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BENEFITS PAYABLE
 9 Months Ended
Sep. 30, 2017
Insurance [Abstract]  
BENEFITS PAYABLE
BENEFITS PAYABLE
On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the nine months ended September 30, 2017 and 2016:
 
 
For the nine months ended September 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
4,563

 
$
4,976

Less: Premium deficiency reserve
 
—

 
(176
)
Less: Reinsurance recoverables
 
(76
)
 
(85
)
Balances, beginning of period, net
 
4,487

 
4,715

Incurred related to:
 
 
 
 
Current year
 
33,318

 
34,340

Prior years
 
(430
)
 
(525
)
Total incurred
 
32,888

 
33,815

Paid related to:
 
 
 
 
Current year
 
(28,741
)
 
(29,768
)
Prior years
 
(3,745
)
 
(3,996
)
Total paid
 
(32,486
)
 
(33,764
)
Premium deficiency reserve
 
—

 
206

Reinsurance recoverable
 
70

 
77

Balances, end of period
 
$
4,959

 
$
5,049


Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development).
Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant.
Benefits expense excluded from the previous table was as follows for the nine months ended September 30, 2017 and 2016.
 
 
For the nine months ended September 30,
 
 
2017
 
2016
 
 
(in millions)
Premium deficiency reserve - Individual Commercial
 
$
—

 
$
30

Military services
 
—

 
7

Future policy benefits:
 
 
 
 
Individual Commercial
 
(67
)
 
(82
)
Other Businesses
 
36

 
36

Total future policy benefits
 
(31
)
 
(46
)
Total
 
$
(31
)
 
$
(9
)
Military services benefits expense in the tables above reflect expenses associated with our contracts with the Veterans Administration.
Incurred and Paid Claims Development
The following discussion provides information about incurred and paid claims development for our Retail, Group and Specialty, and Individual Commercial segments as of September 30, 2017 and 2016, net of reinsurance and the total of IBNR included within the net incurred claims amounts.
Retail Segment
Activity in benefits payable for our Retail segment was as follows for the nine months ended September 30, 2017 and 2016:
 
 
For the nine months ended September 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
3,507

 
$
3,600

Less: Reinsurance recoverables
 
(76
)
 
(85
)
Balances, beginning of period, net
 
3,431

 
3,515

Incurred related to:
 
 
 
 
Current year
 
29,356

 
28,369

Prior years
 
(339
)
 
(378
)
Total incurred
 
29,017

 
27,991

Paid related to:
 
 
 
 
Current year
 
(25,460
)
 
(24,822
)
Prior years
 
(2,822
)
 
(2,990
)
Total paid
 
(28,282
)
 
(27,812
)
Reinsurance recoverable
 
70

 
77

Balances, end of period
 
$
4,236

 
$
3,771


At September 30, 2017, benefits payable for our Retail segment included IBNR of approximately $2.7 billion, primarily associated with claims incurred in 2017.










Group and Specialty Segment
Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the nine months ended September 30, 2017 and 2016:
 
 
For the nine months ended September 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
578

 
$
616

Incurred related to:
 
 
 
 
Current year
 
3,996

 
3,918

Prior years
 
(44
)
 
(42
)
Total incurred
 
3,952

 
3,876

Paid related to:
 
 
 
 
Current year
 
(3,452
)
 
(3,337
)
Prior years
 
(517
)
 
(557
)
Total paid
 
(3,969
)
 
(3,894
)
Balances, end of period
 
$
561

 
$
598


At September 30, 2017, benefits payable for our Group and Specialty segment included IBNR of approximately $490 million, primarily associated with claims incurred in 2017.

Individual Commercial Segment
Activity in benefits payable for our Individual Commercial segment was as follows for the nine months ended September 30, 2017 and 2016:
 
 
For the nine months ended September 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
454

 
$
740

Less: Premium deficiency reserve
 
—

 
(176
)
Balances, beginning of period, net
 
454

 
564

Incurred related to:
 
 
 
 
Current year
 
502

 
2,694

Prior years
 
(46
)
 
(104
)
Total incurred
 
456

 
2,590

Paid related to:
 
 
 
 
Current year
 
(393
)
 
(2,273
)
Prior years
 
(383
)
 
(430
)
Total paid
 
(776
)
 
(2,703
)
Premium deficiency reserve
 
—

 
206

Balance, end of period
 
$
134

 
$
657


At September 30, 2017, benefits payable for our Individual Commercial segment included IBNR of approximately $120 million, primarily associated with claims incurred in 2017.
Reconciliation to Consolidated

The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated
statement of financial position is as follows:
 
Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance
 
 
 
September 30,
 
 
2017
 
Net outstanding liabilities
 
 
Retail
$
4,166

 
Group and Specialty
561

 
Individual Commercial
134

 
Other Businesses
28

 
    Benefits payable, net of reinsurance
4,889

 
 
 
 
Reinsurance recoverable on unpaid claims
 
 
Retail
70

 
     Total reinsurance recoverable on unpaid claims
70

 
 
 
 
     Total benefits payable, gross
$
4,959