PROPERTY CASUALTY LOSS AND LOSS EXPENSES

This table summarizes activity for our consolidated property casualty loss and loss expense reserves:



(In millions)	Three months ended March 31,
	2013			2012
Gross loss and loss expense reserves, beginning of period	$	4,169		$	4,280
Less reinsurance receivable	356			375
Net loss and loss expense reserves, beginning of period	3,813			3,905
Net incurred loss and loss expenses related to:
Current accident year	534			655
Prior accident years	(10		)	(116		)
Total incurred	524			539
Net paid loss and loss expenses related to:
Current accident year	121			132
Prior accident years	392			375
Total paid	513			507
Net loss and loss expense reserves, end of period	3,824			3,937
Plus reinsurance receivable	349			352
Gross loss and loss expense reserves, end of period	$	4,173		$	4,289

We use actuarial methods, models and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial management that is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $67 million at March 31, 2013, and $58 million at March 31, 2012, for certain life and health loss and loss expense reserves.

For the three months ended March 31, 2013, we experienced $10 million of favorable development on prior accident years, including $12 million favorable development in commercial lines, $4 million adverse development in personal lines and

$2 million favorable development in excess and surplus lines. There was $7 million from favorable development of catastrophe losses for the three months ended March 31, 2013, compared with $22 million of favorable development of catastrophe losses that occurred for the three months ended March 31, 2012.