising from the 2017 Northern California wildfires and 2018 Camp wildfire. The bankruptcy court has also approved PG&E’s settlement with individual wildfire claimants. Those settlements are subject to confirmation by the bankruptcy court of a chapter 11 plan of reorganization

("PG&E Plan") which implements the terms of the settlements. If the PG&E Plan is approved, certain of the Company’s insurance subsidiaries would be entitled to settlement payments of subrogation claims. Based on reserve estimates submitted with the subrogation request, the amount our subsidiaries could collect from PG&E, if any, would be approximately $300 to $325 but could be more or less than that amount depending on how the Company’s ultimate paid claims subject to subrogation compare to other insurers’ ultimate paid claims subject to subrogation. Confirmation of the PG&E Plan and amount of the Company’s ultimate subrogation recoveries from PG&E are subject to uncertainty, including but not limited to resolution of objections raised by the Governor of California and others.

Given the uncertainty about whether the PG&E Plan will be confirmed, the Company has not recognized a benefit from potential subrogation from PG&E and will evaluate in future periods when more information becomes known. In connection with the 2018 Camp wildfire, the Company has recognized a $12 reinsurance recoverable for losses incurred in excess of a $350 per occurrence retention. Under its 2018 property aggregate catastrophe treaty, the Company has recognized a reinsurance recoverable for aggregate catastrophe losses in excess of an $825 retention, with the recoverable currently estimated at $45. As such, the first $57 of subrogation recoveries would be offset by a $57 reduction in these reinsurance recoverables resulting in no net benefit to income.

Other reserve re-estimates, net, primarily represents an increase in unallocated loss adjustment expense ('ULAE") reserves in Property & Casualty Other Operations that was driven by an increase in gross asbestos and environmental reserves, as well as higher than anticipated ULAE costs in recent years, prompting an increase in the projected ULAE run rate.

General liability reserves were increased, primarily due to an increase in reserves for higher hazard general liability exposures in middle market for accident years 2009 to 2017, partially offset by a decrease in reserves for other lines within middle market, including premises and operations, umbrella and products liability, principally for accident years 2015 and prior. Contributing to the increase in reserves for higher hazard general liability exposures was an increase in average claim severity, including from large losses and, in more recent accident years, an increase in claim frequency. Contributing to the reduction in reserves for other middle market lines were more favorable outcomes due to initiatives to reduce legal expenses. In addition, reserve increases for claims with lead paint exposure were offset by reserve decreases for other mass torts and extra-contractual liability claims.

Automobile liability reserves were reduced, primarily driven by reduced estimates of loss adjustment expenses in small commercial for recent accident years and favorable development in personal automobile liability for accident years 2014 to 2017, principally due to lower severity, including with uninsured and underinsured motorist claims.

Asbestos and environmental reserves were unchanged as $238 of adverse development arising from the fourth quarter 2018 comprehensive annual review was offset by a $238 recoverable from NICO. For additional information related to the adverse development cover with NICO, see Note 8 - Reinsurance and Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.

Catastrophe reserves were reduced, primarily as a result of lower estimated net losses from 2017 catastrophes, principally related to hurricanes Harvey and Irma. Before reinsurance, estimated losses for 2017 catastrophe events decreased by $133, resulting in a decrease in reinsurance recoverables of $90 as the Company no longer expects to recover under the 2017 Property Aggregate reinsurance treaty as aggregate ultimate losses for 2017 catastrophe events are now projected to be less than $850.

Workers’ compensation reserves were reduced in small commercial and middle market, given the continued emergence of favorable frequency, primarily for accident years 2013 to 2015, as well as a reduction in estimated reserves for unallocated loss adjustment expenses, partially offset by strengthening reserves for captive programs within specialty commercial.

Asbestos and environmental reserves were unchanged as $285 of adverse development arising from the fourth quarter 2017 comprehensive annual review was offset by a $285 recoverable from NICO. For additional information related to the adverse development cover with NICO, see Note 8 - Reinsurance and Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.

The Company has an adverse development cover reinsurance agreement with NICO, a subsidiary of Berkshire Hathaway Inc., to reinsure loss development after 2016 on substantially all of the Company’s asbestos and environmental reserves (the “A&E ADC”). Under the A&E ADC, the Company paid a reinsurance premium of $650 for NICO to assume adverse net loss reserve development up to $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion including reserves for A&E exposure for accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E") and reserves for A&E exposure for accident years 1986 and subsequent from policies underwritten prior to 2016 that are reported in ongoing Commercial Lines and Personal Lines. The $650 reinsurance premium was placed into a collateral trust account as security for NICO’s claim payment obligations to the Company. The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions. The A&E ADC covers substantially all the Company’s A&E reserve development up to the reinsurance limit.

paid are recognized as a dollar-for-dollar offset to direct losses incurred. Cumulative ceded losses exceeding the $650 reinsurance premium paid would result in a deferred gain. The deferred gain would be recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. Consequently, until periods when the deferred gain is recognized as a benefit to earnings, cumulative adverse development of asbestos and environmental claims after December 31, 2016 in excess of $650 may result in significant charges against earnings. As of December 31, 2019, the Company has incurred $640 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO.

NICO a reinsurance premium of $91 in exchange for reinsurance coverage of $300 of adverse net loss reserve development that attaches $100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $1.816 billion for accidents and losses prior to December 31, 2018.

As of December 31, 2019, the Company has recorded a reinsurance recoverable under the Navigators ADC of $107 as estimated ceded loss development on the 2018 and prior accident year reserves of $207 exceed the $100 deductible. While the reinsurance recoverable is $107, the Company has also recorded a $16 deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $91 of ceded premium paid must be recognized as a deferred gain. As the Company has ceded $107 of the $300 available limit, there is $193 of remaining limit available as of December 31, 2019.



	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance												Subtotal
Reserve Line	Cumulative Incurred for Accident Years Displayed in Triangles		Cumulative Paid for Accident Years Displayed in Triangles			Unpaid for Accident Years not Displayed in Triangles		Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance		Discount			Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance		Reinsurance and Other Recoverables			Liability for Unpaid Losses and Loss Adjustment Expenses
Workers' compensation	$	18,990	$	(10,991	)	$	2,446	$	345	$	(372	)	$	10,418	$	2,093		$	12,511
General liability	5,711		(2,828		)	471		140		—			3,494		630			4,124
Marine	1,226		(974		)	19		8		—			279		135			414
Package business	6,817		(5,215		)	49		91		—			1,742		33			1,775
Commercial property	2,939		(2,520		)	29		13		—			461		162			623
Commercial automobile liability	3,698		(2,739		)	11		22		—			992		73			1,065
Commercial automobile physical damage	206		(194		)	3		—		—			15		(1		)	14
Professional liability	1,796		(863		)	86		31		—			1,050		549			1,599
Bond	637		(353		)	29		24		—			337		13			350
Assumed Reinsurance	1,005		(824		)	4		5		—			190		25			215
Personal automobile liability	11,985		(10,518		)	25		68		—			1,560		27			1,587
Personal automobile physical damage	1,531		(1,507		)	6		3		—			33		—			33
Homeowners	7,443		(6,958		)	4		38		—			527		41			568
Other ongoing business						231		—		(16		)	215		312			527
Asbestos and environmental [1]						1,147		—		—			1,147		1,219			2,366
Other operations [1]						375		151		—			526		(36		)	490
Total P&C	$	63,984	$	(46,484	)	$	4,935	$	939	$	(388	)	$	22,986	$	5,275		$	28,261

The reserve lines in the above table and the loss triangles that follow represent the significant lines of business for which the Company regularly reviews the appropriateness of reserve levels. These reserve lines differ from the reserve lines reported on a statutory basis, as prescribed by the National Association of Insurance Commissioners ("NAIC"). The cumulative incurred losses displayed in the above table include the full reinsurance benefit of ceding $107 of losses to the Navigators ADC even though $16 of that benefit has been recorded as a deferred gain within other liabilities and recognized as a charge to earnings in 2019 within incurred loss and loss adjustment expenses included in the consolidated statement of operations. The $107 of Navigators Insurers losses ceded to the Navigators ADC included in the following triangles $28 for general liability, $25 for professional liability, $13 for assumed reinsurance, $12 for commercial auto, $9 for marine and $8 for commercial property and included $12 for older accident years and lines of business that are not in the following triangles.

The following loss triangles present historical loss development for incurred and paid claims by accident year, including loss development on Navigators Insurers reserves prior to and after the May 23, 2019 acquisition date. Because the loss triangles include pre-acquisition date changes in ultimate incurred loss estimates for Navigators Insurers’ reserves, changes in reserve development evident in the incurred loss triangles may differ from prior accident year development recorded by the Company as shown in the (Favorable) Unfavorable Prior Accident Year Development table above as that only includes changes in Navigators Insurers’ reserves post acquisition. In addition, the incurred losses triangles include reserve development on both catastrophe and non-catastrophe claims whereas the (Favorable) Unfavorable Prior Accident Year Development table above shows the total amount of catastrophe reserve development across all lines of business on a single line.

Triangles are limited to the number of years for which claims incurred typically remain outstanding, not exceeding ten years. Short-tail lines, which represent claims generally expected to be paid within a few years, have three years of claim development displayed. For marine, commercial property, professional liability and assumed reinsurance lines, the Company has provided eight years of claims development as data for earlier periods was not available for the Lloyds syndicate. IBNR reserves shown in loss triangles include reserve for incurred but not reported claims as well as reserves for expected development on reported claims. Incurred and cumulative paid losses in currencies other than the U.S. dollar have been converted into U.S. dollars using the exchange rates as of December 31, 2019.



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	1,560	$	1,775	$	1,814	$	1,858	$	1,857	$	1,882	$	1,881	$	1,878	$	1,892	$	1,888	$	221	156,802
2011			2,013		2,099		2,204		2,206		2,221		2,224		2,232		2,242		2,239		314		177,910
2012					2,185		2,207		2,207		2,181		2,168		2,169		2,154		2,146		350		171,341
2013							2,020		1,981		1,920		1,883		1,861		1,861		1,850		415		151,315
2014									1,869		1,838		1,789		1,761		1,713		1,692		477		126,104
2015											1,873		1,835		1,801		1,724		1,714		540		113,819
2016													1,772		1,772		1,780		1,767		665		111,763
2017															1,862		1,869		1,840		864		111,096
2018																	1,916		1,917		1,039		116,915
2019																			1,937		1,359		110,515
Total																			$	18,990



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	316	$	709	$	970	$	1,154	$	1,287	$	1,374	$	1,439	$	1,489	$	1,522	$	1,553
2011			371		841		1,156		1,368		1,518		1,622		1,690		1,746		1,786
2012					359		809		1,106		1,313		1,436		1,529		1,587		1,644
2013							304		675		917		1,071		1,175		1,260		1,304
2014									275		598		811		960		1,041		1,099
2015											261		576		778		909		1,004
2016													255		579		779		908
2017															261		575		778
2018																	283		624
2019																			291
Total																			$	10,991



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	436	$	445	$	432	$	437	$	428	$	431	$	465	$	467	$	483	$	482	$	41	23,941
2011			431		420		408		405		404		416		417		426		420		48		22,310
2012					423		402		399		392		410		408		421		413		65		16,501
2013							455		442		456		484		488		502		505		77		13,643
2014									506		475		481		494		513		522		114		14,318
2015											556		560		554		594		633		141		15,088
2016													613		583		607		633		254		15,984
2017															626		614		613		359		15,039
2018																	692		669		516		15,368
2019																			821		744		11,628
Total																			$	5,711



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	20	$	68	$	149	$	230	$	284	$	327	$	387	$	409	$	418	$	427
2011			15		61		123		200		255		303		330		348		362
2012					13		55		101		170		233		280		305		323
2013							13		53		141		233		320		372		398
2014									15		42		130		214		304		358
2015											10		55		156		278		409
2016													12		52		131		283
2017															15		67		156
2018																	21		83
2019																			29
Total																			$	2,828



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves			Claims Reported
2012	$	195	$	219	$	179	$	168	$	163	$	163	$	167	$	163	$	—		6,766
2013			148		152		134		135		139		134		137		(2		)	6,601
2014					163		159		157		164		163		168		(1		)	7,093
2015							158		145		145		148		133		(8		)	10,038
2016									139		142		137		147		(3		)	12,959
2017											160		186		174		3			15,216
2018													144		160		5			13,130
2019															144		61			5,775
Total															$	1,226



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019
2012	$	50	$	101	$	125	$	139	$	148	$	152	$	154	$	158
2013			41		82		100		111		118		120		125
2014					40		80		116		130		150		156
2015							40		85		115		125		133
2016									35		80		106		122
2017											48		110		141
2018													37		104
2019															35
Total															$	974



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	657	$	662	$	654	$	652	$	652	$	651	$	653	$	651	$	649	$	647	$	18	52,484
2011			810		792		790		800		808		814		813		812		807		26		61,045
2012					736		725		728		731		736		735		739		732		30		59,817
2013							579		565		573		585		586		592		586		32		43,556
2014									566		578		601		602		603		603		59		43,098
2015											582		588		585		583		588		69		41,965
2016													655		638		632		625		118		43,672
2017															695		702		692		192		45,836
2018																	719		724		241		43,026
2019																			813		392		36,824
Total																			$	6,817



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	270	$	414	$	487	$	539	$	570	$	601	$	613	$	618	$	625	$	627
2011			377		555		621		684		727		748		762		772		774
2012					286		486		560		616		652		673		687		694
2013							225		339		414		467		504		522		541
2014									226		345		416		468		507		525
2015											212		332		383		445		486
2016													225		353		410		465
2017															235		372		447
2018																	237		402
2019																			254
Total																			$	5,215



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2012	$	369	$	333	$	334	$	334	$	336	$	335	$	334	$	333	$	1	26,786
2013			268		252		253		252		249		248		247		—		21,601
2014					293		281		282		280		279		281		—		21,017
2015							298		301		302		301		305		1		21,005
2016									405		419		399		406		1		23,710
2017											577		515		455		21		24,235
2018													450		436		38		21,460
2019															476		93		18,634
Total															$	2,939



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019
2012	$	182	$	296	$	317	$	326	$	331	$	331	$	331	$	330
2013			161		223		238		243		242		244		245
2014					170		250		270		279		279		279
2015							179		257		284		296		301
2016									215		342		378		395
2017											229		378		412
2018													188		344
2019															214
Total															$	2,520



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	290	$	291	$	309	$	335	$	338	$	344	$	344	$	341	$	340	$	339	$	3	38,158
2011			272		310		356		356		366		365		363		362		363		6		39,298
2012					311		377		391		402		395		389		387		388		6		36,043
2013							311		318		334		341		340		339		335		11		32,228
2014									309		317		331		337		341		334		14		29,597
2015											308		358		372		356		356		18		28,487
2016													385		393		390		391		44		29,036
2017															372		383		379		76		26,089
2018																	349		396		153		24,016
2019																			417		291		22,455
Total																			$	3,698



Cumulative Paid Losses & Allocated Loss Adjustment Expense, Net of Reinsurance
	For the years ended December 31
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	60	$	132	$	199	$	266	$	305	$	315	$	324	$	330	$	334	$	335
2011			63		133		211		274		316		339		348		353		354
2012					65		143		234		307		346		359		372		376
2013							62		130		202		259		295		311		321
2014									59		131		197		252		299		309
2015											62		142		207		267		314
2016													65		147		232		303
2017															60		134		211
2018																	62		153
2019																			63
Total																			$	2,739



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2012	$	242	$	238	$	238	$	218	$	221	$	220	$	219	$	225	$	19	7,025
2013			207		195		187		174		173		173		171		24		5,970
2014					187		183		181		177		179		182		26		6,705
2015							164		174		179		190		213		51		7,171
2016									183		176		203		196		66		8,288
2017											205		203		231		103		9,224
2018													247		280		155		9,517
2019															298		252		7,396
Total															$	1,796



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2012		2013		2014		2015		2016		2017		2018		2019
2012	$	17	$	67	$	100	$	139	$	154	$	168	$	172	$	175
2013			10		44		67		88		116		131		137
2014					7		38		74		107		130		135
2015							9		40		85		107		124
2016									8		51		88		111
2017											11		48		87
2018													15		73
2019															21
Total															$	863



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	72	$	76	$	82	$	81	$	75	$	71	$	72	$	92	$	73	$	72	$	6	2,674
2011			74		78		78		76		71		71		71		71		72		9		2,136
2012					71		70		61		55		49		49		45		48		13		1,723
2013							64		58		55		48		49		39		35		15		1,463
2014									71		67		66		67		59		59		12		1,383
2015											67		67		63		60		54		19		1,385
2016													61		61		61		56		32		1,324
2017															63		90		101		42		1,547
2018																	68		68		49		1,383
2019																			72		68		1,122
Total																			$	637



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	14	$	46	$	60	$	60	$	60	$	65	$	67	$	67	$	69	$	64
2011			12		40		52		57		58		60		60		60		61
2012					12		25		26		24		26		26		34		35
2013							3		9		17		19		19		19		20
2014									18		31		40		43		43		45
2015											9		20		24		31		34
2016													2		12		15		20
2017															5		46		55
2018																	6		16
2019																			3
Total																			$	353



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2012	$	107	$	99	$	93	$	88	$	115	$	120	$	119	$	121	$	—	1,424
2013			115		119		103		105		102		102		104		1		1,607
2014					119		142		122		118		115		116		1		1,654
2015							102		92		94		94		95		—		1,383
2016									88		91		98		100		3		1,434
2017											129		153		161		11		1,582
2018													128		127		1		1,322
2019															181		107		875
Total															$	1,005



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012		2013		2014		2015		2016		2017		2018		2019
2012	$	38	$	77	$	83	$	85	$	112	$	118	$	118	$	119
2013			53		83		91		98		100		101		103
2014					66		119		106		109		112		113
2015							42		64		77		83		91
2016									36		66		84		90
2017											44		116		135
2018													25		111
2019															62
Total															$	824



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2010	$	1,346	$	1,321	$	1,293	$	1,287	$	1,282	$	1,275	$	1,265	$	1,265	$	1,264	$	1,265	$	3	248,948
2011			1,181		1,170		1,180		1,173		1,166		1,154		1,154		1,153		1,153		4		221,890
2012					1,141		1,149		1,146		1,142		1,133		1,130		1,130		1,130		6		210,757
2013							1,131		1,145		1,144		1,153		1,152		1,153		1,157		8		205,475
2014									1,146		1,153		1,198		1,200		1,199		1,202		11		208,983
2015											1,195		1,340		1,338		1,330		1,331		21		216,827
2016													1,407		1,402		1,393		1,397		46		215,658
2017															1,277		1,275		1,228		109		186,993
2018																	1,108		1,104		246		154,648
2019																			1,018		461		131,577
Total																			$	11,985



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	496	$	915	$	1,108	$	1,202	$	1,239	$	1,251	$	1,256	$	1,258	$	1,260	$	1,260
2011			447		826		1,006		1,088		1,126		1,140		1,145		1,146		1,146
2012					441		818		986		1,067		1,104		1,114		1,120		1,122
2013							442		816		1,002		1,091		1,121		1,135		1,142
2014									430		843		1,032		1,125		1,165		1,182
2015											475		935		1,142		1,243		1,292
2016													505		968		1,188		1,308
2017															441		836		1,033
2018																	359		710
2019																			323
Total																			$	10,518



Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves			Claims Reported
2010	$	838	$	850	$	838	$	840	$	840	$	840	$	836	$	834	$	834	$	834	$	(1	)	161,597
2011			955		920		919		916		914		911		908		907		907		—			179,399
2012					774		741		741		741		739		738		738		738		1			142,845
2013							673		638		637		634		632		630		629		1			113,538
2014									710		707		702		700		698		698		(1		)	121,902
2015											690		703		690		684		684		2			119,944
2016													669		673		663		658		4			119,646
2017															866		889		884		41			124,189
2018																	903		910		60			101,985
2019																			501		107			78,068
Total																			$	7,443



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	599	$	789	$	815	$	825	$	829	$	832	$	833	$	833	$	834	$	835
2011			709		871		891		899		903		905		908		907		908
2012					547		696		719		727		731		734		735		736
2013							467		590		611		622		626		627		628
2014									526		663		684		691		695		697
2015											487		645		665		674		680
2016													481		621		640		649
2017															538		747		795
2018																	484		712
2019																			318
Total																			$	6,958

The Company estimates ultimate losses and allocated loss adjustment expenses by accident year. IBNR represents the excess of estimated ultimate loss reserves over case reserves. The process to estimate ultimate losses and loss adjustment expenses is an integral part of the Company's reserve setting. Reserves for allocated and unallocated loss adjustment expenses are generally established separate from the reserves for losses.

Reserves for losses are set by line of business within the reporting segments. Case reserves are established by a claims handler on each individual claim and are adjusted as new information becomes known during the course of handling the claim. Lines of business for which reported losses emerge over a long period of time are referred to as long-tail lines of business. Lines of business for which reported losses emerge more quickly are

referred to as short-tail lines of business. The Company’s shortest tail lines of business are homeowners, commercial property and automobile physical damage. The longest tail lines of business include workers’ compensation, general liability and professional liability. For short-tail lines of business, emergence of paid loss and case reserves is credible and likely indicative of ultimate losses. For long-tail lines of business, emergence of paid losses and case reserves is less credible in the early periods after a given accident year and, accordingly, may not be indicative of ultimate losses.

The Company’s reserving actuaries regularly review reserves for both current and prior accident years using the most current claim data. A variety of actuarial methods and judgments are used for most lines of business to arrive at selections of estimated ultimate losses and loss adjustment expenses. The reserve selections incorporate input, as appropriate, from claims

For both short-tail and long-tail lines of business, an expected loss ratio is used to record initial reserves. This expected loss ratio is determined by starting with the average loss ratio of recent prior accident years and adjusting that ratio for the effect of expected changes to earned pricing, loss frequency and severity, mix of business, ceded reinsurance and other factors. For short-tail lines, IBNR for the current accident year is initially recorded as the product of the expected loss ratio for the period, earned premium for the period and the proportion of losses expected to be reported in future calendar periods for the current accident period. For long-tailed lines, IBNR reserves for the current accident year are initially recorded as the product of the expected loss ratio for the period and the earned premium for the period, less reported losses for the period. For certain short-tailed lines of business, IBNR amounts in the above loss development triangles are negative due to anticipated salvage and subrogation recoveries on paid losses.

As losses for a given accident year emerge or develop in subsequent periods, reserving actuaries use other methods to estimate ultimate unpaid losses in addition to the expected loss ratio method. These primarily include paid and reported loss development methods, frequency/severity techniques and the Bornhuetter-Ferguson method (a combination of the expected loss ratio and paid development or reported development method). Within any one line of business, the methods that are given more weight vary based primarily on the maturity of the accident year, the mix of business and the particular internal and external influences impacting the claims experience or the methods. The output of the reserve reviews are reserve estimates that are referred to as the “actuarial indication”.

Paid development and reported development techniques are used for most lines of business though more weight is given to the reported development method for some of the long-tailed lines like general liability. In addition, for long-tailed lines of business, the Company relies on the expected loss ratio method for immature accident years. Frequency/severity techniques are used predominantly for professional liability and are also used for automobile liability. The Berquist-Sherman technique is also used

for automobile liability, marine and assumed reinsurance. For most lines, reserves for allocated loss adjustment expenses ("ALAE", or those expenses related to specific claims) are analyzed using paid development techniques and an analysis of the relationship between ALAE and loss payments. For most of the lines acquired through the Navigators Group book of business, loss and ALAE are reviewed on a combined basis. Reserves for ULAE are determined using the expected cost per claim year and the anticipated claim closure pattern as well as the ratio of paid ULAE to paid losses.

In the final step of the reserve review process, senior reserving actuaries and senior management apply their judgment to determine the appropriate level of reserves considering the actuarial indications and other factors not contemplated in the actuarial indications. Those factors include, but are not limited to, the assessed reliability of key loss trends and assumptions used in the current actuarial indications, the maturity of the accident year, pertinent trends observed over the recent past, the level of volatility within a particular line of business, and the improvement or deterioration of actuarial indications. The Company also considers the magnitude of the difference between the actuarial indication and the recorded reserves.

For most property and casualty lines, claim counts represent the number of claim features on a reported claim where a claim feature is each separate coverage for each claimant affected by the claim event. For example, one car accident that results in two bodily injury claims and one automobile damage liability claim would be counted as three claims within the personal automobile liability triangle. Similarly, a fire that impacts one commercial building may result in multiple claim features due to the potential for claims related to business interruption, structural damage, and loss of the physical contents of the building. Claim features that result in no paid losses are included in the reported claim counts. For some property and casualty lines, such as marine and assumed reinsurance, a claim count represents each reported claim regardless of the number of features. For assumed bordereau business and business written on binders, one claim count is posted for each bordereau received, which could account for multiple claims.



Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	(Unaudited)
Reserve Line	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year		10th Year
Workers' compensation	15.6	%	19.3	%	12.7	%	8.7	%	5.9	%	4.3	%	2.9	%	2.6	%	1.8	%	1.6	%
General liability	2.9	%	8.4	%	15.0	%	18.5	%	15.8	%	10.5	%	7.5	%	4.4	%	2.5	%	1.9	%
Marine	26.7	%	32.3	%	17.9	%	8.8	%	7.1	%	2.3	%	2.6	%	2.5	%
Package business	37.4	%	21.6	%	10.4	%	8.7	%	5.8	%	3.3	%	2.2	%	1.0	%	0.6	%	0.3	%
Commercial property	53.8	%	30.5	%	7.4	%	3.1	%	0.8	%	0.3	%	0.1	%	(0.2	%)
Commercial automobile liability	16.9	%	21.0	%	20.8	%	17.8	%	11.8	%	4.3	%	2.7	%	1.4	%	0.7	%	0.3	%
Commercial automobile physical damage	89.1	%	7.8	%	(0.4	)%
Professional liability	5.4	%	18.8	%	17.5	%	14.0	%	11.1	%	5.7	%	2.7	%	1.0	%
Bond	13.8	%	27.2	%	12.6	%	4.8	%	1.9	%	2.2	%	5.7	%	0.5	%	1.8	%	(6.2	%)
Assumed Reinsurance	37.7	%	39.0	%	7.4	%	4.7	%	8.8	%	2.3	%	0.9	%	0.7	%
Personal automobile liability	36.3	%	33.1	%	15.6	%	7.6	%	3.2	%	1.1	%	0.5	%	0.2	%	0.1	%	—	%
Personal automobile physical damage	96.3	%	3.0	%	(0.3	%)
Homeowners	69.6	%	21.5	%	3.3	%	1.2	%	0.6	%	0.3	%	0.1	%	0.1	%	—	%	0.1	%



	For the years ended December 31,
	2019			2018			2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,445		$	8,512		$	5,772
Reinsurance recoverables	239			209			208
Beginning liabilities for unpaid losses and loss adjustment expenses, net	8,206			8,303			5,564
Aetna U.S. group life and disability business acquisition [1]	—			42			2,833
Provision for unpaid losses and loss adjustment expenses
Current incurral year	4,385			4,470			2,868
Prior year's discount accretion	219			227			202
Prior incurral year development [2]	(410		)	(324		)	(185		)
Total provision for unpaid losses and loss adjustment expenses [3]	4,194			4,373			2,885
Payments
Current incurral year	(2,277		)	(2,377		)	(1,528		)
Prior incurral years	(2,114		)	(2,135		)	(1,451		)
Total payments	(4,391		)	(4,512		)	(2,979		)
Ending liabilities for unpaid losses and loss adjustment expenses, net	8,009			8,206			8,303
Reinsurance recoverables	247			239			209
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,256		$	8,445		$	8,512



	For the years ended December 31,
	2019						2018						2017
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	8,636					$	8,957					$	9,071
Amount of discount	(1,401					)	(1,505					)	(1,536					)
Carrying value of liability for unpaid losses and loss adjustment expenses	$	7,235					$	7,452					$	7,535
Weighted average discount rate	3.4					%	3.4					%	3.5					%
Range of discount rate	2.1		%	-	8.0	%	2.1		%	-	8.0	%	2.1		%	-	8.0	%

Reserves are discounted at rates in effect at the time claims were incurred, ranging from 2.1% for life and disability reserves acquired from Aetna based on interest rates in effect at the acquisition date of November 1, 2017, to 8.0% for the Company’s pre-acquisition reserves for incurral year 1990, and vary by product. Prior year's discount accretion has been calculated as the average reserve balance for the year times the weighted average discount rate.

Group disability- Prior period reserve estimates decreased by approximately $340 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims, including the impact of updating long-term disability ("LTD") recovery probabilities to be based on more recent experience. New York Paid Family Leave also experienced favorable claim emergence including an experience refund.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $90 largely driven by lower-than-previously expected claim incidence inclusive of group life, group life premium waiver, and group accidental death & dismemberment, principally for the 2017 incurral year.



	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance												Subtotal
Reserve Line	Cumulative Incurred for Incurral Years Displayed in Triangles		Cumulative Paid for Incurral Years Displayed in Triangles			Unpaid for Incurral Years not Displayed in Triangles		Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance		Discount			Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance		Reinsurance and Other Recoverables		Liability for Unpaid Losses and Loss Adjustment Expenses
Group long-term disability	$	13,157	$	(7,316	)	$	1,874	$	173	$	(1,272	)	$	6,616	$	236	$	6,852
Group life and accident, excluding premium waiver	5,793		(5,332		)	134		3		(18		)	580		1		581
Group short-term disability						114		4		—			118		—		118
Group life premium waiver						758		10		(111		)	657		2		659
Group supplemental health						38		—		—			38		8		46
Total Group Benefits	$	18,950	$	(12,648	)	$	2,918	$	190	$	(1,401	)	$	8,009	$	247	$	8,256



Undiscounted Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
					For the years ended December 31,
					(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		IBNR Reserves		Claims Reported
2011	$	1,917	$	1,761	$	1,660	$	1,659	$	1,669	$	1,660	$	1,649	$	1,638	$	1,631	$	—	39,246
2012			1,829		1,605		1,539		1,532		1,530		1,515		1,504		1,486		—		37,523
2013					1,660		1,479		1,429		1,429		1,416		1,413		1,399		1		31,946
2014							1,636		1,473		1,430		1,431		1,431		1,408		2		33,213
2015									1,595		1,442		1,422		1,420		1,401		3		33,820
2016											1,651		1,481		1,468		1,437		3		34,719
2017													1,597		1,413		1,358		8		31,865
2018															1,647		1,387		37		28,551
2019																	1,650		852		17,753
Total																	$	13,157



Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
					For the years ended December 31,
					(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019
2011	$	118	$	508	$	743	$	886	$	996	$	1,087	$	1,167	$	1,231	$	1,286
2012			108		483		708		835		933		1,014		1,080		1,138
2013					102		443		664		791		881		954		1,016
2014							103		448		675		801		884		960
2015									108		460		687		806		891
2016											112		479		705		819
2017													109		452		658
2018															105		447
2019																	101
Total																	$	7,316

benefits. A Disabled Life Reserve ("DLR") is calculated for each LTD claim. The DLR for each claim is the expected present value of all estimated future benefit payments and includes estimates of claim recovery, investment yield, and offsets from other income, including offsets from Social Security benefits and workers’ compensation. Estimated future benefit payments represent the monthly income benefit that is paid until recovery, death or expiration of benefits. Claim recoveries are estimated based on claim characteristics such as age and diagnosis and represent an estimate of benefits that will terminate, generally as a result of the claimant returning to work or being deemed able to return to work. The DLR also includes a liability for payments to claimants who have not yet been approved for LTD either because they have not yet satisfied the waiting (or elimination) period or because the approval or denial decision has not yet been made. In these cases, the present value of future benefits is reduced for the likelihood of claim denial based on Company experience. For claims recently closed due to recovery, a portion of the DLR is retained for the possibility that the claim reopens upon further evidence of disability. In addition, a reserve for estimated unpaid claim expenses is included in the DLR.

For incurral years with IBNR claims, estimates of ultimate losses are made by applying completion factors to the dollar amount of claims reported or expected depending on the market segment. IBNR represents estimated ultimate losses less both DLR and cumulative paid amounts for all reported claims. Completion factors are derived using standard actuarial techniques using triangles that display historical claim count emergence by incurral month. These estimates are reviewed for reasonableness and are adjusted for current trends and other factors expected to cause a change in claim emergence. The IBNR includes an estimate of unpaid claim expenses, including a provision for the cost of initial set-up of the claim once reported.

The Company also records reserves for future death benefits under group term life policies that provide for premiums to be waived in the event the insured is unable to work due to disability and has satisfied an elimination period, which is typically nine months (premium waiver reserves). The death benefit reserve for these group life premium waiver claims is estimated for a known disabled claimant equal to the present value of expected future cash outflows (typically a lump sum face amount payable at death plus claim expenses) with separate estimates for claimant recovery (when no death benefit is payable) and for death before recovery or benefit expiry (when death benefit is payable). The IBNR for premium waiver death benefits is estimated with standard actuarial development methods.

other group products that have short claim payout periods. For these products, reserves are determined using paid or reported actuarial development methods. The resulting claim triangles produce a completion pattern and estimate of ultimate loss. IBNR for these lines of business equals the estimated ultimate losses and loss adjustment expenses less the amount of paid or reported claims depending on whether the paid or reported development method was used. Estimates are reviewed for reasonableness and are adjusted for current trends or other factors that affect the development pattern.



Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	(Unaudited)
	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year
Group long-term disability	7.4	%	24.8	%	15.5	%	8.6	%	6.3	%	5.4	%	4.6	%	3.9	%	3.4	%
Group life and accident, excluding premium waiver	78.6	%	19.6	%	0.9	%



Changes in Reserves for Future Policy Benefits^[1]
Liability balance, as of January 1, 2019	$	642
Incurred	86
Paid	(102		)
Change in unrealized investment gains and losses	9
Liability balance, as of December 31, 2019	$	635
Reinsurance recoverable asset, as of January 1, 2019	$	27
Incurred	4
Paid	—
Reinsurance recoverable asset, as of December 31, 2019	$	31



Liability balance, as of January 1, 2018	$	713
Incurred	72
Paid	(101		)
Change in unrealized investment gains and losses	(42		)
Liability balance, as of December 31, 2018	$	642
Reinsurance recoverable asset, as of January 1, 2018	$	26
Incurred	1
Paid	—
Reinsurance recoverable asset, as of December 31, 2018	$	27