Accrued Workers' Compensation Costs

12 Months Ended

Dec. 31, 2019

The following table summarizes the accrued workers’ compensation cost activity for the years ended December 31, 2019, 2018 and 2017:



	Year Ended December 31,
(in millions)	2019			2018			2017
Total accrued costs, beginning of year	$	238		$	255		$	255
Incurred
Current year	72			80			98
Prior years	(31		)	(28		)	(6		)
Total incurred	41			52			92
Paid
Current year	(14		)	(12		)	(14		)
Prior years	(51		)	(57		)	(78		)
Total paid	(65		)	(69		)	(92		)
Total accrued costs, end of year	$	214		$	238		$	255

The following table summarizes workers' compensation liabilities on the consolidated balance sheets:



(in millions)	December 31, 2019			December 31, 2018
Total accrued costs, end of year	$	214		$	238
Collateral paid to carriers and offset against accrued costs	(9		)	(13		)
Total accrued costs, net of carrier collateral offset	$	205		$	225

Payable in less than 1 year (net of collateral paid to carriers of $3 as of December 31, 2019 and 2018)	$	61		$	67
Payable in more than 1 year (net of collateral paid to carriers of $6 and $10 as of December 31, 2019 and 2018, respectively)	144			158
Total accrued costs, net of carrier collateral offset	$	205		$	225

Incurred claims related to prior years represent changes in estimates for ultimate losses on workers' compensation claims. For the years ended December 31, 2019 and December 31, 2018, the favorable development was primarily due to lower than expected severity development on claims that had previously been reported, as well as a lower than expected reported claim frequency. For the year ended December 31, 2017, the favorable development was primarily due to lower than expected severity of reported claims associated with office worker WSEs in recent accident years.

As of December 31, 2019 and 2018, we had $46 million and $57 million, respectively, of collateral held by insurance carriers of which $9 million and $13 million, respectively, was offset against accrued workers' compensation costs as the agreements permit and are net settled of insurance obligations against collateral held.