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Reserve for Unpaid Losses and Loss Adjustment Expenses
 6 Months Ended
Jun. 30, 2018
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract]  
Reserve for Unpaid Losses and Loss Adjustment Expenses
Property and Casualty Insurance Products
Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses
 
For the six months ended June 30,
 
2018
2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross
$
23,775

$
22,545

Reinsurance and other recoverables
3,957

3,488

Beginning liabilities for unpaid losses and loss adjustment expenses, net
19,818

19,057

Provision for unpaid losses and loss adjustment expenses
 

 

Current accident year
3,362

3,563

Prior accident year development
(79
)
2

Total provision for unpaid losses and loss adjustment expenses
3,283

3,565

Less payments
 

 

Current accident year
934

1,009

Prior accident years
2,308

2,292

Total payments
3,242

3,301

Ending liabilities for unpaid losses and loss adjustment expenses, net
19,859

19,321

Reinsurance and other recoverables
3,772

3,508

Ending liabilities for unpaid losses and loss adjustment expenses, gross
$
23,631

$
22,829


Unfavorable (Favorable) Prior Accident Year Development
 
For the six months ended June 30,
 
2018
2017
Workers’ compensation
$
(73
)
$
(20
)
Workers’ compensation discount accretion
20

16

General liability
28

10

Package business
(7
)
—

Commercial property
(12
)
(6
)
Professional liability
8

—

Bond
—

(10
)
Automobile liability - Commercial Lines
(10
)
20

Automobile liability - Personal Lines
—

—

Homeowners
(13
)
—

Net asbestos reserves
—

—

Net environmental reserves
—

—

Catastrophes
(34
)
(13
)
Uncollectible reinsurance
11

—

Other reserve re-estimates, net
3

5

Total prior accident year development
$
(79
)
$
2


Re-estimates of prior accident year reserves for the six months ended June 30, 2018
Workers’ compensation reserves were reduced in small commercial and middle market, primarily for accident years 2011 to 2015, as both claim frequency and medical claim severity have emerged favorably compared to previous reserve estimates.
General liability reserves were increased, primarily due to an increase in reserves for higher hazard general liability exposures in middle market for accident years 2009 to 2017, partially offset by a decrease in reserves for other lines within middle market, including premises and operations, umbrella and products liability, principally for accident years 2015 and prior. Contributing to the increase in reserves for higher hazard general liability exposures was an increase in large losses and, in more recent accident years, an increase in claim frequency. Contributing to the reduction in reserves for other middle market lines were more favorable outcomes due to initiatives to reduce legal expenses. In addition, reserve increases for claims with lead paint exposure were offset by reserve decreases for other mass torts and extra-contractual liability claims.
Commercial property reserves were reduced, driven by an increase in estimated reinsurance recoverables on middle market property losses from the 2017 accident year.
Automobile liability reserves were reduced, primarily driven by reduced estimates of loss adjustment expenses in small commercial for recent accident years.
Homeowners reserves were reduced, primarily in accident years 2013 to 2017, driven by lower than expected severity across multiple perils.
Catastrophe reserves were reduced, primarily as a result of lower estimated net losses from 2017 catastrophes, principally related to hurricanes Harvey and Irma. Before reinsurance, estimated losses for 2017 catastrophe events decreased by $123 in the six months ended June 30, 2018, resulting in a decrease in reinsurance recoverables of $90 as the Company no longer expects to recover under the 2017 Property Aggregate reinsurance treaty as aggregate ultimate losses for 2017 catastrophe events are now projected to be less than $850.
Re-estimates of prior accident year reserves for the six months ended June 30, 2017
Workers’ compensation reserves in small commercial were reduced given the continued emergence of favorable frequency for accident years 2013 to 2015. Management has placed additional weight on this favorable experience as it becomes more credible.
General liability reserves were increased for the 2013 to 2016 accident years on a class of business that insures service and maintenance contractors. This increase was partially offset by a decrease in recent accident year reserves for other middle market general liability reserves.
Bond business reserves related to recent accident years were reduced, as reported losses for commercial and contract surety have emerged favorably.
Automobile liability reserves within Commercial Lines were increased in small commercial and large national accounts for the 2013 to 2016 accident years, driven by higher frequency of more severe accidents, including litigated claims.
Catastrophe reserves were reduced primarily due to lower estimates of 2016 wind and hail event losses and a decrease in losses on a 2015 wildfire.
Group Life, Disability and Accident Products
Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses
 
For the six months ended June 30,
 
2018
2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross
$
8,512

$
5,772

Reinsurance recoverables
209

208

Beginning liabilities for unpaid losses and loss adjustment expenses, net
8,303

5,564

Provision for unpaid losses and loss adjustment expenses




Current incurral year
2,317

1,319

Prior year's discount accretion
120

101

Prior incurral year development [1]
(217
)
(112
)
Total provision for unpaid losses and loss adjustment expenses [2]
2,220

1,308

Less: payments




Current incurral year
974

542

Prior incurral years
1,335

833

Total payments
2,309

1,375

Ending liabilities for unpaid losses and loss adjustment expenses, net
8,214

5,497

Reinsurance recoverables
235

212

Ending liabilities for unpaid losses and loss adjustment expenses, gross
$
8,449

$
5,709

[1]
Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.
[2]
Includes unallocated loss adjustment expenses of $85, and $48 for the six months ended June 30, 2018 and 2017, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations.
Re-estimates of prior incurral years reserves for the six months ended June 30, 2018
Group disability- Prior period reserve estimates decreased by approximately $150 largely driven by group long-term disability claim recoveries higher than prior reserve assumptions and claim incidence lower than prior assumptions.  Short-term disability has also experienced favorable claim recoveries. 
Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $65 largely driven by lower-than-previously expected claim incidence inclusive of group life, group life premium waiver, and group accidental death & dismemberment.
Re-estimates of prior incurral years reserves for the six months ended June 30, 2017
Group disability- Prior period reserve estimates decreased by approximately $65 largely driven by group long-term disability claim recoveries higher than prior reserve assumptions. This favorability was partially reduced by lower expectation of future benefit offsets, particularly lower Social Security disability income approval rates and longer decision turnaround times in the Social Security Administration.
Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $45 largely driven by lower than previously expected claim incidence in group life and group life premium waiver and lower than expected severity on group accidental death & dismemberment.
Changes in Reserves for Future Policy Benefits[1]
Liability balance as of January 1, 2018
$
713

Incurred
14

Paid
(19
)
Change in unrealized investment gains and losses
(40
)
Liability balance as of June 30, 2018
$
668

Reinsurance recoverable asset, as of January 1, 2018
$
26

Incurred
9

Paid
—

Reinsurance recoverable asset, as of June 30, 2018
$
35

Liability balance as of January 1, 2017
$
322

Incurred
23

Paid
(18
)
Change in unrealized investment gains and losses
(9
)
Liability balance as of June 30, 2017
$
318

Reinsurance recoverable asset, as of January 1, 2017
$
28

Incurred
(5
)
Paid
—

Reinsurance recoverable asset, as of June 30, 2017
$
23


[1]Reserves for future policy benefits includes paid-up life insurance and whole-life policies resulting from conversion from group life policies included within the Group Benefits segment and reserves for run-off structured settlement and terminal funding agreement liabilities which are in the Corporate category.