NOTE 5 – 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 June 30,						Six months ended June 30,
	2011			2010			2011			2010
Gross loss and loss expense reserves, beginning of period	$	4,179		$	4,065		$	4,137		$	4,096
Less reinsurance receivable		326			343			326			435
Net loss and loss expense reserves, beginning of period		3,853			3,722			3,811			3,661
Net incurred loss and loss expenses related to:
Current accident year		853			625			1,442			1,139
Prior accident years		(96	)		(73	)		(155	)		(113	)
Total incurred		757			552			1,287			1,026
Net paid loss and loss expenses related to:
Current accident year		391			221			522			333
Prior accident years		248			233			608			534
Total paid		639			454			1,130			867

Net loss and loss expense reserves, end of period		3,971			3,820			3,971			3,820
Plus reinsurance receivable		508			311			508			311
Gross loss and loss expense reserves, end of period	$	4,479		$	4,131		$	4,479		$	4,131

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. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial management, who 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.

We decreased the provision for prior accident years’ incurred loss and loss expenses primarily due to reduced volatility in paid losses and reduced volatility in projections of future calendar year trends and favorable case reserve development. The reserve for loss and loss expenses in the condensed consolidated balance sheets also includes $56 million at June 30, 2011, and $53 million at June 30, 2010, for certain life and health loss and loss expense reserves.