Claim and Claim Adjustment Expense Reserves (Tables)

12 Months Ended

Dec. 31, 2015

Reconciliation of Claim and Claim Adjustment Expense Reserves

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of the Life & Group Non-Core segment.

Year Ended December 31	2015			2014			2013
(In millions)
Reserves, beginning of year:
Gross	$	23,271		$	24,089		$	24,763
Ceded		4,344			4,972			5,126
Net reserves, beginning of year		18,927			19,117			19,637
Change in net reserves due to acquisition (disposition) of subsidiaries					(13	)
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year		4,934			5,043			5,114
Decrease in provision for insured events of prior years		(255	)		(36	)		(115	)
Amortization of discount		166			161			154
Total net incurred (a)		4,845			5,168			5,153
Net payments attributable to:
Current year events		(856	)		(945	)		(981	)
Prior year events		(4,089	)		(4,355	)		(4,588	)
Total net payments		(4,945	)		(5,300	)		(5,569	)
Foreign currency translation adjustment and other		(251	)		(45	)		(104	)
Net reserves, end of year		18,576			18,927			19,117
Ceded reserves, end of year		4,087			4,344			4,972
Gross reserves, end of year	$	22,663		$	23,271		$	24,089

(a) Total net incurred above does not agree to Insurance claims and policyholders’ benefits as reflected in the Consolidated Statements of Income due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and loss deductible receivables and benefit expenses related to future policy benefits and policyholders’ funds, which are not reflected in the table above.

Summary of Gross and Net Carried Reserves

The following tables present the gross and net carried reserves:

December 31, 2015	Specialty		Commercial		International		Other Non-Core		Total
(In millions)
Gross Case Reserves	$	2,011	$	4,975	$	622	$	4,494	$	12,102
Gross IBNR Reserves		4,258		4,208		725		1,370		10,561
Total Gross Carried Claim and Claim Adjustment Expense Reserves	$	6,269	$	9,183	$	1,347	$	5,864	$	22,663
Net Case Reserves	$	1,810	$	4,651	$	531	$	2,844	$	9,836
Net IBNR Reserves		3,758		3,925		688		369		8,740
Total Net Carried Claim and Claim Adjustment Expense Reserves	$	5,568	$	8,576	$	1,219	$	3,213	$	18,576
December 31, 2014
Gross Case Reserves	$	2,136	$	5,298	$	752	$	4,070	$	12,256
Gross IBNR Reserves		4,093		4,216		689		2,017		11,015
Total Gross Carried Claim and Claim Adjustment Expense Reserves	$	6,229	$	9,514	$	1,441	$	6,087	$	23,271
Net Case Reserves	$	1,929	$	4,947	$	598	$	2,716	$	10,190
Net IBNR Reserves		3,726		3,906		663		442		8,737
Total Net Carried Claim and Claim Adjustment Expense Reserves	$	5,655	$	8,853	$	1,261	$	3,158	$	18,927

Net Prior Year Development

The following tables and discussion present the net prior year development recorded for Specialty, Commercial, International and Other Non-Core segments.

Year Ended December 31, 2015	Specialty			Commercial			International			Other			Total
(In millions)
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development	$	(141	)	$	(15	)	$	(54	)	$	-		$	(210	)
Pretax (favorable) unfavorable premium development		(11	)		(15	)		18						(8	)
Total pretax (favorable) unfavorable net prior year development	$	(152	)	$	(30	)	$	(36	)	$	-		$	(218	)
Year Ended December 31, 2014
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development	$	(136	)	$	176		$	(59	)	$	(2	)	$	(21	)
Pretax (favorable) unfavorable premium development		(13	)		(20	)		2			(1	)		(32	)
Total pretax (favorable) unfavorable net prior year development	$	(149	)	$	156		$	(57	)	$	(3	)	$	(53	)
Year Ended December 31, 2013
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development	$	(196	)	$	122		$	(38	)	$	(6	)	$	(118	)
Pretax (favorable) unfavorable premium development		(14	)		(8	)		(21	)		1			(42	)
Total pretax (favorable) unfavorable net prior year development	$	(210	)	$	114		$	(59	)	$	(5	)	$	(160	)

Impact of Loss Portfolio Transfer on Consolidated Statements of Income

The following table presents the impact of the loss portfolio transfer on the Consolidated Statements of Income.

Year Ended December 31	2015			2014			2013
(In millions)
Net A&EP adverse development before consideration of LPT	$	150		$	-		$	363
Provision for uncollectible third party reinsurance on A&EP								140
Additional amounts ceded under LPT		150			-			503
Retroactive reinsurance benefit recognized		(85	)		(13	)		(314	)
Pretax impact of deferred retroactive reinsurance	$	65		$	(13	)	$	189

Specialty [Member]

Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development

The following table and discussion presents further detail of the net prior year claim and allocated claim adjustment expense reserve development (“development”) recorded for the Specialty segment:

Year Ended December 31	2015			2014			2013
(In millions)
Medical professional liability	$	(43	)	$	39		$	(27	)
Other professional liability and management liability					(87	)		(73	)
Surety		(69	)		(82	)		(74	)
Warranty		(2	)		(2	)		(3	)
Other		(27	)		(4	)		(19	)
Total pretax (favorable) unfavorable development	$	(141	)	$	(136	)	$	(196	)

Commercial [Member]

Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development

The following table and discussion presents further detail of the development recorded for the Commercial segment:

Year Ended December 31	2015			2014			2013
(In millions)
Commercial auto	$	(22	)	$	31		$	18
General liability		(33	)		45			64
Workers’ compensation		80			139			91
Property and other		(40	)		(39	)		(51	)
Total pretax (favorable) unfavorable development	$	(15	)	$	176		$	122

International [Member]

Net Prior Year Claim and Allocated Claim Adjustment Expense Reserve Development

The following table and discussion presents further detail of the development recorded for the International segment:

Year Ended December 31	2015			2014			2013
(In millions)
Medical professional liability	$	(9	)	$	(7	)	$	(7	)
Other professional liability		(16	)		(26	)		(30	)
Liability		(17	)		(13	)		(8	)
Property & marine		(29	)		(14	)		13
Other		17			(9	)		(17	)
Commutations					10			11
Total pretax (favorable) unfavorable development	$	(54	)	$	(59	)	$	(38	)