v3.25.2
Reserves for Losses and Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 2024
Insurance [Abstract]  
Reserves for Losses and Loss Adjustment Expenses Reserves for Losses and Loss Adjustment Expenses
The Company presents its loss development on a consolidated basis; however, it evaluates net ultimate loss and LAE under three sub-categories: multi-line solutions, short-tail/monoline specialty lines and exited lines. The Company determined that these disaggregated groupings have more homogeneous risk characteristics with similar development patterns and are generally subject to similar trends.
Short-tail/Monoline Specialty Lines
Short-tail/monoline specialty lines includes the Company’s global property & agriculture, accident & health, surety, and professional lines underwriting divisions. These are market niches for which the Company serves with monoline solutions which generally have shorter durations for losses to fully develop. Losses for these lines are generally reported within a short period of time from the date of loss, and in most instances, claims are settled and paid within a relatively short timeframe. Short tail/monoline specialty can be impacted by larger losses which can be more complex due to factors such as difficulty determining actual damages, legal and regulatory impediments potentially extending the period of time it takes to settle and pay claims.
Multi-line Solutions
Multi-line solutions includes the Company’s industry solutions, programs, captives and transactional E&S underwriting divisions. These are market niches for which the Company provides multiple products most frequently as an integrated solution. The multi-line solution subcategory is made up predominantly of occurrence liability including general liability, excess liability, and commercial auto. Multi-line solutions have a longer duration for losses to fully develop compared to short-tail/monoline specialty lines. Due to the unique claim characteristics of each product and the longer-tail nature of the multi-line solutions, this introduces more uncertainty as over time the claims can be impacted by changes in regulation, inflation and other unforeseen factors.
Exited lines
Exited lines includes all underwriting units that the Company placed in run-off and are presented separately from on-going lines of business.
In 2024, the Company transitioned from evaluating reserves on a policy year basis to an accident year basis which results in earlier recognition of underlying claim trends, better alignment of exposure to risks, and adherence to commonly used industry best practices. In prior years, the Company’s methodology allocated IBNR from its policy year analysis to accident year. As a result of transitioning to accident year, IBNR within short-tail/monoline specialty lines, multi-line solutions, and exited lines was reallocated for the years ended December 31, 2023, 2022, 2021 and 2020, and certain amounts have been conformed to the current year presentation.
The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses (“LAE”) as reported in the consolidated balance sheets as of and for the years ended December 31, 2024, 2023 and 2022:
($ in thousands)202420232022
Reserves for losses and LAE, beginning of period$1,314,501 $1,141,757 $979,549 
Less: reinsurance recoverable on unpaid claims, beginning of period(455,484)(435,986)(381,338)
Reserves for losses and LAE, beginning of period, net of reinsurance859,017 705,771 598,211 
Incurred, net of reinsurance, related to:
Current period657,783 505,894 374,475 
Prior years25,728 10,770 33,849 
Total incurred, net of reinsurance683,511 516,664 408,324 
Paid, net of reinsurance, related to:
Current period136,731 109,937 105,928 
Prior years294,260 253,481 194,836 
Total paid430,991 363,418 300,764 
Net reserves for losses and LAE, end of period1,111,537 859,017 705,771 
Plus: reinsurance recoverable on unpaid claims, end of period670,846 455,484 435,986 
Reserves for losses and LAE, end of period$1,782,383 $1,314,501 $1,141,757 
For the year ended December 31, 2024, the Company recognized adverse development related to prior years’ loss and loss expense reserves of $25.7 million, primarily related to losses previously subject to the LPT from accident years 2018 and prior, with $10.1 million and $15.2 million in multi-line solutions and exited lines, respectively.
For the year ended December 31, 2023, the Company recognized adverse development related to prior years’ loss and loss expense reserves of $10.8 million. Adverse development of $11.7 million in multi-line solutions was driven by greater than expected severity in auto, general, and excess liability lines of business primarily from accident years 2020 to 2022. The adverse development was partially offset by favorable development in short-tail/monoline specialty lines. The favorable development was in the property line of business primarily from accident years 2021 and 2022.
During the year ended December 31, 2022, the Company’s net incurred losses for accident years 2021 and prior developed adversely by $33.8 million. Adverse development of $20.2 million in exited lines was due to (i) losses previously subject to the LPT from accident years 2018 and prior, and (ii) increased frequency and severity in general and professional liability lines from accident years 2019 through 2021. Adverse development of $13.0 million in multi-line solutions was driven by an increase in the frequency and severity of claims in commercial auto and general liability from accident years 2018 through 2021.
Short Duration Contract Disclosures
Losses and LAE reserves represent the Company’s best estimate of the ultimate net cost of all reported and unreported losses that are unpaid as of the balance sheet dates. The Company’s estimated reserves for losses and LAE include the accumulation of estimates for claims reported and unpaid prior to the balance sheet dates, estimates (based on projections of relevant historical data) of increases in claims costs for claims already reported, of claims incurred but not reported, and estimates of expenses for investigating and adjusting all incurred and unpaid claims.
In determining the cumulative number of reported claims, the Company measures claim counts by incident. The claim counts include all claims reported, even if the Company does not establish a liability for the claim (i.e. reserve for loss and loss adjustment expenses).
Short-tail/Monoline Specialty Lines
 ($ in thousands except number of claims)
Incurred Losses and Allocated Loss Adjustment Expense (“ALAE”), Net of Reinsurance
As of December 31, 2024
Years Ended December 31,
Reported Claims
Accident Year
2020*
2021*
2022*
2023*
2024IBNR
2020$56,141 $55,324 $55,420 $55,305 $55,305 $1,147 1,311
202192,780 93,429 92,143 92,134 6,536 1,627
2022108,299 105,394 104,095 15,316 2,383
2023190,565 191,865 68,001 4,880
2024280,147 161,230 4,502
Total$723,546 
Cumulative net paid loss and ALAE from the table below(359,673)
Net reserves for loss and ALAE before 20203,353 
Total net reserves for loss and ALAE$367,226 

*Supplementary information and unaudited
($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
Years Ended December 31,
Accident Year
2020*
2021*
2022*
2023*
2024
2020$14,002 $35,479 $40,000 $43,737 $49,688 
202118,447 56,803 67,912 78,439 
202227,773 64,594 77,150 
202333,795 100,705 
202453,691 
Total$359,673 
*Supplementary information and unaudited
Multi-line Solutions
 ($ in thousands except number of claims)
Incurred Losses and ALAE, Net of Reinsurance ($ in thousands)
As of December 31, 2024
Accident
Year		Years Ended December 31,Reported Claims
2015*
2016*
2017*
2018*
2019*
2020*
2021*
2022*
2023*
2024IBNR
2015$103,191 $114,266 $117,024 $117,024 $119,216 $114,863 $115,863 $116,413 $116,413 $117,955 $(834)5,386
201663,223 62,843 62,843 62,643 84,579 84,579 84,829 84,829 85,434 1,276 4,739
201765,332 65,332 64,260 78,166 78,166 78,766 78,766 80,493 2,105 5,588
201874,476 74,476 69,319 71,719 73,019 73,019 75,686 4,856 5,104
2019107,432 109,226 112,378 115,530 116,230 116,206 3,918 6,119
2020113,030 124,076 128,111 132,495 132,125 4,716 5,539
2021156,067 158,891 160,331 160,546 16,119 6,702
2022236,909 242,097 242,358 33,477 8,562
2023306,511 306,511 132,772 8,180
2024353,933 246,281 6,557
Total$1,671,247 
Cumulative net paid loss and ALAE from the table below(1,038,650)
Net reserves for loss and ALAE before 2015(1,532)
Total net reserves for loss and ALAE$631,065 
*Supplementary information and unaudited
 ($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
Years Ended December 31,
Accident
Year
2015*
2016*
2017*
2018*
2019*
2020*
2021*
2022*
2023*
2024
2015$44,152 $72,137 $88,833 $99,401 $108,291 $107,214 $109,622 $109,706 $113,703 $115,116 
201623,239 42,528 53,352 58,895 69,691 72,544 75,855 77,160 77,760 
201723,770 41,945 53,093 61,354 67,926 71,109 73,770 75,714 
201826,201 42,568 47,226 58,655 65,635 69,893 70,128 
201933,019 50,933 71,053 87,816 99,451 106,765 
202029,499 60,680 82,236 105,283 121,097 
202137,118 73,293 102,772 125,749 
202250,148 114,794 165,854 
202363,079 122,186 
202458,281 
Total$1,038,650 
*Supplementary information and unaudited
Exited Lines — all lines in runoff
($ in thousands except number of claims)
Incurred Losses and ALAE, Net of Reinsurance ($ in thousands)
As of December 31, 2024
Years Ended December 31,Reported Claims
Accident
Year
2015*
2016*
2017*
2018*
2019*
2020*
2021*
2022*
2023*
2024IBNR
2015$61,810 $65,063 $68,008 $70,803 $75,187 $79,853 $79,853 $80,603 $80,603 $82,092 $1,145 4,581
201693,019 92,996 91,372 93,577 97,301 98,301 100,651 100,651 102,801 959 4,893
201775,159 79,581 81,785 65,735 68,346 68,646 68,646 70,885 1,598 4,339
201874,357 68,990 76,506 79,006 84,165 84,165 92,082 5,586 4,910
201987,115 73,635 77,770 79,414 79,572 79,823 5,786 5,632
2020132,248 136,469 137,835 137,907 137,671 11,424 4,828
202183,322 91,188 91,323 92,095 10,923 2,398
202212,717 12,240 11,800 902 234
2023— — — 1
2024— — —
Total$669,249 
Cumulative net paid loss and ALAE from the table below(597,904)
Net reserves for loss and ALAE before 201515,344 
Total net reserves for loss and ALAE$86,689 
*Supplementary information and unaudited
 ($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
Years Ended December 31,
Accident
Year
2015*
2016*
2017*
2018*
2019*
2020*
2021*
2022*
2023*
2024
2015$9,026 $41,653 $55,610 $65,269 $73,100 $78,249 $80,077 $80,923 $82,188 $83,290 
201636,592 57,638 70,253 78,070 81,181 87,482 91,556 95,114 97,462 
201734,176 52,103 51,985 50,545 57,457 62,924 66,498 68,480 
201825,553 60,149 39,870 54,339 67,001 74,604 79,860 
201928,636 28,954 30,948 45,696 57,341 65,847 
2020102,725 98,202 102,132 114,543 120,831 
202141,540 57,820 66,012 72,923 
20222,155 4,077 9,211 
2023— — 
2024— 
Total$597,904 
*Supplementary information and unaudited
The table below presents the reconciliation of the net incurred and paid loss development tables to the balance sheet reserves for losses and loss adjustment expenses at December 31, 2024 and 2023:
($ in thousands)20242023
Net reserves for losses and ALAE:
Short-tail/Monoline Specialty Lines$367,226 $235,191 
Multi-line Solutions631,065 485,099 
Exited Lines86,689 112,607 
Reserves for losses and ALAE, net of reinsurance1,084,980 832,897 
Reinsurance recoverable on unpaid claims:
Short-tail/Monoline Specialty Lines275,204 199,044 
Multi-line Solutions380,344 252,146 
Exited Lines15,298 4,294 
Total reinsurance recoverable on unpaid claims670,846 455,484 
Unallocated LAE26,557 26,120 
Reserves for losses and LAE at end of year$1,782,383 $1,314,501 
The following table sets forth the historical average annual payout of incurred losses and allocated loss adjustment expenses (claims duration) for short-duration contracts, based on the disaggregated information in the paid loss development tables, net of reinsurance:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years
1*2*3*4*5*6*7*8*9*10*
Short-Tail/Monoline Specialty Lines21.8 %37.7 %10.8 %9.1 %10.8 %N/AN/AN/AN/AN/A
Multi-line Solutions26.0 %22.0 %15.0 %12.4 %9.9 %3.7 %2.4 %1.3 %2.0 %1.2 %
Exited Lines29.6 %17.1 %8.1 %9.7 %9.2 %7.8 %4.2 %2.4 %1.9 %1.3 %
*Supplementary information and unaudited