Losses and Loss Expenses

The following table represents a reconciliation of the beginning and ending balances of unpaid losses and loss expenses, including an analysis of the Company's paid and unpaid losses and loss expenses incurred for the years indicated:



(U.S. dollars in thousands)	2017			2016			2015
Unpaid losses and loss expenses at the beginning of the year	$	25,939,571		$	25,439,744		$	19,353,243
Unpaid losses and loss expenses recoverable at the beginning of the year (1)	5,480,300			5,248,905			3,411,528
Net unpaid losses and loss expenses at the beginning of the year	$	20,459,271		$	20,190,839		$	15,941,715
Acquired reserves	—			101,315			5,439,876
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in:
Current year	8,149,690			6,374,377			5,072,830
Prior year	(147,770		)	(301,542		)	(306,630		)
Total net incurred losses and loss expenses	8,001,920			6,072,835			4,766,200
Exchange rate effects	460,187			(571,198		)	(582,300		)
Less net losses and loss expenses paid in respect of losses occurring in:
Current year	2,175,250			1,444,251			1,047,277
Prior year	4,288,795			3,890,269			4,327,375
Total net paid losses	$	6,464,045		$	5,334,520		$	5,374,652
Net unpaid losses and loss expenses at the end of the year	22,457,333			20,459,271			20,190,839
Unpaid losses and loss expenses recoverable (1)	7,239,446			5,480,300			5,248,905
Unpaid losses and loss expenses at the end of the year	$	29,696,779		$	25,939,571		$	25,439,744

____________


(1)	P&C business only, net of provision for uncollectible reinsurance. See Note 12, "Reinsurance," for further information.

(a) Liability for Unpaid Losses and Loss Expenses

As the Company earns premiums for the underwriting risks it assumes, an estimate of the expected ultimate losses related to the premium is established. Loss reserves for unpaid loss and loss expenses are established due to the significant periods of time that may elapse between the occurrence, reporting and settlement of a loss. The process of establishing reserves for unpaid P&C claims can be complex and is subject to considerable variability, as it requires the use of judgment to make informed estimates. These estimates are based on numerous factors, and may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed or as current laws change. Loss reserves include:


•	Case reserves - reserves for reported losses and loss expenses that have not yet been settled; and


•	IBNR reserves – reserves for incurred but not reported losses or for reported losses over and above the amount of case reserves.

Case Reserves

Case reserves for the Company's P&C operations are established by management based on amounts reported from insureds or ceding companies and consultation with legal counsel, and represent the estimated ultimate cost of events or conditions that have been reported to or specifically identified by the Company. The method of establishing case reserves for reported claims differs among the Company's operations.

With respect to the Insurance segment, the Company is notified of insured losses and records a case reserve for the estimated amount of the settlement, if any. The estimate reflects the judgment of claims personnel based on general reserving practices, the experience and knowledge of such personnel regarding the nature of the specific claim and, where appropriate, advice of legal counsel. Reserves are also established to provide for the estimated expense of settling claims, including legal and other fees and the general expenses of administering the claims adjustment process.

With respect to Reinsurance operations, case reserves for reported claims are generally established based on reports received from ceding companies. Additional case reserves may be established by the Company to reflect the estimated ultimate cost of a loss. For reinsurers, uncertainty in the reserving process stems, in part, from timing lags inherent in reporting by the claimant to the primary insurer, and subsequently by the primary insurer to the reinsurer. As a predominantly broker market reinsurer for both excess-of-loss and proportional contracts, the Company is potentially subject to an additional timing lag in the receipt of information, as the primary insurer reports to the broker who in turn reports to the Company.

Since the Company relies on information regarding paid losses, case reserves and IBNR provided by ceding companies to estimate its liability for unpaid losses and loss adjustment expenses ("LAE"), certain procedures are maintained in order to help determine the completeness and accuracy of such information. Periodically, management assesses the reporting activities of its ceding companies on the basis of qualitative and quantitative criteria. In addition to conferring with ceding companies or brokers on claims matters, our claims personnel conduct periodic audits of specific claims and the overall claims procedures of ceding companies at their offices. The Company relies on its ability to effectively monitor the claims handling and claims reserving practices of ceding companies in order to help establish the proper reinsurance premium for reinsurance agreements and to establish proper loss reserves. Disputes with ceding companies have been rare and generally have been resolved through negotiation.

In addition to information received from ceding companies on reported claims, the Company also utilizes information on the pattern of ceding company loss reporting and loss settlements from previous catastrophic events in order to estimate the ultimate liability related to catastrophic events such as hurricanes. Commercial catastrophe model analyses and zonal aggregate exposures are utilized to assess potential client loss before and after an event. Initial cedant loss reports are generally obtained shortly after a catastrophic event, with subsequent updates received as new information becomes available. The Company actively requests loss updates from cedants periodically while there is still considerable uncertainty for an event, often for the first year following an event. The Company's claim settlement processes also incorporate an update to the total loss reserve at the time a claim payment is made to a ceding company.

While the reliance on loss reports from ceding companies may increase the level of uncertainty associated with the estimation of total loss reserves for property catastrophe reinsurance relative to direct property insurance, there are several factors which serve to reduce the uncertainty in loss reserve estimates for property catastrophe reinsurance. First, for large natural catastrophe events, aggregate limits in property catastrophe reinsurance contracts are in some cases fully exhausted by the loss reserve estimates. Second, as a reinsurer, the Company has access to information from a broad cross section of the insurance industry. The Company utilizes such information in order to perform consistency checks on the data provided by ceding companies and is able to identify trends in loss reporting and settlement activity and incorporate such information in the estimate of IBNR reserves. Finally, the Company also supplements the loss information received from cedants with loss estimates developed by market share techniques and/or from third party catastrophe models applied to exposure data supplied by cedants.

IBNR Reserves

IBNR reserves represent management's best estimate, at a given point in time, of the amount in excess of case reserves that is needed for the future settlement and loss adjustment costs associated with claims incurred. It is possible that the ultimate liability may differ materially from these estimates. Because the ultimate amount of unpaid losses and LAE is uncertain, management believes that quantitative techniques to estimate these amounts are enhanced by professional and managerial judgment. Management reviews the IBNR estimates produced by its actuarial department and determines its best estimate of the liabilities to record in the financial statements. The Company considers this single point estimate to be the mean expected outcome.

IBNR reserves are estimated by the Company's actuaries using several standard actuarial methodologies including the loss ratio method, the loss development or chain ladder method, the Bornhuetter-Ferguson ("BF") method and frequency and severity approaches. IBNR related to a specific event may be based on the estimated exposure to an industry loss and may include the use of catastrophe modeling software. On a quarterly basis, IBNR reserves are reviewed by the Company's actuaries, and are adjusted as new information becomes available. Any such adjustments are accounted for as changes in estimates and are reflected in the results of operations in the period in which they are made.

The Company's actuaries use one set of assumptions in calculating the single point estimate, which includes actual loss data, loss development factors, loss ratios, reported claim frequency and severity. The actuarial reviews and documentation are completed in accordance with professional actuarial standards with reserves established on a basis consistent with GAAP. The selected assumptions reflect the actuary's judgment based on historical data and experience combined with information concerning current underwriting, economic, judicial, regulatory and other influences on ultimate claim settlements.

When estimating IBNR reserves, each insurance and reinsurance business unit segregates business into exposure classes. Within each class, the business is further segregated by either the year in which the contract incepted ("underwriting year"), the year in which the claim occurred ("accident year"), or the year in which the claim is reported ("report year"). Within the Insurance segment, reviews are on an accident year, underwriting year, or report year basis depending on the nature of the business. The Reinsurance segment is reviewed on an underwriting year basis. In each case, management believes the selected method represents an appropriate basis for evaluating the reserve associated with each.

Generally, initial actuarial estimates of IBNR reserves not related to a specific event are based on the loss ratio method applied to each class of business. Actual paid losses and case reserves ("reported losses") are subtracted from expected ultimate losses to determine IBNR reserves. Estimates of the initial expected ultimate losses involve management judgment and are based on historical information for that class of business, which includes loss ratios, market conditions, changes in pricing and conditions, underwriting changes, changes in claims emergence, and other factors that may influence expected ultimate losses.

Over time, as greater numbers of claims are reported, actuarial estimates of IBNR are based on the BF method and loss development techniques. The BF method utilizes actual loss data and the expected patterns of loss emergence, combined with an initial expectation of ultimate losses to determine an estimate of ultimate losses. This method may be appropriate when there is limited actual loss data and a relatively less stable pattern of loss emergence. The chain ladder method utilizes actual loss data and expected patterns of loss emergence to determine an estimate of ultimate losses that is independent of the initial expectation of ultimate losses. This method may be appropriate when there is a relatively stable pattern of loss emergence and a relatively larger number of reported claims. Multiple estimates of ultimate losses using a variety of actuarial methods are calculated for each class of business for each year of loss experience. The Company's actuaries look at each class and determine the most appropriate point estimate based on the characteristics of the particular class and other relevant factors, such as historical ultimate loss ratios, the presence of individual large losses, and known occurrences that have not yet resulted in reported losses. Once the actuaries make their determination of the most appropriate point estimate for each class, this information is aggregated and presented to management for review and approval.

The pattern of loss emergence is determined using actuarial analysis and judgment and is based on the historical patterns of the recording of paid and reported losses, as well as industry information. Information that may cause historical patterns to differ from future patterns is considered and reflected in expected patterns as appropriate. For property, marine and aviation insurance, losses are generally reported within 2 to 3 years from the beginning of the accident year. For casualty insurance, loss emergence patterns can vary from 3 years to over 20 years depending on the type of business. For other insurance, loss emergence patterns generally fall within these ranges. For reinsurance business, loss reporting lags the corresponding insurance classes often by at least one quarter due to the need for loss information to flow from the ceding companies generally via reinsurance intermediaries. Such lags in loss reporting are reflected in the actuary's selections of loss reporting patterns used in establishing our reserves.

Such estimates are not precise because, among other things, they are based on predictions of future developments and estimates of future trends in claim severity, claim frequency and other issues. In the process of estimating IBNR reserves, provisions for economic inflation and changes in the social and legal environment are considered, but involve considerable judgment. When estimating IBNR reserves, more judgment is typically required for lines of business with longer loss emergence patterns.

Due to the low frequency and high severity nature of some of the business the Company underwrites, our reserve estimates are highly dependent on actuarial and management judgment and are therefore uncertain. In property classes, there can be additional uncertainty in loss estimation related to large catastrophe events. With wind events, such as hurricanes, the damage assessment process may take more than a year. The cost of claims is subject to volatility due to supply shortages for construction materials and labor. In the case of earthquakes, the damage assessment process may take several years as buildings are discovered to have structural weaknesses not initially detected. The uncertainty inherent in IBNR reserve estimates is particularly pronounced for casualty coverages, such as excess liability, professional liability and workers' compensation, where information emerges relatively slowly over time.

The three types of property and casualty reserve exposures with the longest tails included in the Company's portfolio are:


•	high layer excess casualty insurance;


•	casualty reinsurance; and


•	discontinued asbestos and run-off environmental insurance and reinsurance liabilities.

Certain aspects of casualty operations complicate the actuarial process for establishing reserves. Certain casualty business written by insurance operations is high layer excess casualty business, meaning that liability attaches after large deductibles, including self-insurance or insurance from other sources. The Company began writing this type of business in 1986 and issued policies in forms that were different from traditional policies used by the industry at that time. Initially, there was a lack of industry data available for this type of business. Consequently, the basis for establishing loss reserves for this type of business was largely based upon judgment and the Company's reported loss experience, which was used as a basis for determining ultimate losses and, therefore, IBNR reserves. Over time, the amount of available historical loss experience data has increased. As a result, there is a larger statistical base to assist in establishing reserves for these excess casualty insurance claims.

High layer excess casualty insurance claims typically involve claims relating to (i) a "shock loss" such as an explosion or transportation accident causing severe damage to persons and/or property over a short period of time, (ii) a "non-shock" loss where a large number of claimants are exposed to injurious conditions over a longer period of time, such as exposure to chemicals or pharmaceuticals or (iii) a professional liability loss such as a medical malpractice claim. In each case, these claims are ultimately settled following extensive negotiations and legal proceedings. This process typically takes 5 to 15 years following the date of loss.

Reinsurance operations by their nature add further complications to the reserving process, particularly for the casualty business written, in that there is an inherent lag in the timing and reporting of a loss event from an insured or ceding company to the reinsurer. This reporting lag creates an even longer period of time between the policy inception and when a claim is finally settled. As a result, more judgment is required to establish reserves for ultimate claims in reinsurance operations.

Casualty reinsurance business involves reserving methods that generally include historical aggregated claim information as reported by ceding companies, combined with the results of claims and underwriting reviews of a sample of the ceding company's claims and underwriting files. Therefore, we do not always receive detailed claim information for this line of business.

Discontinued asbestos and run-off environmental liabilities are attached to certain policies previously written by NAC Re Corp. (now known as XL Reinsurance America Inc.), prior to being acquired by the Company; from business of Winterthur purchased by the Company from AXA Insurance in 2001; from a loss portfolio transfer in 2006; and acquired as a result of the Catlin Acquisition. At December 31, 2017, total gross unpaid losses and loss expenses with respect to these businesses represented less than 1% of unpaid losses and loss expenses of the Company.

Unpaid losses and loss expenses prior to reinsurance recoveries for the years ended December 31, 2017 and 2016 comprise the following:



(U.S. dollars in thousands)	2017		2016
Reserve for reported losses and loss expenses	$	12,869,644	$	10,343,481
Reserve for losses incurred but not reported	16,827,135		15,596,090
Unpaid losses and loss expenses	$	29,696,779	$	25,939,571

Claims Development

Management has determined that the appropriate level of disaggregation for the incurred and paid claims development information best falls into six categories within its two operating segments. This level of disaggregation is consistent with the Company's historical disclosure levels and provides groupings of the Company's insurance and reinsurance businesses of a credible size and with similar claim development characteristics, particularly payment patterns. It should be noted that when estimating IBNR reserves, the Company's Insurance and Reinsurance segments segregate business into exposure classes and a large number of classes are reviewed in total based on coverage, region and policy and loss emergence characteristics. Furthermore, large losses and catastrophe events are evaluated separately.

As noted previously, reserve reviews are carried out on an accident year, underwriting year or report year basis depending on the nature of the business. Typically, reserve reviews are carried out gross of reinsurance with ceded reinsurance recoveries evaluated separately to arrive at net reserves. However, in accordance with accounting guidance, the disclosures presented herein are accident year triangles, presented net of reinsurance recoverables. Underwriting year triangles are converted to an accident year basis using assumptions consistent with the underlying premium earning profiles and considering large losses in their respective accident year. Similarly, ceded reinsurance recoverables are allocated to accident year and class of business in order to present net accident year triangles. While we have compiled the triangles on a best efforts basis, the allocation bases required to develop historical net accident year triangles should be viewed as approximations only.

Within the Insurance segment, there are four business groups: Property; Specialty; Professional; and Casualty and other. Within the Reinsurance segment, all major products fall within two categories: Property and Other Short-Tail Lines, and Casualty and Other Long-Tail Lines. The Company has also provided aggregate triangles for the total Company and the Insurance and Reinsurance segments to reflect the levels at which the Company manages its business.

The nature of the Company's high excess of loss liability and catastrophe business can result in loss events that are both irregular and significant. Similarly, adjustments to reserves for individual years can be irregular and significant. Such adjustments are part of the normal course of business of the Company. There is no assurance that conditions and trends that have affected the development of liabilities in the past will continue. Furthermore, changes in business mix over time, including discontinuation of certain classes of business and growth in others, can impact development patterns. Accordingly, it may not be appropriate to extrapolate future redundancies or deficiencies based on the Company's historical results.

As discussed in further detail in part (c), except for certain workers’ compensation (including long term disability) liabilities and certain bodily injury liability claims emanating from U.K. exposures, predominantly from the U.K. motor liability portfolio, the Company does not discount its unpaid losses and loss expenses. The development in the tables included herein is presented on a gross of discount basis, reflecting the undiscounted case reserves established using a tabular reserving methodology and the undiscounted IBNR. The amount of discount is then determined for both Case and IBNR reserves and booked accordingly. The amount of discount is included in the reconciliation of the reserves to the Consolidated Balance Sheet.

As a result of the Catlin Acquisition in 2015 as noted in Note 2(f), "Acquisitions and Disposals - Catlin Acquisition, the Company acquired approximately $5.4 billion of unpaid claims liability, net of reinsurance, as well as $101.3 million of unpaid claims liability, net of reinsurance due to the Allied Acquisition in 2016 as noted in Note 2(d), "Acquisitions and Disposals - Allied Acquisition." For purposes of this disclosure, the Company has applied the retrospective method for these acquired reserves, including the combined companies' incurred and paid claim development histories throughout the tables. It should be noted that historical reserves for the acquired businesses were established by the respective companies using methods, assumptions and procedures then in effect which may differ from the Company's current reserving bases.

The Company has also revalued all historical data using exchange rates at December 31, 2017 in order to mitigate the effect of foreign exchange on the development throughout the triangles. Due to currency mix changes from one year end to the next, revaluation of incurred losses will result in different year-on-year movements within the triangles with each annual presentation. This approach for handling foreign exchange movements within the triangles differs somewhat from the underlying calculation of prior year development in our financial statements due to the inclusion of historical loss payments as well as reserves and the level of granularity used in the calculation. The differences have been deemed not to be material.

The number of reported claims is provided for the Insurance segment on a per claim basis and excludes those claims which closed with no payment. It should be noted that certain claims may eventually close with no payment in the future at which time the claims will be excluded on a prospective basis. The number of reported claims can vary over time due to changes in mix of business and policy terms and conditions. In the Notes to the 2016 Consolidated Financial Statements, Insurance segment claim counts included nil claims for a portion of the portfolio, and excluded the remainder. In the current year Notes to the Consolidated Financial Statements, the Company has fully aligned the portfolio in this regard; nil claims have been entirely excluded from the claim counts. Had this alignment occurred in the prior year, the reported number of claims in the 2016 Consolidated Financial Statements would have been lower by a range of between 3% and 13% across accident years. For the Reinsurance segment, the number of reported claims is not provided due to the common industry practice of cedants reporting loss information for proportional treaties on a bulk basis without comprehensive claim details. Therefore, it is impractical to provide meaningful claim count detail for our Reinsurance business.

The Average Annual Percentage Payout of Incurred Losses for each age has been derived using a weighted average of all cumulative paid amounts as a percentage of 2017 incurred losses and allocated loss expenses. The average annual percentage payout of incurred losses presented are unaudited and are presented as supplementary information. The average annual percentage payout can change over time due to changes in business mix, policy terms and conditions as well as ceded reinsurance arrangements. As an example, due to a large multi-line quota share contract and multi-year non-standard auto deals written in the more recent years and included within our Reinsurance Casualty and Other Long-Tail portfolio, there is an upward trend in average annual percentage payout observed from last year.

As previously noted, the process of establishing reserves for unpaid P&C claims can be complex and is subject to considerable variability, as it requires the use of judgment to make informed estimates. These estimates are based on numerous factors, and may be revised as additional experience and data become available, as new or improved methodologies are developed or as current laws change. In addition, there is no assurance that conditions and trends that have affected the development of liabilities in the past will continue. This variability may result in either favorable or adverse development in the Incurred Loss and Allocated Loss Expense triangles provided by the Company. The variability experienced to date has been in line with management’s expectations given the underlying business written by the Company. We have provided additional commentary for the individual categories below:

For the Insurance segment in total, while individual accident years have both favorable and adverse incremental development across the triangle, accident years 2008 to 2013 have all developed favorably since the first evaluation. The 2014 to 2016 accident years reflect adverse development due primarily to large loss activity in several lines, including professional and casualty.

For the Insurance Property category, individual accident years have generally developed favorably as updated loss estimates were received and volatility in the loss estimates decreased. The 2014 accident year experienced adverse development from the 2014 evaluation to the 2015 evaluation due to development on a large fire loss which occurred in late December 2014. The 2014 accident year then developed favorably from the 2015 evaluation to the 2016 evaluation. The 2015 accident year experienced adverse development from the first evaluation in 2015 to the second evaluation in 2016 due to movements on several claims in the international property and construction businesses.

For the Insurance Specialty category, individual accident years have generally developed favorably, though with decreasing magnitude over time. The adverse experience emerging on the 2016 accident year has been driven by unfavorable attritional and large claims experience in several portfolios. This category includes a range of businesses with both short-tail and medium-tail exposures. Typically, development in the second year relates to short-tail lines with development on medium-tail business being reflected at subsequent evaluations.

For the Insurance Professional category, individual accident years have both favorable and adverse development across the triangle. These developments relate to the complexity associated with claims in this class of business. In 2008, the Company strengthened its reserves for the 2007 report/accident year due to the developing subprime-credit crisis. Due to the claims-made nature of the underlying Professional policies, the subprime-credit crisis impacted the 2008 to 2012 report years and reserves were re-allocated from the 2007 report year to these later years as claims developed. The cumulative impact of the credit crisis and developing loss trends were more severe than originally expected for these years. The 2014-2016 report years have experienced adverse development due to large loss activity in the international financial lines management liability book and the discontinued design subcontractors default portfolio.

For the Insurance Casualty and Other category, individual accident years have both favorable and adverse development across the triangle. These developments relate to the complexity associated with claims in this class of business and the high level of attachment of the Company’s excess policies. The 2010 accident year experienced more adverse development than other accident years due to development on the Deepwater Horizon event. The 2013 to 2015 accident years reflect adverse development due to large loss activity relating to the excess casualty portfolio and strengthening of the excess and surplus portfolio and the newly acquired Allied business. The 2016 accident year shows minimal adverse development during 2017.

For the Reinsurance Segment in total, while individual accident years have both favorable and adverse incremental development across the triangle, all accident years except for the 2016 accident year developed favorably since the first evaluation. The modest unfavorable development on the 2016 accident year emanates from the Property and Other Short Tail category as noted below.

For the Reinsurance Property and Other Short Tail category, individual accident years have generally developed favorably as updated loss estimates were received and volatility in the loss estimates decreased. The two outliers were the 2010 and 2012 accident years where there was modest adverse development related to large loss events from the business acquired in the Catlin Acquisition. Specifically, the 2010 adverse development relates to the Buncefield Explosion and the New Zealand Darfield Earthquake offset by more recent favorable developments on other large losses and attritional experience. The 2012 development relates to Costa Concordia and Superstorm Sandy. The favorable development on the 2011 accident year relates in part to reductions on the Japan Earthquake and Tsunami event also within the business acquired in the Catlin Acquisition. As noted earlier, the historical reserves for the acquired businesses were established by the respective companies using methods, assumptions and procedures then in effect which may differ from the Company's current reserving bases. The recent favorable development on 2013 mainly relates to releases on Typhoon Fitow, Central European Floods and favorable attritional experience across all short tailed lines. The unfavorable development on the 2016 accident year relates to deteriorations on the New Zealand Kaikoura Earthquake and Texas Hailstorm events.

For the Reinsurance Casualty and Other Long Tail category, the earlier years had modest favorable development and the later years had modest adverse development. The adverse development for the later accident years relates to changes in reserving methodology for certain long tail lines of business that occurred in calendar years 2012 and 2015. In 2012, the Company changed its methodology to hold an explicit discount on loss reserves for U.K. bodily injury claims expected to settle via Periodical Payment Orders ("PPOs"). As these claims became more prevalent and costly, reserves were strengthened on an undiscounted basis. However, with the implementation of discounting, there was a minimal change in the loss reserves, net of the discount. Similarly, a significant portion of the increase in the Incurred Losses and Allocated Loss Expense, Net of Reinsurance for the 2015 calendar year is due to a change in the methodology used to determine the undiscounted ultimate losses for the reinsurance workers' compensation liabilities acquired in the Catlin Acquisition resulting in a large increase in the undiscounted losses but an insignificant change in the discounted losses. The increase in incurred losses and unallocated loss expenses for the 2017 calendar year is driven by the change in the Ogden discount rate (from 2.5% to -0.75%) used by the courts to determine lump sum compensation for claimants in the UK impacting UK motor, Employer's and General Liability classes. This is partially offset by favorable attritional experience on the North America Casualty book.

Total Property and Casualty



(In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	5,644,208	$	5,735,428	$	5,651,657	$	5,674,761	$	5,631,593	$	5,603,554	$	5,572,963	$	5,510,523	$	5,471,441	$	5,410,125	$	213,925	N/A
2009			4,763,117		4,755,362		4,668,243		4,689,064		4,680,173		4,685,356		4,555,586		4,525,234		4,542,173		293,117		N/A
2010					5,141,028		5,272,265		5,158,742		5,178,036		5,127,836		5,109,862		5,138,545		5,053,432		300,001		N/A
2011							6,430,567		6,392,279		6,306,319		6,175,271		6,311,990		6,276,173		6,226,953		433,196		N/A
2012									5,869,907		5,836,701		5,808,941		5,930,172		5,837,626		5,827,240		566,059		N/A
2013											5,767,068		5,777,217		5,739,200		5,632,776		5,526,922		652,927		N/A
2014													5,368,693		5,549,389		5,580,769		5,574,378		987,715		N/A
2015															5,540,823		5,678,720		5,864,953		1,405,335		N/A
2016																	6,182,999		6,427,610		2,013,460		N/A
2017																			8,108,442		4,386,436		N/A
																			$	58,562,228	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	810,334	$	2,051,520	$	2,934,270	$	3,539,510	$	4,049,900	$	4,352,467	$	4,568,478	$	4,704,623	$	4,827,462	$	4,897,567
2009			657,811		1,573,893		2,254,270		2,731,005		3,204,371		3,460,344		3,650,893		3,767,363		3,844,074
2010					873,754		1,926,916		2,740,308		3,252,357		3,634,321		3,971,942		4,212,573		4,358,655
2011							1,285,733		2,963,941		3,778,977		4,373,375		4,883,707		5,175,876		5,375,172
2012									979,204		2,317,760		3,232,741		3,903,535		4,312,155		4,665,888
2013											1,009,683		2,285,432		3,171,205		3,755,115		4,207,557
2014													985,112		2,322,853		3,188,259		3,765,670
2015															997,289		2,217,824		3,277,189
2016																	1,233,032		2,769,701
2017																			1,684,974
																			$	38,846,447
	All outstanding liabilities prior to 2008, net of reinsurance																		2,451,126
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	22,166,907



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	18	%	23	%	15	%	11	%	8	%	5	%	4	%	2	%	2	%	3	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims

Insurance Segment



(In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	3,980,331	$	4,082,887	$	4,042,042	$	4,083,129	$	4,027,990	$	4,000,716	$	3,970,698	$	3,934,337	$	3,898,706	$	3,859,215	$	125,683	48,668
2009			3,566,518		3,589,904		3,551,370		3,579,030		3,580,582		3,601,916		3,469,966		3,447,870		3,467,258		179,179		48,912
2010					3,806,180		3,920,528		3,805,979		3,842,324		3,794,776		3,769,113		3,807,684		3,737,724		190,030		55,114
2011							4,140,334		4,120,075		4,139,325		4,049,553		4,154,898		4,127,808		4,083,928		292,990		59,373
2012									3,991,564		3,931,116		3,923,936		4,055,833		3,984,388		3,973,579		364,324		64,064
2013											4,072,919		4,148,375		4,125,518		4,064,032		3,982,810		449,668		70,379
2014													3,873,356		4,049,578		4,111,762		4,126,635		759,437		80,946
2015															3,975,009		4,168,619		4,348,859		1,058,392		94,968
2016																	4,294,206		4,526,453		1,459,995		102,466
2017																			5,068,500		2,435,748		73,518
																			$	41,174,961	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	476,792	$	1,383,392	$	2,032,058	$	2,498,765	$	2,922,681	$	3,156,209	$	3,325,230	$	3,431,608	$	3,512,792	$	3,561,228
2009			477,677		1,172,186		1,712,626		2,101,695		2,498,379		2,706,905		2,864,085		2,946,407		3,002,238
2010					627,377		1,423,331		2,041,175		2,444,498		2,764,877		3,001,709		3,163,363		3,273,536
2011							674,219		1,675,220		2,289,261		2,739,159		3,159,121		3,394,821		3,535,878
2012									658,877		1,520,685		2,145,780		2,660,153		2,976,781		3,228,221
2013											683,757		1,567,382		2,220,578		2,691,262		3,039,989
2014													692,365		1,650,664		2,338,259		2,771,499
2015															715,111		1,613,855		2,396,659
2016																	889,975		1,923,192
2017																			1,076,889
																			$	27,809,329
	All outstanding liabilities prior to 2008, net of reinsurance																		988,847
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	14,354,479



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	17	%	22	%	16	%	11	%	9	%	6	%	4	%	2	%	2	%	3	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Property (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	850,761	$	849,039	$	815,929	$	797,027	$	793,740	$	786,429	$	785,673	$	783,904	$	782,156	$	784,699	$	12,884	7,860
2009			409,525		384,987		368,148		360,747		354,587		354,888		352,427		350,438		356,760		5,625		6,736
2010					614,975		629,454		600,272		582,803		576,699		584,289		581,195		581,492		8,919		7,604
2011							1,015,292		950,884		927,416		892,650		882,602		875,589		871,842		71		9,239
2012									706,411		680,608		655,395		656,688		648,211		645,148		6,639		10,197
2013											766,897		748,537		725,484		718,804		716,067		10,823		11,381
2014													729,439		766,516		757,109		756,646		12,039		13,954
2015															822,971		846,954		839,474		38,686		16,747
2016																	989,575		1,113,153		51,908		20,372
2017																			1,655,009		275,986		17,088
																			$	8,320,290	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	156,169	$	480,476	$	619,072	$	673,976	$	751,128	$	769,740	$	772,250	$	764,451	$	767,073	$	768,092
2009			88,549		198,738		262,119		295,786		316,849		319,161		338,609		341,939		346,694
2010					172,596		396,953		495,909		544,973		556,204		535,734		541,777		546,255
2011							222,071		637,440		777,503		819,464		849,147		850,727		858,866
2012									168,359		404,469		550,774		594,798		614,891		625,089
2013											172,866		474,473		613,722		666,485		683,854
2014													186,475		523,596		674,517		708,562
2015															231,415		503,459		666,765
2016																	334,272		699,497
2017																			500,273
																			$	6,403,947
	All outstanding liabilities prior to 2008, net of reinsurance																		13,430
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	1,929,773



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	27	%	38	%	19	%	7	%	4	%	—	%	1	%	(1	)%	2	%	—	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Specialty (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)			Number of Claims
2008	$	891,890	$	968,492	$	910,335	$	890,963	$	876,491	$	864,078	$	837,617	$	856,842	$	851,009	$	839,244	$	(2,387	)	19,242
2009			1,014,909		1,008,485		936,862		909,680		897,121		887,959		831,410		822,085		821,551		1,578			18,360
2010					1,030,506		987,403		918,623		901,020		875,049		863,079		863,284		860,409		11,198			21,791
2011							999,603		1,000,374		962,256		925,539		940,624		934,612		922,492		24,446			22,704
2012									1,039,752		986,668		946,199		936,682		920,827		907,145		7,976			25,341
2013											969,561		1,011,519		973,591		973,662		963,962		23,499			28,501
2014													972,197		988,726		971,827		962,638		28,881			35,063
2015															995,703		1,054,941		1,054,762		76,262			43,706
2016																	1,107,572		1,174,955		120,726			48,416
2017																			1,112,192		403,497			33,402
																			$	9,619,350	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	253,344	$	529,159	$	659,645	$	722,183	$	765,430	$	791,525	$	809,870	$	817,093	$	821,401	$	821,249
2009			321,635		568,559		680,060		733,742		758,202		776,899		787,163		790,078		796,935
2010					327,917		566,060		680,947		736,611		780,483		798,099		807,477		816,193
2011							303,685		622,701		759,238		818,112		842,024		865,691		873,203
2012									323,488		610,222		722,133		793,659		830,272		848,480
2013											343,578		617,540		741,972		818,201		859,290
2014													348,944		635,917		768,421		831,653
2015															346,794		675,618		828,146
2016																	424,069		800,160
2017																			433,901
																			$	7,909,210
	All outstanding liabilities prior to 2008, net of reinsurance																		132,594
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	1,842,734



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	36	%	31	%	14	%	7	%	4	%	3	%	1	%	1	%	1	%	—	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Professional (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	1,047,124	$	1,101,965	$	1,147,534	$	1,239,730	$	1,218,280	$	1,198,484	$	1,194,919	$	1,162,130	$	1,140,790	$	1,131,120	$	26,453	4,165
2009			981,970		1,050,410		1,112,512		1,180,339		1,219,714		1,229,584		1,196,459		1,192,299		1,199,359		68,143		4,851
2010					1,006,646		1,003,305		975,366		1,053,660		1,013,567		1,035,210		1,081,736		1,053,011		56,712		4,517
2011							987,023		978,863		1,035,722		1,050,516		1,123,136		1,133,524		1,130,481		141,147		4,203
2012									995,783		997,484		1,033,040		1,148,277		1,142,555		1,155,566		174,871		4,295
2013											984,798		982,485		960,557		938,328		863,145		159,645		4,503
2014													762,491		815,411		857,762		883,975		272,364		4,602
2015															772,779		816,200		935,466		372,222		5,120
2016																	750,041		772,377		477,454		4,490
2017																			854,050		727,596		2,530
																			$	9,978,550	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	18,371	$	186,817	$	350,967	$	522,556	$	706,956	$	793,754	$	865,795	$	924,630	$	986,705	$	996,837
2009			22,596		162,488		341,997		516,995		758,394		852,865		937,925		965,159		982,106
2010					22,132		157,847		330,563		487,964		632,809		746,509		816,307		851,235
2011							29,116		146,330		319,404		486,621		691,769		827,268		890,169
2012									44,763		197,103		382,218		599,630		723,313		839,544
2013											36,847		154,971		309,475		465,463		587,897
2014													17,185		140,718		315,969		453,178
2015															22,667		140,307		319,050
2016																	23,688		141,813
2017																			21,074
																			$	6,082,903
	All outstanding liabilities prior to 2008, net of reinsurance																		160,193
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	4,055,840



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	3	%	13	%	16	%	16	%	15	%	9	%	6	%	3	%	3	%	4	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Casualty and other (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	1,190,556	$	1,163,391	$	1,168,244	$	1,155,409	$	1,139,479	$	1,151,725	$	1,152,489	$	1,131,461	$	1,124,751	$	1,104,152	$	88,733	17,401
2009			1,160,114		1,146,022		1,133,848		1,128,264		1,109,160		1,129,485		1,089,670		1,083,048		1,089,588		103,833		18,965
2010					1,154,053		1,300,366		1,311,718		1,304,841		1,329,461		1,286,535		1,281,469		1,242,812		113,201		21,202
2011							1,138,416		1,189,954		1,213,931		1,180,848		1,208,536		1,184,083		1,159,113		127,326		23,227
2012									1,249,618		1,266,356		1,289,302		1,314,186		1,272,795		1,265,720		174,838		24,231
2013											1,351,663		1,405,834		1,465,886		1,433,238		1,439,636		255,701		25,994
2014													1,409,229		1,478,925		1,525,064		1,523,376		446,153		27,327
2015															1,383,556		1,450,524		1,519,157		571,222		29,395
2016																	1,447,018		1,465,968		809,907		29,188
2017																			1,447,249		1,028,669		20,498
																			$	13,256,771	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	48,908	$	186,940	$	402,374	$	580,050	$	699,167	$	801,190	$	877,315	$	925,434	$	937,613	$	975,050
2009			44,897		242,401		428,450		555,172		664,934		757,980		800,388		849,231		876,503
2010					104,732		302,471		533,756		674,950		795,381		921,367		997,802		1,059,853
2011							119,347		268,749		433,116		614,962		776,181		851,135		913,640
2012									122,267		308,891		490,655		672,066		808,305		915,108
2013											130,466		320,398		555,409		741,113		908,948
2014													139,761		350,433		579,352		778,106
2015															114,235		294,471		582,698
2016																	107,946		281,722
2017																			121,641
																			$	7,413,269
	All outstanding liabilities prior to 2008, net of reinsurance																		682,630
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	6,526,132



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	8	%	14	%	17	%	14	%	11	%	9	%	6	%	4	%	—	%	6	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims

Reinsurance Segment



(In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	1,663,877	$	1,652,541	$	1,609,615	$	1,591,632	$	1,603,603	$	1,602,838	$	1,602,265	$	1,576,186	$	1,572,735	$	1,550,910	$	88,242	N/A
2009			1,196,599		1,165,458		1,116,873		1,110,034		1,099,591		1,083,440		1,085,620		1,077,364		1,074,915		113,938		N/A
2010					1,334,848		1,351,737		1,352,763		1,335,712		1,333,060		1,340,749		1,330,861		1,315,708		109,971		N/A
2011							2,290,233		2,272,204		2,166,994		2,125,718		2,157,092		2,148,365		2,143,025		140,206		N/A
2012									1,878,343		1,905,585		1,885,005		1,874,339		1,853,238		1,853,661		201,735		N/A
2013											1,694,149		1,628,842		1,613,682		1,568,744		1,544,112		203,259		N/A
2014													1,495,337		1,499,811		1,469,007		1,447,743		228,278		N/A
2015															1,565,814		1,510,101		1,516,094		346,943		N/A
2016																	1,888,793		1,901,157		553,465		N/A
2017																			3,039,942		1,950,688		N/A
																			$	17,387,267	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	333,542	$	668,128	$	902,212	$	1,040,745	$	1,127,219	$	1,196,258	$	1,243,248	$	1,273,015	$	1,314,670	$	1,336,339
2009			180,134		401,707		541,644		629,310		705,992		753,439		786,808		820,956		841,836
2010					246,377		503,585		699,133		807,859		869,444		970,233		1,049,210		1,085,119
2011							611,514		1,288,721		1,489,716		1,634,216		1,724,586		1,781,055		1,839,294
2012									320,327		797,075		1,086,961		1,243,382		1,335,374		1,437,667
2013											325,926		718,050		950,627		1,063,853		1,167,568
2014													292,747		672,189		850,000		994,171
2015															282,178		603,969		880,530
2016																	343,057		846,509
2017																			608,085
																			$	11,037,118
	All outstanding liabilities prior to 2008, net of reinsurance																		1,462,279
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	7,812,428



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	20	%	25	%	14	%	8	%	5	%	4	%	4	%	—	%	1	%	4	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Property and Other Short-tail Lines (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)			Number of Claims
2008	$	944,428	$	927,527	$	906,400	$	883,361	$	867,449	$	863,157	$	867,653	$	860,502	$	867,774	$	843,257	$	383		N/A
2009			595,960		555,200		518,460		499,580		489,873		485,983		479,643		484,055		476,171		172			N/A
2010					856,962		875,225		881,152		883,526		890,473		871,329		873,474		853,011		(13		)	N/A
2011							1,778,947		1,749,879		1,665,442		1,639,503		1,644,225		1,636,012		1,628,065		36,404			N/A
2012									1,293,247		1,315,130		1,305,260		1,274,482		1,263,237		1,264,859		65,579			N/A
2013											1,119,339		1,065,389		1,022,634		985,614		952,356		10,501			N/A
2014													899,370		877,472		836,156		809,032		18,848			N/A
2015															912,777		855,184		864,595		111,925			N/A
2016																	1,168,219		1,183,480		184,699			N/A
2017																			1,970,911		1,142,221			N/A
																			$	10,845,737	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	296,808	$	549,370	$	702,796	$	767,424	$	794,530	$	811,850	$	816,846	$	814,278	$	827,401	$	830,128
2009			147,904		315,599		400,250		432,286		452,112		456,855		456,520		464,315		466,604
2010					229,065		453,814		605,997		669,277		694,525		762,176		814,534		831,559
2011							595,601		1,228,014		1,382,680		1,473,573		1,515,800		1,537,012		1,560,091
2012									294,986		723,095		946,583		1,043,324		1,084,530		1,130,777
2013											297,848		633,594		805,866		859,679		909,414
2014													254,289		571,832		676,511		740,624
2015															238,030		483,754		656,520
2016																	275,958		679,948
2017																			468,988
																			$	8,274,653
	All outstanding liabilities prior to 2008, net of reinsurance																		209,170
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	2,780,254



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	29	%	35	%	17	%	7	%	3	%	2	%	3	%	1	%	1	%	—	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims



Casualty and Other Long-Tail Lines (In thousands, except claim amounts)
Incurred Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,																				As of Dec 31, 2017
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		IBNR (1)		Number of Claims
2008	$	719,449	$	725,014	$	703,215	$	708,271	$	736,154	$	739,681	$	734,612	$	715,684	$	704,961	$	707,653	$	87,859	N/A
2009			600,639		610,258		598,413		610,454		609,718		597,457		605,977		593,309		598,744		113,766		N/A
2010					477,886		476,512		471,611		452,186		442,587		469,420		457,387		462,697		109,984		N/A
2011							511,286		522,325		501,552		486,215		512,867		512,353		514,960		103,802		N/A
2012									585,096		590,455		579,745		599,857		590,001		588,802		136,156		N/A
2013											574,810		563,453		591,048		583,130		591,756		192,758		N/A
2014													595,967		622,339		632,851		638,711		209,430		N/A
2015															653,037		654,917		651,499		235,018		N/A
2016																	720,574		717,677		368,766		N/A
2017																			1,069,031		808,467		N/A
																			$	6,541,530	Total

Cumulative Paid Losses and Allocated Loss Expenses, Net of Reinsurance
	For the Years Ended December 31,
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Accident Year	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	36,734	$	118,758	$	199,416	$	273,321	$	332,689	$	384,408	$	426,402	$	458,737	$	487,269	$	506,211
2009			32,230		86,108		141,394		197,024		253,880		296,584		330,288		356,641		375,232
2010					17,312		49,771		93,136		138,582		174,919		208,057		234,676		253,560
2011							15,913		60,707		107,036		160,643		208,786		244,043		279,203
2012									25,341		73,980		140,378		200,058		250,844		306,890
2013											28,078		84,456		144,761		204,174		258,154
2014													38,458		100,357		173,489		253,547
2015															44,148		120,215		224,010
2016																	67,099		166,561
2017																			139,097
																			$	2,762,465
	All outstanding liabilities prior to 2008, net of reinsurance																		1,253,109
	Liabilities for unpaid losses and loss expenses, net of reinsurance																		$	5,032,174



Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	7	%	9	%	10	%	9	%	8	%	7	%	6	%	5	%	6	%	6	%

____________


(1)	Total IBNR Liabilities Plus Expected Development on Reported Claims

Reconciliation



(U.S. dollars in thousands)	December 31, 2017
Net outstanding liabilities
Insurance Segment
Property	$	1,929,773
Specialty	1,842,734
Professional	4,055,840
Casualty and other	6,526,132
Reinsurance Segment
Property and Other Short-Tail lines	2,780,254
Casualty and Other Long-Tail lines	5,032,174
Subtotal, disaggregated triangles	$	22,166,907

Unallocated loss expenses	$	578,995
Discount (1)	(415,479		)
Provision for uncollectible reinsurance	41,103
Other	85,807
Total net liability for unpaid losses and loss expenses	$	22,457,333

Reinsurance recoverable on unpaid losses
Insurance Segment
Property	$	959,498
Specialty	672,794
Professional	1,386,847
Casualty and other	3,367,498
Reinsurance Segment
Property and Other Short-Tail lines	647,194
Casualty and Other Long-Tail lines	125,003
Other	80,612
Total recoverable on unpaid losses and loss expenses	$	7,239,446

Unpaid losses and loss expenses	$	29,696,779

___________


(1)	As noted in Note 10(c), "Losses and Loss Expenses - Loss Reserve Discounting," the Company discounts only certain workers' compensation (including long term disability) liabilities and certain bodily injury liability claims, emanating from U.K. exposures, predominantly from the U.K. motor liability portfolio.

(b) Net losses and loss expenses incurred

Net losses and loss expenses incurred for the years indicated are comprised of:



(U.S. dollars in thousands)	2017			2016			2015
Loss and loss expenses payments	$	8,037,317		$	6,828,012		$	6,505,075
Change in unpaid losses and loss expenses	3,184,307			976,401			(168,263		)
Change in unpaid losses and loss expenses recoverable	(1,646,432		)	(238,086		)	(440,189		)
Paid loss recoveries	(1,573,272		)	(1,493,492		)	(1,130,423		)
Net losses and loss expenses incurred	$	8,001,920		$	6,072,835		$	4,766,200

The following table presents the net (favorable) adverse prior year loss development of the Company's loss and loss expense reserves for its property and casualty operations by operating segment for each of the years indicated:



(U.S. dollars in thousands)	2017			2016			2015
Insurance segment	$	(41,759	)	$	(91,459	)	$	(65,030	)
Reinsurance segment	(106,011		)	(210,083		)	(241,600		)
Total	$	(147,770	)	$	(301,542	)	$	(306,630	)

The significant developments in prior year loss reserve estimates for each of the years indicated within the Company's Insurance and Reinsurance segments are discussed below.

Insurance Segment

The following table summarizes the net (favorable) adverse prior year development by business group relating to the Insurance segment for the years ended December 31, 2017, 2016 and 2015:



(U.S. dollars in thousands)	2017			2016			2015
Property	$	96,383		$	(38,078	)	$	(6,534	)
Specialty	(4,474		)	(5,658		)	(93,043		)
Professional	(9,569		)	10,897			5,740
Casualty and other	(124,099		)	(58,620		)	28,807
Total	$	(41,759	)	$	(91,459	)	$	(65,030	)

Net favorable prior year reserve development of $41.8 million for the year ended December 31, 2017 for the Insurance segment. This amount differs from the implied change in ultimate losses that can be calculated from the above triangles because the triangles exclude accident years prior to 2007 as well as minor business and, as noted earlier, utilize a different approach for handling foreign exchange. The total net prior year development of $41.8 million was driven by the following:

•

For property lines, net prior year development was $96.4 million unfavorable. This was driven by adverse attritional loss experience on the 2015 and 2016 underwriting years within the London wholesale property book, which led to strengthening of $62.2 million. In addition, significant large loss experience primarily on 2016 losses on the energy property book resulted in strengthening of $39.9 million.


•	For specialty lines, net prior year development was $4.5 million favorable. This was driven by better than expected attritional loss experience in aerospace. This was partially offset by worse than expected large loss experience in more recent years in the crisis management and political risk & trade credit portfolios.

•

For professional lines, net prior year development was $9.6 million favorable. This was driven by releases of favorable experience in the core standard commercial portfolio in North America on the 2014 and prior exposure years. This was partially offset by strengthening in the professional select miscellaneous error and omissions portfolio and by strengthening in the international financial lines management liability book due to significant large loss experience primarily in 2014 and 2015 exposure years.

•

For casualty and other lines, net prior year development was $124.1 million favorable. This was driven by consistent benign experience on a mature North America casualty portfolio resulting in releases of $64.7 million, as well as reductions to reflect better than expected loss experience reported on North America construction and global risk management. This was partially offset by strengthening to reflect worse than expected loss experience reported on the excess and surplus business.

Net favorable prior year reserve development totaled $91.5 million for the Insurance segment for the year ended December 31, 2016. Casualty benefited from release in international casualty primarily to reflect better than expected loss experience reported on the general and professional liability portfolios, predominantly on the 2011 and prior years. Better than expected loss experience reported for both catastrophe and non-catastrophe exposures led to release in property. Significant large loss activity on the international financial lines management liability book led to strengthening in professional.

Net favorable prior year reserve development totaled $65.0 million for the Insurance segment for the year ended December 31, 2015. Specialty benefited from releases in marine, the discontinued international political risk portfolio due to a

favorable settlement of a loss on the 2009 accident year, and reductions in the discontinued specialty book. Casualty was

subject to adverse development with deteriorations in excess and surplus and a large claim in the surety portfolio partially offset

by releases in the excess casualty book and international casualty reflecting better than expected loss experience. Strengthening

in the core U.S. standard commercial book and select accountants and public entities portfolios led to overall adverse

development in Professional.

There is no assurance that conditions and trends that have affected the development of liabilities in the past will continue. Accordingly, it may not be appropriate to extrapolate future redundancies or deficiencies based on the Company's historical results.

Reinsurance Segment

The following table summarizes the net (favorable) adverse prior year development by line of business relating to the Reinsurance segment for the years ended December 31, 2017, 2016 and 2015:



(U.S. dollars in thousands)	2017			2016			2015
Property and Other Short-Tail Lines	$	(140,771	)	$	(134,440	)	$	(173,754	)
Casualty and Other Long-Tail Lines	34,760			(75,643		)	(67,846		)
Total	$	(106,011	)	$	(210,083	)	$	(241,600	)

Net favorable prior year reserve development for the year ended December 31, 2017 totaled $106.0 million for the Reinsurance segment. This amount differs from the implied change in ultimate losses that can be calculated from the above triangles because the triangles exclude accident years prior to 2007 as well as minor business and, as noted earlier, utilize a different approach for handling foreign exchange. The total net prior year development of $106.0 million was attributable to the following:


•	Net favorable prior year development for the short-tail lines totaled $140.8 million. Details of the significant components are as follows:


◦	For property catastrophe lines, net prior year development was $63.0 million favorable. This was mainly to releases from our reserves for older catastrophes losses and better than expected experience on attritional losses.


◦	For property other lines, net prior year development was $63.1 million favorable. This was mainly driven by favorable experience on older catastrophes and large losses and better than expected experience on attritional losses.


◦	For specialty lines, net prior year development was $14.6 million favorable. This was mainly due to favorable catastrophe and large loss experience and better than expected development on attritional losses. This was partially offset by strengthening on one large loss in the aviation book.


•	Net unfavorable prior year development for the long-tail lines totaled $34.8 million. Details of the significant components are as follows:


◦	For casualty lines, net prior year development was $46.3 million unfavorable primarily due to the change in the Ogden discount rate from 2.5% to negative 0.75% and unfavorable development on large losses.


◦	For other lines, net prior year development was $11.6 million favorable largely due to better than expected experience on attritional losses, mainly on the credit and surety book and on the whole account book.

Net favorable prior year reserve development totaled $210.1 million for the year ended December 31, 2016. The short-tail lines benefited from $25.6 million in favorable development from property other lines, $76.6 million favorable development in property catastrophe lines and $32.2 million in favorable development within specialty lines. The release in long tail lines was due to favorable development of $65.5 million and $10.0 million in casualty and other, respectively.

Net favorable prior year reserve development totaled $241.6 million for the year ended December 31, 2015. The short-tail lines benefited from $88.9 million in favorable development from property other lines, $50.3 million favorable development in property catastrophe lines and $34.6 million in favorable marine and aviation development. The release in long-tail lines was due to favorable development of $40.1 million and $27.8 million in casualty and other, respectively.

Except for certain workers' compensation (including long term disability) liabilities and certain bodily injury liability claims, emanating from U.K. exposures, predominantly from the U.K. motor liability portfolio, the Company does not discount its unpaid losses and loss expenses.

The Company utilizes tabular reserving for workers' compensation (including long-term disability) unpaid losses that are considered fixed and determinable, and discounts such losses using an interest rate of 3.75% in 2017 and 2016. The interest rate approximates the implied return on the market-based assets supporting the expected cash flows of our liabilities. The tabular reserving methodology results in applying uniform and consistent criteria for establishing expected future indemnity and medical payments (including an explicit factor for inflation) and the use of mortality tables to determine expected payment periods. Tabular unpaid losses and loss expenses, net of reinsurance, at December 31, 2017 and 2016 on an undiscounted basis were $762.8 million and $727.4 million, respectively. The aggregate discount for the time value of money deducted to derive the liability for unpaid losses and loss expenses were $295.8 million and $287.7 million at December 31, 2017 and 2016, respectively. The related discounted unpaid losses and loss expenses were $467.0 million and $439.7 million at December 31, 2017 and 2016, respectively. The interest accretion related to the unwind of the discounted reserves was $19.2 million and $18.6 million during the years ended December 31, 2017 and 2016, respectively. This interest accretion was recorded in the incurred loss line as adverse prior year development.

The Company records a specific reserve allowance for Periodical Payment Orders ("PPOs") related to bodily injury liability claims. This allowance includes the unpaid losses for claims already settled and notified as PPOs at December 31, 2017, as well as the unpaid losses for claims to be settled in the future. The future care element of the unpaid losses was discounted using an interest rate of 2% at both December 31, 2017 and 2016. Unpaid losses and loss expenses, net of reinsurance, at December 31, 2017 and 2016 on an undiscounted basis were $269.9 million and $281.6 million, respectively. The aggregate discount for the time value of money deducted to derive the liability for the unpaid losses and loss expenses were $119.7 million and $125.9 million at December 31, 2017 and 2016. After discounting the future care element, the unpaid losses and loss expenses were $150.2 million and $155.7 million at December 31, 2017 and 2016, respectively. The decrease in the net undiscounted unpaid losses and loss expenses between December 31, 2017 and 2016 is mainly due to foreign exchange rate movements. The interest accretion related to the unwind of the discounted reserves was $2.8 million during the calendar years ended December 31, 2017 and 2016. This interest accretion was recorded in the incurred loss line as adverse prior year development.

(d) Discontinued Asbestos and Run-Off Environmental Related Claims

The Company's reserving process includes a continuing evaluation of the potential impact on unpaid liabilities from exposure to discontinued asbestos and run-off environmental related claims, including related loss adjustment expenses. Liabilities are established to cover both known and incurred but not reported claims. The Company's reserving and exposures to environmental liability business currently written within the Casualty underwriting division are not included in this note, which only relates to specific discontinued and/or run-off coverages that were not originally written specifically to cover environmental hazards.

The Company's exposure to discontinued asbestos and run-off environmental related claims arises from the following four sources:


(1)	Reinsurance contracts written, both on a proportional and excess basis, after 1972. The Company discontinued writing contracts with these exposures in 1985. Business written was across many different policies, each with a relatively small contract limit. The Company's reported asbestos claims relate to both traditional products and premises and operations coverage.


(2)	Winterthur – business of Winterthur purchased by the Company from AXA Insurance (formerly Winterthur Swiss Insurance Company) in 2001. Pursuant to the Sale and Purchase Agreement and related agreements, AXA Insurance reimburses the Company for all asbestos losses.


(3)	During 2006, the Company acquired $40.2 million in losses through a loss portfolio transfer contract of which $18.3 million in losses related to asbestos and environmental claims. Given the terms of the policy, the combined aggregate limit on the total acquired reserves is $60.0 million, not including coverage for claims handling costs over a defined period.

(4)

Catlin Acquisition - aviation insurance contracts written by Catlin in the Lloyd's market where the specific asbestos exclusion language was not implemented until 2003. Exposures only extend back to 1993 as Equitas was established to take on the Lloyd's market exposure for 1992 and prior. Exposure is due to asbestos-containing products in use by the aviation industry leading to claims against aviation manufacturers for asbestosis, mesothelioma and lung cancer.

A reconciliation of the opening and closing unpaid losses and loss expenses related to discontinued asbestos and run-off environmental exposure claims for the years indicated is as follows:



Year ended December 31, (U.S. dollars in thousands)	2017			2016			2015
Net unpaid losses and loss expenses at beginning of year	$	92,834		$	93,704		$	81,416
Net incurred losses and loss expenses	(175		)	9,042			15,663
Less net paid losses and loss expenses	5,178			9,912			9,087
Net increase (decrease) in unpaid losses and loss expenses	$	(5,353	)	$	(870	)	$	6,576
Acquired reserves	—			—			5,712
Net unpaid losses and loss expenses at end of year	87,481			92,834			93,704
Unpaid losses and loss expenses recoverable at end of year	83,305			83,430			93,688
Gross unpaid losses and loss expenses at end of year	$	170,786		$	176,264		$	187,392

Reserves for incurred but not reported losses, net of reinsurance, included in the above table were $51.3 million, $60.3 million and $65.1 million at December 31, 2017, 2016 and 2015, respectively. Unpaid losses recoverable are net of potential uncollectible amounts.

At December 31, 2017, the Company had 2,176 open claim files for potential discontinued asbestos claims exposures and 435 open claim files for potential run-off environmental claims exposures. Approximately 37%, 34% and 32% of the open claim files are due to precautionary claim notices in 2017, 2016 and 2015, respectively. Precautionary claim notices are submitted by the ceding companies in order to preserve their right to receive coverage under the reinsurance contract. Such notices do not contain an incurred loss amount to the Company. The increase in total open claim files during 2015 was largely due to the Catlin Acquisition, as noted above.

The development of the number of open claim files for potential discontinued asbestos and run-off environmental claims, including precautionary claims, is as follows:



	Asbestos Claims		Environmental Claims
Total number of claims outstanding at December 31, 2014	1,399		459
New claims reported in 2015	272		67
Claims resolved in 2015	(246	)	(96	)
Reserves acquired in 2015	1,166		—
Total number of claims outstanding at December 31, 2015	2,591		430
New claims reported in 2016	579		69
Claims resolved in 2016	(753	)	(41	)
Reserves acquired in 2016	—		—
Total number of claims outstanding at December 31, 2016	2,417		458
New claims reported in 2017	435		24
Claims resolved in 2017	(676	)	(47	)
Total number of claims outstanding at December 31, 2017	2,176		435

The Company's reserving process includes an ongoing evaluation of the potential impact on unpaid liabilities from exposure to discontinued asbestos and run-off environmental claims, including related loss adjustment expenses. Liabilities are established to cover both known and IBNR claims.

The estimation of loss and loss expense liabilities for discontinued asbestos and run-off environmental exposures is subject to much greater uncertainty than is normally associated with the establishment of liabilities for certain other exposures due to several factors, including: (i) uncertain legal interpretations and application of insurance and reinsurance coverage and liability; (ii) the lack of reliable available historical claims data as an indicator of future claims development; (iii) an uncertain political climate which may impact, among other areas, the nature and amount of costs for remediating waste sites; and (iv) the potential of insurers and reinsurers to reach agreements in order to avoid further significant legal costs. Due to the potential significance of these uncertainties, the Company believes that no meaningful range of loss and loss expense liabilities beyond recorded reserves can be established. As the Company's net unpaid loss and loss expense reserves related to discontinued asbestos and run-off environmental exposures are less than 1% of the total net reserves at December 31, 2017 and 2016, further adverse development is not expected to be material to the Company's overall net loss reserves. The Company believes it has made reasonable provisions for its discontinued asbestos and run-off environmental exposures and is unaware of any specific issues that would significantly affect its estimate of loss and loss expenses.