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Insurance
 3 Months Ended
Mar. 31, 2020
Insurance [Abstract]  
Insurance Insurance

Property and Casualty Insurance Reserves The following table provides an analysis of changes in the liability for losses and loss adjustment expenses during the first three months of 2020 and 2019 (in millions):
 
Three months ended March 31,
 
2020
 
2019
Balance at beginning of year
$
10,232

 
$
9,741

Less reinsurance recoverables, net of allowance
3,024

 
2,942

Net liability at beginning of year
7,208

 
6,799

Provision for losses and LAE occurring in the current period
749

 
737

Net increase (decrease) in the provision for claims of prior years
(42
)
 
(45
)
Total losses and LAE incurred (*)
707

 
692

Payments for losses and LAE of:
 
 
 
Current year
(75
)
 
(89
)
Prior years
(676
)
 
(615
)
Total payments
(751
)
 
(704
)
Foreign currency translation and other
(22
)
 
1

Net liability at end of period
7,142

 
6,788

Add back reinsurance recoverables, net of allowance
2,964

 
2,835

Gross unpaid losses and LAE included in the balance sheet at end of period
$
10,106

 
$
9,623



(*)
Includes $40 million in losses and LAE incurred in the Neon exited lines in the first three months of 2020.

The net decrease in the provision for claims of prior years during the first three months of 2020 reflects (i) lower than expected losses in the crop business and lower than anticipated claim frequency and severity at National Interstate
(within the Property and transportation sub-segment) and (ii) lower than anticipated claim severity in the workers’ compensation businesses and lower than anticipated claim frequency and severity in the executive liability business (within the Specialty casualty sub-segment). This favorable development was partially offset by (i) higher than expected claim severity in the property and inland marine business (within the Property and transportation sub-segment), (ii) higher than expected claim frequency and severity in the excess and surplus lines businesses and higher than expected claim severity in the public sector business (within the Specialty casualty sub-segment), and (iii) higher than expected losses at Neon.

The net decrease in the provision for claims of prior years during the first three months of 2019 reflects (i) lower than expected losses in the crop business and lower than expected claim frequency at National Interstate (all within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation business (within the Specialty casualty sub-segment), and (iii) lower than expected claim frequency and severity in the surety business and lower than anticipated claim severity in the fidelity business (all within the Specialty financial sub-segment). This favorable development was partially offset higher than expected claim severity in the in the targeted markets businesses and higher than expected losses at Neon (all within the Specialty casualty sub-segment).

Recoverables from Reinsurers and Premiums Receivable See Note A — “Accounting Policies — Credit Losses on Financial Instruments,” for a discussion of new guidance effective January 1, 2020, which impacts the accounting for expected credit losses of recoverables from reinsurers and premiums receivable. Progressions of the 2020 allowance for expected credit losses are shown below (in millions):
 
Recoverables from Reinsurers
 
Premiums Receivable
Balance at January 1
$
18

 
$
13

Impact of adoption of new accounting policy
(6
)
 
(3
)
Provision (credit) for expected credit losses
1

 
(1
)
Write-offs charged against the allowance
—

 
—

Balance at March 31
$
13

 
$
9