BENEFITS PAYABLE

On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the nine months ended September 30, 2018 and 2017:



	For the nine months ended September 30,
	2018			2017
	(in millions)
Balances, beginning of period	$	4,668		$	4,563
Less: Reinsurance recoverables	(70		)	(76		)
Balances, beginning of period, net	4,598			4,487
Incurred related to:
Current year	34,915			33,318
Prior years	(467		)	(430		)
Total incurred	34,448			32,888
Paid related to:
Current year	(30,204		)	(28,741		)
Prior years	(3,920		)	(3,745		)
Total paid	(34,124		)	(32,486		)
Reinsurance recoverable	98			70
Balances, end of period	$	5,020		$	4,959

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, 2018 and 2017.



	For the nine months ended September 30,
	2018			2017
	(in millions)
Future policy benefits:
Individual Commercial	$	(14	)	$	(67	)
Other Businesses	15			36
Total future policy benefits	$	1		$	(31	)

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, 2018 and 2017, 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, 2018 and 2017:



	For the nine months ended September 30,
	2018			2017
	(in millions)
Balances, beginning of period	$	3,963		$	3,507
Less: Reinsurance recoverables	(70		)	(76		)
Balances, beginning of period, net	3,893			3,431
Incurred related to:
Current year	31,209			29,356
Prior years	(367		)	(339		)
Total incurred	30,842			29,017
Paid related to:
Current year	(27,062		)	(25,460		)
Prior years	(3,334		)	(2,822		)
Total paid	(30,396		)	(28,282		)
Reinsurance recoverable	98			70
Balances, end of period	$	4,437		$	4,236

At September 30, 2018, benefits payable for our Retail segment included IBNR of approximately $2.8 billion, primarily associated with claims incurred in 2018.

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, 2018 and 2017:



	For the nine months ended September 30,
	2018			2017
	(in millions)
Balances, beginning of period	$	568		$	578
Incurred related to:
Current year	4,018			3,996
Prior years	(41		)	(44		)
Total incurred	3,977			3,952
Paid related to:
Current year	(3,462		)	(3,452		)
Prior years	(509		)	(517		)
Total paid	(3,971		)	(3,969		)
Balances, end of period	$	574		$	561

At September 30, 2018, benefits payable for our Group and Specialty segment included IBNR of approximately $490 million, primarily associated with claims incurred in 2018.

Individual Commercial Segment

Activity in benefits payable for our Individual Commercial segment was as follows for the nine months ended September 30, 2018 and 2017:



	For the nine months ended September 30,
	2018			2017
	(in millions)
Balances, beginning of period	$	101		$	454
Incurred related to:
Current year	—			502
Prior years	(58		)	(46		)
Total incurred	(58		)	456
Paid related to:
Current year	—			(393		)
Prior years	(34		)	(383		)
Total paid	(34		)	(776		)
Balance, end of period	$	9		$	134

At September 30, 2018, benefits payable for our Individual Commercial segment included IBNR of approximately $2 million, associated with claims incurred in 2017 and prior.

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,
	2018
Net outstanding liabilities
Retail	$	4,339
Group and Specialty	574
Individual Commercial	9
Other Businesses	—
Benefits payable, net of reinsurance	4,922

Reinsurance recoverable on unpaid claims
Retail	98
Total benefits payable, gross	$	5,020