
	Six Months Ended June 30
(in millions of U.S. dollars)	2020		2019
Gross unpaid losses and loss expenses – beginning of period	$	62,690	$	62,960
Reinsurance recoverable on unpaid losses - beginning of period ⁽¹⁾	(14,181)		(14,689)
Net unpaid losses and loss expenses – beginning of period	48,509		48,271


Net losses and loss expenses incurred in respect of losses occurring in:
Current year	11,111		9,224
Prior years ⁽²⁾	(49)		(411)
Total	11,062		8,813
Net losses and loss expenses paid in respect of losses occurring in:
Current year	2,263		2,288
Prior years	5,842		5,823
Total	8,105		8,111
Foreign currency revaluation and other	(128)		(1)
Net unpaid losses and loss expenses – end of period	51,338		48,972
Reinsurance recoverable on unpaid losses ⁽¹⁾	14,361		14,233
Gross unpaid losses and loss expenses – end of period	$	65,699	$	63,205

⁽²⁾Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments and earned premiums totaling $6 million and $19 million for the six months ended June 30, 2020 and 2019, respectively.

Gross and net unpaid losses and loss expenses increased $3,009 million and $2,829 million, respectively, for the six months ended June 30, 2020, driven by catastrophe losses incurred principally related to the COVID-19 pandemic and an increase in underlying reserves, partially offset by favorable foreign exchange movement.

Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years. Long-tail lines include lines such as workers' compensation, general liability, and professional liability; while short-tail lines include lines such as most property lines, energy, personal accident, and agriculture.


	Three Months Ended June 30										Six Months Ended June 30
(in millions of U.S. dollars)	Long-tail		Short-tail		Total		Long-tail		Short-tail		Total
2020
North America Commercial P&C Insurance	$	(141)	$	(5)	$	(146)	$	(184)	$	(67)	$	(251)
North America Personal P&C Insurance	—		(1)		(1)		—		—		—
North America Agricultural Insurance	—		—		—		—		(14)		(14)
Overseas General Insurance	(1)		(35)		(36)		(1)		(39)		(40)
Global Reinsurance	(19)		3		(16)		(19)		(4)		(23)
Corporate	274		—		274		285		—		285
Total	$	113	$	(38)	$	75	$	81	$	(124)	$	(43)
2019
North America Commercial P&C Insurance	$	(206)	$	21	$	(185)	$	(271)	$	(45)	$	(316)
North America Personal P&C Insurance	—		(16)		(16)		—		(26)		(26)
North America Agricultural Insurance	—		—		—		—		(61)		(61)
Overseas General Insurance	—		(20)		(20)		—		(24)		(24)
Global Reinsurance	(33)		33		—		(34)		26		(8)
Corporate	33		—		33		43		—		43
Total	$	(206)	$	18	$	(188)	$	(262)	$	(130)	$	(392)

Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate.

For the three months ended June 30, 2020, net favorable PPD was $146 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

•Net favorable development of $152 million in our workers’ compensation lines. This included favorable development of $62 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2019 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. This development in accident year 2019 was partially offset by some higher than expected activity from other claims. The remaining overall favorable development was mainly in accident years 2015 and prior, driven by lower than expected loss experience and related updates to loss development factors;

•Net favorable development of $59 million in general liability portfolios, mainly driven by lower than expected paid and reported loss experience in accident years 2016 and prior, partly offset by some adverse emergence in accident years 2017 through 2019;

•Net adverse development of $75 million in commercial automobile liability, mainly in high deductible and excess portfolios, driven by adverse paid and reported loss experience and related updates to loss development factors, mainly in accident years 2015 through 2019; and

For the six months ended June 30, 2020, net favorable PPD was $251 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

•Net favorable development of $43 million in voluntary environmental lines, in accident years 2016 and prior, due to lower than expected emergence and a favorable revision to loss development patterns;

•Net favorable development of $36 million in general liability coverages, mainly due to the same factors experienced for the three months ended June 30, 2020, as described above, as well as adverse wholesale general liability results, driven by higher than expected reported loss emergence in accident years 2014 through 2019;

•Net adverse development of $40 million in excess and umbrella portfolios, with accident years 2015 through 2019 experiencing higher than expected reported development, partially offset by lower than expected emergence in accident years 2014 and prior; and

For the three months ended June 30, 2019, net favorable PPD was $185 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

•Net favorable development of $163 million in our workers’ compensation lines. This included favorable development of $61 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2018 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. This development in accident year 2018 was partially offset by some higher than expected activity from other claims and from involuntary pools. The remaining overall favorable development was mainly in accident years 2014 and prior, driven by lower than expected loss experience and related updates to loss development factors;

•Net favorable development of $50 million in our general liability portfolios, mainly driven by lower than expected paid and reported loss experience in accident years 2015 and prior, partly offset by adverse developments in more recent accident years; and

•Net adverse development of $21 million in short-tail business, which was the result of several adverse movements, in lines such as automobile physical damage and involuntary pools, none of which were significant individually or in the aggregate, mainly impacting accident year 2018.

For the six months ended June 30, 2019, net favorable PPD was $316 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

•Net favorable development of $200 million in our workers’ compensation lines, mainly due to the same factors experienced for the three months ended June 30, 2019, as described above;

•Net favorable development of $54 million in professional liability (errors & omissions and cyber), mainly in the 2015 and prior accident years where case activity was less than expected, partially offset by adverse development in the 2016 accident year, which was driven by several large adverse claim developments;

•Net favorable development of $31 million in commercial excess and umbrella portfolios, driven by the 2013 and prior accident years, where case emergence was less than expected and greater weight was given to experience-based methods; this was partially offset by higher than expected claim activity in the 2015, 2016, and 2018 accident years which led to reserve strengthening in those years; and

•Net favorable development of $45 million in short-tail business, primarily from favorable development of $49 million in surety business, mainly in the 2017 accident year, driven by lower than expected reported loss activity.

Prior period development in this segment mainly relates to our Multiple Peril Crop Insurance (MPCI) business and was favorable due to better than expected crop yield results in certain states at the prior year-end period (i.e., 2020 results based on 2019 crop year).

For the three and six months ended June 30, 2020, net favorable PPD was $36 million and $40 million, respectively, which was the net result of several underlying favorable and adverse movements, including $19 million and $22 million, respectively, in marine lines across all regions mainly in accident years 2017 and 2018 and favorable case-specific settlements in accident years 2014 and prior.

For the three and six months ended June 30, 2020, net favorable PPD was $16 million and $23 million, respectively, which was the net result of several underlying favorable and adverse movements, none of which is significant individually or in the aggregate.

For the three and six months ended June 30, 2020, net adverse development was $274 million and $285 million, respectively, driven by adverse development of $254 million for U.S. child molestation claims, predominantly reviver statute-related. The remainder of the adverse development ($20 million and $31 million, respectively) was driven by increased claim costs on a limited number of non-A&E run-off casualty and workers’ compensation exposures, and charges relating to unallocated loss adjustment expenses due to run-off operating expenses.

For the three and six months ended June 30, 2019, net adverse development was $33 million and $43 million, respectively, from the non A&E run-off casualty exposures, including workers' compensation, driven by increased claim costs and net adverse settlements on a limited number of claims and charges relating to unallocated loss adjustment expenses due to run-off operating expenses.