Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses Level 3 (Tables)
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12 Months Ended |
Dec. 31, 2015 |
|---|
| Liability for Future Policy Benefit, by Product Segment [Line Items] |
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| Property and Casualty Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses |
The following table presents (favorable) unfavorable prior accident year development: | | | | | | | | | | | | For the years ended December 31, | | 2015 | 2014 | 2013 | Auto liability | $ | 54 |
| $ | 25 |
| $ | 144 |
| Homeowners | 9 |
| (7 | ) | (6 | ) | Professional liability | (36 | ) | (17 | ) | (29 | ) | Package business | 28 |
| 3 |
| 2 |
| General liability | 8 |
| (25 | ) | (75 | ) | Bond | (2 | ) | 8 |
| (8 | ) | Commercial property | (6 | ) | 2 |
| (7 | ) | Net asbestos reserves | 146 |
| 212 |
| 130 |
| Net environmental reserves | 55 |
| 30 |
| 12 |
| Uncollectible reinsurance | — |
| — |
| (25 | ) | Workers’ compensation | (37 | ) | (7 | ) | (2 | ) | Workers’ compensation - NY 25a Fund for Reopened Cases | — |
| — |
| 80 |
| Workers’ compensation discount accretion | 29 |
| 30 |
| 30 |
| Catastrophes | (18 | ) | (45 | ) | (63 | ) | Other reserve re-estimates, net | 20 |
| 19 |
| 9 |
| Total prior accident year development | $ | 250 |
| $ | 228 |
| $ | 192 |
|
Net unfavorable reserve development in 2015 primarily included the following: | | • | an increase in commercial auto liability reserves, predominantly for accident years 2010 through 2013; |
| | • | an increase in package business reserves driven by higher than expected severity on liability claims; |
| | • | an increase in net asbestos and net environmental reserves driven by the annual ground-up asbestos and environmental reserve evaluations; |
| | • | partially offset by a decrease in professional liability reserves, for accident years 2009 through 2012; |
| | • | also offset by a decrease in and workers' compensation reserves, due to an improvement in claim closure rates resulting in a decrease in outstanding claims for permanently disabled claimants; and |
| | • | also offset by a decrease in catastrophe reserves primarily for accident year 2014. |
Net unfavorable reserve development in 2014 primarily included the following: | | • | an increase in commercial auto liability reserves, for several accident years; |
| | • | an increase in net asbestos reserves driven by the annual ground-up asbestos reserve evaluation; |
| | • | partially offset by a decrease in general liability reserves due to lower frequency in late emerging claims; and |
| | • | also offset by a decrease in professional liability reserves, for accident years 2010, 2012 and 2013; and |
| | • | also offset by a decrease in catastrophe reserves primarily for accident year 2013. |
Net unfavorable reserve development in 2013 primarily included the following: | | • | an increase in commercial auto liability reserves, for accident years 2010 through 2012; |
| | • | an increase related to the closing of the New York Section 25A Fund for Reopened Cases; |
| | • | an increase in net asbestos reserves driven by the annual ground-up asbestos reserve evaluation; |
| | • | partially offset by a decrease in general liability reserves, for accident years 2006 through 2011; and |
| | • | also offset by a decrease in professional liability reserves, for accident years 2008 through 2012; and |
| | • | also offset by a decrease in catastrophe reserves primarily related to Storm Sandy. |
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| Life Insurance Products Liability for future policy benefits and unpaid losses and loss adjustment expenses |
The liability for future policy benefits and unpaid losses and loss adjustment expenses is as follows: | | | | | | | | | As of December 31, | | 2015 | 2014 | Group life term, disability and accident unpaid losses and loss adjustment expenses | $ | 5,965 |
| $ | 6,084 |
| Group life other unpaid losses and loss adjustment expenses | 174 |
| 203 |
| Individual life unpaid losses and loss adjustment expenses | 257 |
| 171 |
| Future policy benefits | 13,351 |
| 13,180 |
| Future policy benefits, unpaid losses and loss adjustment expenses | $ | 19,747 |
| $ | 19,638 |
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| Group Insurance Policies [Member] |
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| Liability for Future Policy Benefit, by Product Segment [Line Items] |
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| Property and Casualty Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses |
Life Insurance, Disability and Accident Products Unpaid Losses and Loss Adjustment Expenses A roll-forward of liabilities for group life, disability and accident, for unpaid losses and loss adjustment expenses follows: | | | | | | | | | | | | For the years ended December 31, | | 2015 | 2014 | 2013 | Beginning liabilities for unpaid losses and loss adjustment expenses, gross | $ | 6,084 |
| $ | 6,308 |
| $ | 6,547 |
| Reinsurance recoverables | 271 |
| 267 |
| 252 |
| Beginning liabilities for unpaid losses and loss adjustment expenses, net | 5,813 |
| 6,041 |
| 6,295 |
| Provision for unpaid losses and loss adjustment expenses | | | | Current accident year | 2,371 |
| 2,370 |
| 2,534 |
| Prior accident year development | 64 |
| (11 | ) | (17 | ) | Total provision for unpaid losses and loss adjustment expenses | 2,435 |
| 2,359 |
| 2,517 |
| Less: payments | | | | Current accident year | 1,214 |
| 1,161 |
| 1,207 |
| Prior accident years | 1,354 |
| 1,426 |
| 1,564 |
| Total payments | 2,568 |
| 2,587 |
| 2,771 |
| Ending liabilities for unpaid losses and loss adjustment expenses, net | 5,680 |
| 5,813 |
| 6,041 |
| Reinsurance recoverables | 285 |
| 271 |
| 267 |
| Ending liabilities for unpaid losses and loss adjustment expenses, gross | $ | 5,965 |
| $ | 6,084 |
| $ | 6,308 |
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The liability for unpaid losses and loss adjustment expenses for group life, disability and accident contracts was discounted to present value using rates based on the Company’s earned investment yield estimated at the time the claims are incurred. The increase in the provision for unpaid losses and loss adjustment expenses is primarily due to higher claim severity on the long-term disability product. |
| Property, Liability and Casualty Insurance Product Line [Member] |
|
| Liability for Future Policy Benefit, by Product Segment [Line Items] |
|
| Property and Casualty Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses |
A roll-forward of liabilities for unpaid losses and loss adjustment expenses follows: | | | | | | | | | | | | For the years ended December 31, | | 2015 | 2014 | 2013 | Beginning liabilities for unpaid losses and loss adjustment expenses, gross | $ | 21,806 |
| $ | 21,704 |
| $ | 21,716 |
| Reinsurance and other recoverables | 3,041 |
| 3,028 |
| 3,027 |
| Beginning liabilities for unpaid losses and loss adjustment expenses, net | 18,765 |
| 18,676 |
| 18,689 |
| Provision for unpaid losses and loss adjustment expenses | |
| |
| |
| Current accident year | 6,647 |
| 6,572 |
| 6,621 |
| Prior accident year development | 250 |
| 228 |
| 192 |
| Total provision for unpaid losses and loss adjustment expenses | 6,897 |
| 6,800 |
| 6,813 |
| Less: payments | |
| |
| |
| Current accident year | 2,653 |
| 2,639 |
| 2,552 |
| Prior accident years | 4,066 |
| 4,072 |
| 4,274 |
| Total payments | 6,719 |
| 6,711 |
| 6,826 |
| Ending liabilities for unpaid losses and loss adjustment expenses, net | 18,943 |
| 18,765 |
| 18,676 |
| Reinsurance and other recoverables [1] | 2,882 |
| 3,041 |
| 3,028 |
| Ending liabilities for unpaid losses and loss adjustment expenses, gross | $ | 21,825 |
| $ | 21,806 |
| $ | 21,704 |
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| | [1] | Includes reinsurance recoverables of $2,515, $2,730 and $2,735 as of December 31, 2015, 2014 and 2013, respectively. |
As of December 31, 2015 and 2014, property and casualty insurance products reserves were discounted by a total of $523 and $556, respectively. The current accident year benefit from discounting property and casualty insurance products reserves was $35 in 2015, $34 in 2014 and $46 in 2013. The reduction in the discount benefit in 2014 as compared to 2013 reflects lower claim volume and a shorter than expected payment pattern in 2014. Accretion of discounts for prior accident years totaled $38 in 2015, $31 in 2014, and $31 in 2013. The reserves recorded for the Company’s property and casualty insurance products at December 31, 2015 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant uncertainties surrounding reserves, and particularly asbestos and environmental exposures, it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to the Company’s results of operations or cash flows. For additional information, see Note 12 - Commitments and Contingencies, Guaranty Fund and Other Insurance-related Assessments. Losses and loss adjustment expenses are also impacted by trends including frequency and severity as well as changes in the legislative and regulatory environment. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured. |