1. Reinsurance was underpriced in 1998.
2. Underpricing was associated with under reserving, so the balance sheet was too optimistic.
3. Terrorist Attacks, 2001.
4. A lot of hurricanes in 2004-2005 capped off by Katrina.
Once again, here is some data:
The 10 year cost of float has been $6.7 billion over the last 10 years. On the chart, I have this split out into losses from prior years (under reserving, under pricing), Terrorist attacks, and Hurricanes. I am assuming that one mega property catastrophe is likely, but the under pricing, under reserving, and terrorist attacks are unlikely to happen again.
This would put the normalized 'cost of float' at about 1%.
Over the course of the decade, I would be very surprised if the total return on float wasn't significantly higher then 4%. The excess returns are profit.
As far as what didn't happen (but could have happened) are significant recapitalization or dilution.
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