Insurance

9 Months Ended

Sep. 30, 2022

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 nine months of 2022 and 2021 (in millions):


	Nine months ended September 30,
	2022		2021
Balance at beginning of year	$	11,074	$	10,392
Less reinsurance recoverables, net of allowance	3,419		3,117
Net liability at beginning of year	7,655		7,275
Provision for losses and LAE occurring in the current period	2,869		2,543


Net decrease in the provision for claims of prior years	(226)		(208)
Total losses and LAE incurred	2,643		2,335
Payments for losses and LAE of:
Current year	(667)		(589)
Prior years	(1,501)		(1,430)
Total payments	(2,168)		(2,019)
Foreign currency translation and other	1		—
Net liability at end of period	8,131		7,591
Add back reinsurance recoverables, net of allowance	3,936		3,400
Gross unpaid losses and LAE included in the balance sheet at end of period	$	12,067	$	10,991

The net decrease in the provision for claims of prior years during the first nine months of 2022 reflects (i) lower than anticipated losses in the crop business, lower than expected claim frequency in the trucking and ocean marine businesses and in the Singapore operations, lower than expected claim frequency and severity in the aviation business and lower than anticipated claim severity in the property and inland marine business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses, lower than expected claim frequency in the executive liability business and lower than anticipated claim frequency and severity in the excess and surplus business (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency in the surety, trade credit and financial institutions businesses (within the Specialty financial sub-segment). This favorable development was partially offset by higher than anticipated claim severity in the targeted markets and excess liability businesses (within the Specialty casualty sub-segment).

The net decrease in the provision for claims of prior years during the first nine months of 2021 reflects (i) lower than anticipated claim frequency and severity in the transportation businesses, lower than expected losses in the crop business, lower than expected claim severity in the property and inland marine business and lower than expected claim frequency in the aviation business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency in the surety and trade credit businesses and lower than expected claim frequency and severity in the financial institutions business (within the Specialty financial sub-segment). This favorable development was partially offset by (i) higher than expected claim frequency and severity in equine business (within the Property and transportation sub-segment) and (ii) higher than anticipated claim severity in the general liability and targeted markets businesses (within the Specialty casualty sub-segment).

Recoverables from Reinsurers and Premiums Receivable Progressions of the 2022 and 2021 allowance for expected credit losses on recoverables from reinsurers and premiums receivable related to continuing operations are shown below (in millions):


	Recoverables from Reinsurers				Premiums Receivable
	2022		2021		2022		2021
Balance at June 30	$	7	$	8	$	9	$	9
Provision (credit) for expected credit losses	1		—		(1)		1
Write-offs charged against the allowance	—		—		—		—
Balance at September 30	$	8	$	8	$	8	$	10

Balance at January 1	$	8	$	6	$	8	$	10
Provision (credit) for expected credit losses	—		2		—		—
Write-offs charged against the allowance	—		—		—		—
Balance at September 30	$	8	$	8	$	8	$	10