Property Casualty Loss and Loss Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Consolidated Property Casualty Loss And Loss Expense Reserves

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

(Dollars in millions)	Years ended December 31,
	2020		2019		2018
Gross loss and loss expense reserves, January 1	$	6,088	$	5,646	$	5,219
Less reinsurance recoverable	342		238		187
Net loss and loss expense reserves, January 1	5,746		5,408		5,032
Net loss and loss expense reserves related to acquisition of Cincinnati Global at February 28, 2019	—		246		—
Net incurred loss and loss expenses related to:
Current accident year	3,968		3,600		3,390
Prior accident years	(131)		(248)		(167)
Total incurred	3,837		3,352		3,223
Net paid loss and loss expenses related to:
Current accident year	1,493		1,462		1,391
Prior accident years	1,690		1,798		1,456
Total paid	3,183		3,260		2,847
Net loss and loss expense reserves, December 31	6,400		5,746		5,408
Plus reinsurance recoverable	277		342		238
Gross loss and loss expense reserves, December 31	$	6,677	$	6,088	$	5,646

Reconciliation of Property casualty Incurred Losses and ALAE and Paid Losses and ALAE Development Information

The following table provides a reconciliation of the property casualty incurred losses and allocated loss adjustment expenses (ALAE) development and paid losses and ALAE development information at December 31, 2020.

(Dollars in millions)	Cumulative incurred losses and ALAE as reported within the triangles, net of reinsurance		Cumulative paid losses and ALAE as reported within the triangles, net of reinsurance		Liabilities for loss and ALAE for accident years not presented in the triangles, net of reinsurance		Total liabilities for loss and ALAE, net of reinsurance		Reinsurance recoverable on unpaid losses		Total liabilities for gross loss and loss expense reserves
Commercial casualty	$	5,179	$	3,012	$	91	$	2,258	$	24	$	2,282
Workers' compensation	1,990		1,357		308		941		61		1,002
Commercial auto	2,235		1,581		26		680		5		685
Commercial property	3,158		2,725		15		448		66		514
Personal auto	1,860		1,610		10		260		32		292
Homeowner	1,996		1,781		4		219		18		237
Excess and surplus	836		430		1		407		16		423
Other lines											959
Total liabilities for loss and ALAE reserves											6,394
Unallocated loss adjustment expense reserves											283
Gross loss and loss expense reserves											$	6,677

Schedule of Incurred and Paid Losses and ALAE Development by Accident Year

The following table shows the commercial casualty incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)																					As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,																						Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
2011	$	466	$	404	$	377	$	377	$	375	$	380	$	366	$	365	$	368	$	361		$	—	19
2012			466		414		417		394		394		404		399		397		397			11		18
2013					448		443		431		416		413		407		391		386			22		20
2014							503		496		479		476		479		465		469			27		21
2015									533		526		529		516		508		502			54		21
2016											563		574		557		555		554			89		21
2017													610		597		577		571			124		21
2018															650		641		622			181		22
2019																	672		643			293		19
2020																			674			472		11
Total																			$	5,179
Cumulative paid losses and ALAE, net of reinsurance
2011	$	27	$	93	$	149	$	227	$	266	$	298	$	315	$	325	$	337	$	342
2012			27		88		170		232		288		330		346		364		374
2013					35		90		159		232		286		312		337		348
2014							34		97		172		287		338		390		409
2015									38		108		200		287		362		404
2016											46		126		228		331		395
2017													48		122		234		320
2018															44		148		253
2019																	39		134
2020																			33
Total																			3,012
All outstanding liabilities before 2011, net of reinsurance																			91
Liabilities for loss and ALAE, net of reinsurance																			$	2,258

The following table shows the workers’ compensation incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)																					As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,																						Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
2011	$	284	$	251	$	246	$	242	$	239	$	236	$	231	$	229	$	228	$	228		$	17	24
2012			265		245		234		220		213		211		209		208		207			19		21
2013					264		246		221		212		208		205		202		201			12		20
2014							261		233		214		203		201		198		197			13		19
2015									246		220		208		195		179		173			26		17
2016											230		218		206		188		183			27		16
2017													218		208		190		183			46		15
2018															222		207		199			52		15
2019																	224		215			65		14
2020																			204			100		10
Total																			$	1,990
Cumulative paid losses and ALAE, net of reinsurance
2011	$	65	$	131	$	161	$	177	$	186	$	190	$	192	$	195	$	197	$	198
2012			62		121		147		162		171		175		178		180		182
2013					61		119		144		157		164		168		170		174
2014							56		110		134		148		157		162		165
2015									47		93		115		129		134		137
2016											46		97		119		131		141
2017													45		88		106		114
2018															48		95		115
2019																	49		94
2020																			37
Total																			1,357
All outstanding liabilities before 2011, net of reinsurance																			308
Liabilities for loss and ALAE, net of reinsurance																			$	941

The following table shows the commercial auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)											As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,												Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2016		2017		2018		2019		2020
2016	$	417	$	430	$	450	$	463	$	474		$	5	53
2017			451		441		443		444			13		51
2018					453		442		442			36		49
2019							452		451			73		46
2020									424			164		33
Total									$	2,235
Cumulative paid losses and ALAE, net of reinsurance
2016	$	184	$	273	$	350	$	408	$	441
2017			187		266		334		381
2018					184		266		337
2019							183		268
2020									154
Total									1,581
All outstanding liabilities before 2016, net of reinsurance									26
Liabilities for loss and ALAE, net of reinsurance									$	680

The following table shows the commercial property incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)											As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,												Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2016		2017		2018		2019		2020
2016	$	590	$	551	$	541	$	545	$	542		$	2	17
2017			587		560		556		565			3		18
2018					630		603		590			7		18
2019							621		606			6		17
2020									855			141		22
Total									$	3,158
Cumulative paid losses and ALAE, net of reinsurance
2016	$	358	$	504	$	528	$	539	$	539
2017			395		522		547		560
2018					386		559		576
2019							413		561
2020									489
Total									2,725
All outstanding liabilities before 2016, net of reinsurance									15
Liabilities for loss and ALAE, net of reinsurance									$	448

The following table shows the personal auto incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)											As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,												Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2016		2017		2018		2019		2020
2016	$	383	$	384	$	386	$	384	$	384		$	1	110
2017			412		394		391		393			1		109
2018					424		398		395			1		111
2019							399		383			14		102
2020									305			62		67
Total									$	1,860
Cumulative paid losses and ALAE, net of reinsurance
2016	$	243	$	316	$	351	$	370	$	378
2017			256		324		358		374
2018					262		327		358
2019							250		314
2020									186
Total									1,610
All outstanding liabilities before 2016, net of reinsurance									10
Liabilities for loss and ALAE, net of reinsurance									$	260

The following table shows the homeowner incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)											As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,												Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2016		2017		2018		2019		2020
2016	$	315	$	304	$	303	$	302	$	304		$	—	23
2017			356		383		385		387			—		26
2018					370		386		387			5		24
2019							432		421			10		22
2020									497			54		21
Total									$	1,996
Cumulative paid losses and ALAE, net of reinsurance
2016	$	208	$	283	$	295	$	299	$	302
2017			277		356		378		384
2018					268		368		378
2019							303		391
2020									326
Total									1,781
All outstanding liabilities before 2016, net of reinsurance									4
Liabilities for loss and ALAE, net of reinsurance									$	219

The following table shows the excess and surplus lines incurred and paid losses and ALAE development by accident year. The table also shows the IBNR reserves plus expected development on reported losses and claim frequency:

(Dollars in millions, reported claims in thousands)																			As of December 31, 2020
Incurred losses and ALAE, net of reinsurance for the years ended December 31,																						Total of incurred but not reported liabilities plus expected development on reported losses		Cumulative number of reported claims
Accident	Unaudited
Year	2011		2012		2013		2014		2015		2016		2017		2018		2019			2020
2011	$	48	$	47	$	44	$	38	$	36	$	35	$	35	$	34	$	34		$	34	$	—	1
2012			67		56		49		40		37		36		35		36			35		—		1
2013					74		64		54		45		42		41		41			41		2		2
2014							95		82		75		64		60		59			59		5		2
2015									96		81		73		67		65			66		6		2
2016											93		87		84		82			90		13		3
2017													104		95		95			94		15		3
2018															116		109			110		29		3
2019																	137			135		50		3
2020																				172		$	105	2
Total																				$	836
Cumulative paid losses and ALAE, net of reinsurance
2011	$	8	$	14	$	23	$	27	$	30	$	32	$	34	$	33	$	33		$	33
2012			9		15		19		25		29		31		32		33			34
2013					7		12		20		27		32		34		37			39
2014							9		17		27		37		43		48			51
2015									8		19		29		41		51			54
2016											10		21		39		51			62
2017													11		23		41			57
2018															11		26			50
2019																	13			34
2020																				16
Total																				430
All outstanding liabilities before 2011, net of reinsurance																				1
Liabilities for loss and ALAE, net of reinsurance																				$	407

Schedule of Average Annual Percentage Payout of Incurred Claims

The following table shows the average annual percentage payout of incurred losses for the commercial casualty line of business:

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5	6	7	8	9	10
Average annual percentage payout	7.3%	14.9%	17.9%	18.8%	12.7%	9.1%	4.8%	3.5%	3.0%	1.7%

The following table shows the average annual percentage payout of incurred losses for the workers’ compensation line of business:

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5	6	7	8	9	10
Average annual percentage payout	25.9%	26.3%	11.9%	6.7%	4.1%	2.0%	1.4%	1.2%	1.1%	0.5%

The following table shows the average annual percentage payout of incurred losses for the commercial auto line of business. Commercial auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses.

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5
Average annual percentage payout	39.9%	18.6%	15.8%	11.5%	7.0%

The following table shows the average annual percentage payout of incurred losses for the commercial property line of business:

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5
Average annual percentage payout	65.3%	25.8%	3.9%	2.1%	0.1%

The following table shows the average annual percentage payout of incurred losses for the personal auto line of business. Personal auto includes both physical damage and liability losses. A majority of the incurred losses paid after year 2 are the result of liability losses.

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5
Average annual percentage payout	64.2%	17.3%	8.6%	4.6%	2.0%

The following table shows the average annual percentage payout of incurred losses for the homeowner line of business:

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5
Average annual percentage payout	69.3%	23.0%	4.1%	1.4%	0.8%

The following table shows the average annual percentage payout of incurred losses for the excess and surplus lines insurance segment. Excess and surplus lines consist mostly of commercial casualty and commercial property coverages. A majority of the incurred losses paid after year 2 are the result of commercial casualty losses.

Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years	1	2	3	4	5	6	7	8	9	10
Average annual percentage payout	14.6%	14.4%	19.2%	15.4%	11.7%	6.9%	3.9%	2.2%	1.0%	0.2%