Fluctuations from year to year in the level of catastrophe losses impact a property and casualty insurance company’s losscompany's claims and lossclaim adjustment expenses incurred and paid. For comparison purposes, the following table provides amounts for the Company excluding catastrophe losses.

Property and casualtyCasualty unpaid claims and claim expenses (“loss reserves”)(loss reserves) represent management’smanagement's estimate of ultimate unpaid costs of losses and settlement expenses for claims that have been reported and claims that have been incurred but not yet reported. The Company calculates and records a single best estimate of the reserve as of each balance sheetreporting date in conformity with generally accepted actuarial standards. For additional information regarding the process used to estimate propertyProperty and casualtyCasualty reserves and the risk factors involved, as well as a summary reconciliation of the beginning and ending propertyProperty and casualtyCasualty insurance claims and claim expense reserves and reserve development recorded in each of the three years ended December 31, 2014,2017, see “NotesNotes to Consolidated Financial Statements --— Note 4 --5 — Property and Casualty Unpaid Claims and Claim Expenses”, “Management’sExpenses, Management's Discussion and Analysis of Financial Condition and Results of Operations --— Critical Accounting Policies --— Liabilities for Property and Casualty Claims and Claim Expenses”Expenses and “Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations --— Results of Operations for the Three Years Ended December 31, 2014 --2017 — Benefits, Claims and Settlement Expenses”.

Expenses.

All of the Company's reserves for propertyProperty and casualtyCasualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on reserves. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under homeownersproperty insurance policies for environmentally related items such as mold.

The claim reserve development table below illustrates the change over time in the net reserves established for property and casualty insurance claims and claim expenses at the end of various calendar years. The first section shows the reserves as originally reported at the end of the stated year. The second section, reading down, shows the cumulative amounts of claims for which settlements have been made in cash as of the end of successive years with respect to that reserve liability. The third section, reading down, shows retroactive reestimates of the original recorded reserve as of the end of each successive year, which is the result of the Company learning additional facts that pertain to the unsettled claims. The fourth section compares the latest reestimated reserve to the reserve originally established, and indicates whether or not the original reserve was adequate or inadequate to cover the estimated costs of unsettled claims. The table also presents the gross reestimated liability as of the end of the latest reestimation period, with separate disclosure of the related reestimated reinsurance recoverable. The claim reserve development table is cumulative and, therefore, ending balances should not be added since the amount at the end of each calendar year includes activity for both the current and prior years.

In evaluating the information in the table below, it should be noted that each amount includes the effects of all changes in amounts for prior periods. For example, if a claim was first reserved in 2004 at $100 thousand and then determined in 2013 to be $150 thousand, the $50 thousand deficiency (actual claim minus original estimate) would be included in the cumulative deficiency in each of the years 2004 - 2012 shown below. This table presents development data by calendar year and does not relate the data to the year in which the accident actually occurred. Conditions and trends that have affected the development of these reserves in the past will not necessarily recur in the future. It may not be appropriate to use this cumulative history in the projection of future performance.

Property and Casualty

Claims and Claim Expense Reserve Development

(Dollars in millions)

		December 31,
		2004				2005				2006				2007				2008				2009				2010				2011				2012				2013				2014
Gross reserves for property and casualty claims and claim expenses		$	335.0			$	342.7			$	317.8			$	306.2			$	297.8			$	301.0			$	301.6			$	281.1			$	274.5			$	275.8			$	311.1
Deduct:  Reinsurance recoverables			25.7				31.6				22.4				15.9				14.8				15.8				12.2				11.5				13.7				14.1				43.7
Net Reserves for property and casualty claims and claim expenses (1)			309.3				311.1				295.4				290.3				283.0				285.2				289.4				269.6				260.8				261.7				267.4
Paid cumulative as of:
One year later			143.9				138.3				129.8				134.1				139.4				132.8				147.5				126.9				118.9				120.2
Two years later			202.5				196.5				184.1				184.2				187.3				186.5				196.8				169.2				160.3
Three years later			236.6				225.0				209.5				208.0				213.0				210.4				217.1				187.8
Four years later			252.7				239.1				223.5				220.0				225.2				220.5				225.9
Five years later			259.7				248.2				231.0				226.5				228.8				225.3
Six years later			263.3				253.0				235.5				229.2				230.5
Seven years later			266.7				255.9				237.1				230.3
Eight years later			268.4				256.9				237.1
Nine years later			268.5				256.5
Ten years later			267.9
Net Reserves reestimated as of (1):
End of year			309.3				311.1				295.4				290.3				283.0				285.2				289.4				269.6				260.8				261.7				267.4
One year later			296.2				291.8				275.4				272.2				271.3				264.7				279.1				252.4				242.8				244.7
Two years later			282.7				279.7				262.1				263.0				255.7				258.6				269.9				233.5				224.1
Three years later			278.2				270.2				255.3				254.0				254.5				255.6				251.6				220.3
Four years later			272.8				256.3				241.6				239.0				245.3				240.1				244.9
Five years later			268.4				257.3				242.9				239.8				239.9				235.8
Six years later			268.3				259.6				243.0				237.1				236.3
Seven years later			269.8				259.7				241.4				234.3
Eight years later			269.4				258.8				239.4
Nine years later			268.4				257.2
Ten years later			268.5
Net Reserve redundancy (deficiency) – initial net reserves in excess of (less than) reestimated reserves:
Amount (2)		$	40.8			$	53.9			$	56.0			$	56.0			$	46.7			$	49.4			$	44.5			$	49.3			$	36.7			$	17.0
Percent			13.2	%			17.3	%			19.0	%			19.3	%			16.5	%			17.3	%			15.4	%			18.3	%			14.1	%			6.5	%
Gross reestimated liability - latest		$	356.7			$	360.8			$	310.9			$	297.6			$	301.4			$	300.3			$	303.1			$	266.6			$	270.1			$	289.2
Deduct:
Reestimated reinsurance recoverables - latest			88.2				103.6				71.5				63.3				65.1				64.5				58.2				46.3				46.0				44.5
Net Reserves reestimated - latest (1)		$	268.5			$	257.2			$	239.4			$	234.3			$	236.3			$	235.8			$	244.9			$	220.3			$	224.1			$	244.7
Gross cumulative excess (deficiency)		$	(21.7	)		$	(18.1	)		$	6.9			$	8.6			$	(3.6	)		$	0.7			$	(1.5	)		$	14.5			$	4.4			$	(13.4	)

	(1)	Reserves net of anticipated reinsurance recoverables (“Net Reserves”).  Net Reserves is a measure used by the Company’s management to evaluate the overall adequacy of the property and casualty loss reserves and management believes it provides an alternative view of the Company’s anticipated liabilities after reflecting expected recoveries from its reinsurers.  This is considered a non-GAAP financial measure under applicable SEC rules because it is not displayed as a separate item in the Consolidated Balance Sheets.  For balance sheet reporting, GAAP does not permit the Company to offset expected reinsurance recoveries against liabilities, yet management believes it is useful to investors to take these expected recoveries into account.  These adjustments only affect the classification of these items in the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows and there is no impact on the Company’s benefits, claims and settlement expenses incurred as reported in the Consolidated Statements of Operations.
	(2)	For discussion of the reserve development, see “Notes to Consolidated Financial Statements -- Note 4 -- Property and Casualty Unpaid Claims and Claim Expenses” listed on page F-1 of this report.

Property and Casualty Reinsurance