Property Casualty Loss and Loss Expenses

9 Months Ended

Sep. 30, 2023

Property Casualty Loss And Loss Expenses

Property Casualty Loss and Loss Expenses

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


(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Gross loss and loss expense reserves, beginning of period	$	8,807	$	7,603	$	8,336	$	7,229
Less reinsurance recoverable	424		287		405		327
Net loss and loss expense reserves, beginning of period	8,383		7,316		7,931		6,902





Net incurred loss and loss expenses related to:
Current accident year	1,314		1,391		4,053		3,687
Prior accident years	(53)		(43)		(213)		(143)
Total incurred	1,261		1,348		3,840		3,544
Net paid loss and loss expenses related to:
Current accident year	597		484		1,286		1,021
Prior accident years	461		464		1,899		1,709
Total paid	1,058		948		3,185		2,730
Net loss and loss expense reserves, end of period	8,586		7,716		8,586		7,716
Plus reinsurance recoverable	419		329		419		329
Gross loss and loss expense reserves, end of period	$	9,005	$	8,045	$	9,005	$	8,045

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, claims, underwriting, loss prevention and accounting management. This committee 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 $72 million and $68 million at September 30, 2023, and 2022, respectively, for certain life and health loss and loss expense reserves.

We experienced $53 million of favorable development on prior accident years, including $34 million of favorable development in commercial lines, $8 million of favorable development in personal lines and no net development in excess and surplus lines for the three months ended September 30, 2023. Within commercial lines, we recognized favorable reserve development of $20 million for the workers' compensation line and $11 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines.

We experienced $213 million of favorable development on prior accident years, including $125 million of favorable development in commercial lines, $54 million of favorable development in personal lines and $14 million of favorable development in excess and surplus lines for the nine months ended September 30, 2023. Within commercial lines, we recognized favorable reserve development of $46 million for the workers' compensation line and $36 million for both the commercial property and commercial casualty lines due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Within personal lines, we recognized favorable reserve development of $44 million for the homeowner line and $12 million for the personal auto line.

We experienced $43 million of favorable development on prior accident years, including $4 million of favorable development in commercial lines, $8 million of favorable development in personal lines and $7 million of favorable development in excess and surplus lines for the three months ended September 30, 2022. Within commercial lines, we recognized favorable reserve development of $24 million for the commercial property line and $16 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $23 million for the commercial casualty line and $16 million for the commercial auto line. We experienced $143 million of favorable development on prior accident years, including $51 million of favorable development in commercial lines, $56 million of favorable development in personal lines and $13 million of favorable development in excess and surplus lines for the nine months ended September 30, 2022. Within commercial lines, we recognized favorable reserve development of $43 million for the workers' compensation line and $36 million for the commercial property line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $25 million for the commercial casualty line and $15 million for the commercial auto line. Within personal lines, we recognized favorable reserve development of $51 million for the homeowner line.