Company: AXS-PE
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001214816-25-000056
Chunk: 332

Company: AXIS CAPITAL HOLDINGS LTD
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 332
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 on prior accident year reserves indicates that current estimates are lower than previous estimates, while adverse development on prior accident year reserves indicates that current estimates are higher than previous estimates.

Although estimates of ultimate losses for shorter tail business are inherently more certain than for longer tail business, significant judgment is still required. For example, much of our excess insurance and excess of loss reinsurance business has high attachment points. Therefore, it is often difficult to estimate whether claims will exceed those attachment points. In addition, the inherent uncertainties relating to catastrophe events further add to the complexity of estimating potential exposure. Further, we use managing general agents ("MGAs") and other producers for certain business in the insurance segment, which can delay the reporting of loss information. We expect the majority of development for an accident year or underwriting year to be recognized in the subsequent one to three years.

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Factors that contribute additional uncertainty to estimates for longer tail business include, but are not limited to:

•potential volatility of actuarial estimates, the number of years of development it takes to produce a significant incurred loss as a percentage of ultimate losses;

•inherent uncertainties about loss trends, claims inflation (e.g., medical, judicial, social) and general economic conditions; and

•the possibility of future litigation, legislative or judicial change that may impact future loss experience relative to prior industry loss experience relied on in reserve estimation.

Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – Reserve for Losses and Loss Expenses – Prior Year Reserve Development' for a discussion of prior year reserve development by segment, line of business and accident year, and see further details specific to insurance and reinsurance credit and political risk business below.

Refer to 'Reserving for Credit and Political Risk Business' below for a discussion of specific loss reserving considerations related to insurance and reinsurance credit and political risk business below. 

Reserving for Credit and Political Risk Business

Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses – 'Net incurred and Paid Claims Development Tables by Accident Year – Insurance segment – Insurance Credit and Political Risk' and 'Reserve for Losses and Loss Expenses – 'Net incurred and Paid Claims Development Tables by Accident Year – Reinsurance segment – Reinsurance Credit and Surety' for details of this line of business and the associated key actuarial assumptions.

An important and distinguishing feature of many of these contracts is the contractual right, subsequent to payment of a claim