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Loss And Loss Adjustment Expense Reserves (Tables)

12 Months Ended

Dec. 31, 2017

Insurance [Abstract]

Activity in Loss and Loss Adjustment Expense Reserves

Activity in the loss and loss adjustment expense reserves is summarized as follows:

(millions)	2017			2016			2015
Balance at January 1	$	11,368.0		$	10,039.0		$	8,857.4
Less reinsurance recoverables on unpaid losses	1,801.0			1,442.7			1,185.9
Net balance at January 1	9,567.0			8,596.3			7,671.5
Net loss and loss adjustment reserves (disposed) acquired1	0			(2.5		)	222.4
Total beginning reserves	9,567.0			8,593.8			7,893.9
Incurred related to:
Current year	18,782.1			16,967.1			14,657.1
Prior years	25.9			(87.5		)	(315.1		)
Total incurred	18,808.0			16,879.6			14,342.0
Paid related to:
Current year	12,201.5			11,149.0			9,577.3
Prior years	5,256.7			4,757.4			4,062.3
Total paid	17,458.2			15,906.4			13,639.6
Net balance at December 31	10,916.8			9,567.0			8,596.3
Plus reinsurance recoverables on unpaid losses	2,170.1			1,801.0			1,442.7
Balance at December 31	$	13,086.9		$	11,368.0		$	10,039.0

¹ During 2016, $2.5 million net reserves were disposed by ARX in an exchange transaction (see Note 16 – Goodwill and Intangible Assets for further discussion). During 2015, $222.4 million net reserves were acquired in the ARX acquisition.

Short-duration Insurance Contracts, Claims Development

The following tables show incurred and paid claims development, net of reinsurance, by accident year. Only 2017 is audited; all prior years are considered required supplementary information and, therefore, are unaudited. Expected development on our case reserves is excluded from the IBNR reserves on our vehicle businesses, as discussed above. For the Property business, the IBNR reserves include expected case development based on the methodology used in establishing the case reserves for that segment. The cumulative number of incurred claims are based on accident coverages (e.g., bodily injury, collision, comprehensive, personal injury protection, property damage) related to opened claims. Coverage counts related to claims closed without payment are excluded from the cumulative number of incurred claims.

Personal Lines - Agency - Liability
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	3,506.0			$	3,520.9			$	3,518.2			$	3,528.0			$	3,484.2			$	0			696,624
2014						3,702.1				3,627.7				3,633.2				3,654.4				50.9				701,787
2015										3,774.9				3,773.8				3,798.8				59.2				704,990
2016														4,082.9				4,130.0				158.7				738,563
2017																		4,474.8				679.6				765,553
														Total				$	19,542.2
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	1,684.0			$	2,794.1			$	3,173.1			$	3,362.9			$	3,437.6
2014						1,809.0				2,868.1				3,284.5				3,482.3
2015										1,793.1				2,976.0				3,416.5
2016														1,941.6				3,231.5
2017																		2,074.0
														Total				$	15,641.9
		All outstanding liabilities before 2013, net of reinsurance1																55.2
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	3,955.5

¹ Required supplementary information (unaudited)

Personal Lines - Agency - Physical Damage
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	2,014.0			$	2,001.4			$	2,000.1			$	1,999.4			$	2,001.1			$	0			1,347,920
2014						2,107.5				2,090.3				2,089.9				2,088.0				(3.3		)		1,374,666
2015										2,136.8				2,137.2				2,134.4				(2.6		)		1,336,268
2016														2,423.4				2,398.9				(12.1		)		1,398,371
2017																		2,635.5				(101.8		)		1,496,298
														Total				$	11,257.9
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	1,952.7			$	2,003.9			$	2,002.0			$	2,001.3			$	2,000.8
2014						2,078.8				2,091.6				2,090.6				2,090.7
2015										2,106.2				2,138.1				2,134.4
2016														2,391.0				2,406.9
2017																		2,599.8
														Total				$	11,232.6
		All outstanding liabilities before 2013, net of reinsurance1																0.9
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	26.2

¹ Required supplementary information (unaudited)

Personal Lines - Direct - Liability
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	2,619.4			$	2,621.8			$	2,615.8			$	2,649.8			$	2,612.9			$	0			550,166
2014						2,946.8				2,887.4				2,898.1				2,913.6				38.2				592,185
2015										3,330.5				3,328.3				3,354.2				48.6				659,102
2016														3,819.0				3,843.9				143.0				733,195
2017																		4,209.5				598.6				761,280
														Total				$	16,934.1
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	1,252.0			$	2,085.1			$	2,375.5			$	2,521.3			$	2,577.8
2014						1,413.0				2,278.0				2,624.2				2,780.0
2015										1,545.2				2,615.0				3,021.0
2016														1,780.6				2,991.1
2017																		1,912.6
														Total				$	13,282.5
		All outstanding liabilities before 2013, net of reinsurance1																33.5
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	3,685.1

¹ Required supplementary information (unaudited)

Personal Lines - Direct - Physical Damage
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	1,653.7			$	1,635.6			$	1,634.6			$	1,633.4			$	1,635.0			$	0			1,367,341
2014						1,889.3				1,862.2				1,861.7				1,859.2				(3.2		)		1,471,016
2015										2,110.7				2,097.7				2,093.5				(3.0		)		1,539,790
2016														2,521.0				2,475.4				(14.3		)		1,675,405
2017																		2,750.6				(145.3		)		1,779,665
														Total				$	10,813.7
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	1,612.9			$	1,638.2			$	1,636.2			$	1,635.3			$	1,635.0
2014						1,874.6				1,864.1				1,862.7				1,861.8
2015										2,094.7				2,100.1				2,094.7
2016														2,505.0				2,485.8
2017																		2,742.1
														Total				$	10,819.4
		All outstanding liabilities before 2013, net of reinsurance1																0.1
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	(5.6	)

¹ Required supplementary information (unaudited)

Commercial Lines - Liability
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	864.2			$	864.6			$	865.4			$	865.0			$	840.8			$	0			78,075
2014						822.5				795.4				820.3				823.0				15.9				74,724
2015										897.6				911.1				914.8				23.7				77,807
2016														1,185.8				1,204.8				63.1				92,196
2017																		1,374.1				219.2				94,992
														Total				$	5,157.5
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	233.3			$	509.4			$	659.1			$	752.5			$	802.6
2014						234.0				438.7				610.0				715.3
2015										238.4				501.5				675.0
2016														298.6				639.9
2017																		325.8
														Total				$	3,158.6
		All outstanding liabilities before 2013, net of reinsurance1																28.5
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	2,027.4

¹ Required supplementary information (unaudited)

Commercial Lines - Physical Damage
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	256.2			$	254.2			$	254.5			$	253.7			$	254.2			$	0			62,673
2014						240.3				239.7				238.6				238.0				(0.5		)		59,622
2015										274.4				274.1				273.5				(0.1		)		62,593
2016														379.6				379.8				(0.9		)		74,217
2017																		415.4				(5.7		)		77,767
														Total				$	1,560.9
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	239.4			$	253.1			$	253.9			$	253.7			$	253.8
2014						224.6				238.3				237.7				237.9
2015										248.5				271.9				272.0
2016														336.7				376.9
2017																		369.0
														Total				$	1,509.6
		All outstanding liabilities before 2013, net of reinsurance1																0.4
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	51.7

¹ Required supplementary information (unaudited)

Property Business
($ in millions)																						As of
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						December 31, 2017
		For the years ended December 31,																				Total of IBNR Liabilities Plus Expected Development on Reported Claims				Cumulative Number of Incurred Claim Counts
Accident Year		20131				20141				20151				20161				2017
2013		$	307.3			$	283.3			$	254.3			$	254.1			$	253.9			$	2.5			30,600
2014						415.5				389.1				379.7				376.3				3.6				40,984
2015										460.0				416.5				403.6				11.5				41,957
2016														568.6				541.2				24.8				53,323
2017																		672.8				99.7				64,487
														Total				$	2,247.8
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
		For the years ended December 31,
Accident Year		20131				20141				20151				20161				2017
2013		$	185.1			$	234.2			$	244.9			$	249.5			$	250.5
2014						269.2				351.5				365.9				370.3
2015										280.3				372.8				383.5
2016														415.2				498.2
2017																		506.7
														Total				$	2,009.2
		All outstanding liabilities before 2013, net of reinsurance1																7.2
		Liabilities for claims and claim adjustment expenses, net of reinsurance																$	245.8

¹ Required supplementary information (unaudited)

Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability

The following table reconciles the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses:

(millions)	2017				2016
Net outstanding liabilities
Personal Lines
Agency, Liability	$	3,955.5			$	3,555.9
Agency, Physical Damage	26.2				30.1
Direct, Liability	3,685.1				3,219.1
Direct, Physical Damage	(5.6		)		11.2
Commercial Lines
Liability	2,027.4				1,675.3
Physical Damage	51.7				46.6
Property	245.8				224.7
Other business	43.7				37.1
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance	10,029.8				8,800.0
Reinsurance recoverable on unpaid claims
Personal Lines
Agency, Liability	769.8				724.5
Agency, Physical Damage	0				0
Direct, Liability	838.1				724.3
Direct, Physical Damage	0				0
Commercial Lines
Liability	105.1				59.5
Physical Damage	0.1				0
Property	243.8				132.7
Other business	200.9				154.9
Total reinsurance recoverable on unpaid claims	$	2,157.8			$	1,795.9
Unallocated claims adjustment expense related to:
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance	887.0				767.0
Reinsurance recoverable on unpaid claims	12.3				5.1
Total gross liability for unpaid claims and claim adjustment expense	$	13,086.9			$	11,368.0

Short-duration Insurance Contracts, Schedule of Historical Claims Duration

The following table shows the average historical claims duration as of December 31, 2017:

(Required Supplementary Information - Unaudited)
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance	Years
	1	2	3	4	5
Personal Lines
Agency, Liability	47.6%	30.8%	11.3%	5.4%	2.1%
Agency, Physical Damage	98.9%	1.3%	(0.1)%	0%	0%
Direct, Liability	46.7%	31.3%	11.7%	5.5%	2.2%
Direct, Physical Damage	100.1%	0%	(0.2)%	(0.1)%	0%
Commercial Lines
Liability	25.8%	28.7%	19.2%	11.9%	6.0%
Physical Damage	90.9%	7.9%	0%	0%	0%
Property	73.7%	19.5%	3.5%	1.4%	0.4%

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Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

+ References

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-Publisher FASB
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Tabular disclosure of undiscounted information about claims development by accident year for short-duration insurance contracts.

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-Publisher FASB
-Name Accounting Standards Codification
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Tabular disclosure for the reconciliation of claims development to the liability for unpaid claims and claim adjustment expense for short-duration insurance contracts.

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Tabular disclosure of average annual percentage payout of incurred claims by age, after reinsurance, for short-duration insurance contracts.

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