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 September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Gross loss and loss expense reserves, beginning of period	$	4,219		$	4,337		$	4,169		$	4,280
Less reinsurance receivable	333			332			356			375
Net loss and loss expense reserves, beginning of period	3,886			4,005			3,813			3,905
Net incurred loss and loss expenses related to:
Current accident year	631			611			1,840			1,991
Prior accident years	(38		)	(86		)	(140		)	(287		)
Total incurred	593			525			1,700			1,704
Net paid loss and loss expenses related to:
Current accident year	329			364			699			778
Prior accident years	233			229			897			894
Total paid	562			593			1,596			1,672
Net loss and loss expense reserves, end of period	3,917			3,937			3,917			3,937
Plus reinsurance receivable	321			343			321			343
Gross loss and loss expense reserves, end of period	$	4,238		$	4,280		$	4,238		$	4,280

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 $69 million at September 30, 2013, and $64 million at September 30, 2012, for certain life and health loss and loss expense reserves.

For the three months ended September 30, 2013, we experienced $38 million of favorable development on prior accident years, including $13 million of favorable development in commercial lines, $21 million of favorable development in personal lines and $4 million favorable development in excess and surplus lines. This included

$9 million from favorable development of catastrophe losses for the three months ended September 30, 2013, compared with $12 million of favorable development of catastrophe losses for the three months ended September 30, 2012.

For the nine months ended September 30, 2013, we experienced $140 million of favorable development on prior accident years, including $91 million of favorable development in commercial lines, $43 million of favorable development in personal lines and $6 million favorable development in excess and surplus lines. This included

$24 million from favorable development of catastrophe losses for the nine months ended September 30, 2013, compared with $39 million of favorable development of catastrophe losses for the nine months ended September 30, 2012.