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Reserve for Future Policy Benefits | 9 Months Ended
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Sep. 30, 2019
Insurance Loss Reserves [Abstract] |
Reserve for Future Policy Benefits | Property and Casualty Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses
| For the nine months ended September 30,
| 2019 | 2018
Beginning liabilities for unpaid losses and loss adjustment expenses, gross | $ | 24,584 |  | $ | 23,775 |
Reinsurance and other recoverables | 4,232 |  | 3,957 |
Beginning liabilities for unpaid losses and loss adjustment expenses, net | 20,352 |  | 19,818 |
Navigators Group acquisition | 2,001 |  | — |
Provision for unpaid losses and loss adjustment expenses |  |  |  |
Current accident year | 5,448 |  | 5,151 |
Prior accident year development | (23 | ) | (139 | )
Total provision for unpaid losses and loss adjustment expenses | 5,425 |  | 5,012 |
Payments |  |  |  |
Current accident year | (1,549 | ) | (1,647 | )
Prior accident years | (3,403 | ) | (3,166 | )
Total payments | (4,952 | ) | (4,813 | )
Foreign currency adjustment | (12 | ) | — |
Ending liabilities for unpaid losses and loss adjustment expenses, net | 22,814 |  | 20,017 |
Reinsurance and other recoverables | 5,083 |  | 3,780 |
Ending liabilities for unpaid losses and loss adjustment expenses, gross | $ | 27,897 |  | $ | 23,797 |
Unfavorable (Favorable) Prior Accident Year Development
| For the nine months ended September 30,
| 2019 | 2018
Workers’ compensation | $ | (90 | ) | $ | (97 | )
Workers’ compensation discount accretion | 25 |  | 30 |
General liability | 62 |  | 32 |
Marine | 8 |  | — |
Package business | (32 | ) | (16 | )
Commercial property | (16 | ) | (10 | )
Professional liability | 32 |  | (12 | )
Bond | (2 | ) | — |
Assumed Reinsurance | 3 |  | — |
Automobile liability - Commercial Lines | 27 |  | (15 | )
Automobile liability - Personal Lines | (28 | ) | (10 | )
Homeowners | — |  | (20 | )
Net asbestos reserves | — |  | — |
Net environmental reserves | — |  | — |
Catastrophes | (27 | ) | (47 | )
Uncollectible reinsurance | — |  | 22 |
Other reserve re-estimates, net | 15 |  | 4 |
Total prior accident year development [1] | $ | (23 | ) | $ | (139 | )
[1] Included a prior accident year reserve increase of $68 related to the Navigators Group acquisition for the nine months ended September 30, 2019 consisting of $34 for general liability, $25 for professional liability, $10 for marine, $3 for assumed reinsurance and $2 for commercial auto liability, partially offset by a reserve decrease of $6 for commercial property. Re-estimates of prior accident year reserves for the nine months ended September 30, 2019 Workers’ compensation reserves were reduced, principally in small commercial driven by lower than previously estimated claim severity for the 2014 through 2017 accident years and, to a lesser extent, in national accounts due to lower estimated claim severity, primarily for accident years 2013 and prior. General liability reserves were increased, primarily due to reserve increases in small commercial for accident years 2017 and 2018 due to higher frequency of high-severity bodily injury claims, reserve increases in middle and large commercial for accident years 2015 to 2018 due to higher estimated severity, as well as increased estimated severity on the acquired Navigators book of business related to U.S. construction, premises liability, products liability and excess casualty, mostly related to accident years 2014 to 2018. In addition, an increase in reserves for mass torts was offset by a decrease in reserves for extra contractual liability claims. Marine reserves were increased, principally related to pollution exposure from the 1980s and 1990s related to the Navigators Group book of business. Package business reserves were decreased, primarily due to favorable emergence on property claims related to accident years 2016 through 2018 and due to favorable development of allocated loss adjustment expenses on general liability claims for 2017 and prior accident years. Commercial property reserves were decreased, principally due to favorable emergence of reported losses, including on the acquired Navigators Group book of business related to offshore energy in accident years 2017 to 2018 and construction engineering across accident years 2015 to 2018. Professional liability reserves were increased, primarily due to large loss activity, including wrongful termination and discrimination claims, in accident years 2017 and 2018 and increased estimated frequency and severity of directors’ and officers’ reserves on the Navigators Group book of business, principally for the 2014 to 2018 accident years. Automobile liability reserves were decreased in Personal Lines due to the emergence of lower estimated severity in automobile liability for accident year 2017 and were increased in Commercial Lines due to higher estimated severity on national accounts, principally in accident years 2017 and 2018. Catastrophe reserves were reduced, primarily as a result of lower estimated net losses from 2017 hurricanes Harvey and Irma. In September, 2019, PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E”) agreed in principle to an $11 billion settlement with insurers representing approximately 85 percent of insurance subrogation claims to resolve all such claims arising from the 2017 Northern California wildfires and 2018 Camp wildfire. The settlement is subject to approval of the bankruptcy court overseeing PG&E's Chapter 11 bankruptcy filing. The settlement is also subject to the confirmation by the bankruptcy court of a chapter 11 plan of reorganization (a "Plan") which implements the terms of the settlement. If a Plan is approved, certain of the Company’s insurance subsidiaries would be entitled to settlement payments. Based on reserve estimates submitted with the subrogation request, the amount our subsidiaries could collect from PG&E, if any, would be approximately $325 but could be more or less than that amount depending on how the Company’s ultimate paid claims subject to subrogation compare to other insurers’ ultimate paid claims subject to subrogation. Approval of the Plan and amount of the Company’s ultimate subrogation recoveries from PG&E are subject to uncertainty. This includes, among other things, uncertainty regarding liabilities for current or future wildfires caused or allegedly caused by PG&E, the value of recoveries by other creditors and PG&E’s ability to secure funds to pay its creditors. Given the uncertainty, the Company has not recognized a benefit from potential subrogation from PG&E and will evaluate in future periods when more information becomes known. The first $116 of subrogation recoveries would be offset by a $116 reduction in reinsurance recoverables resulting in no net benefit to income. No changes have been made in 2019 to estimated incurred losses from the 2017 or 2018 wildfires. Re-estimates of prior accident year reserves for the nine months ended September 30, 2018 Workers’ compensation reserves were reduced in small commercial and middle market, primarily for accident years 2012 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. Package business reserves were reduced, primarily due to lower reserve estimates for both liability and property for accident years 2010 and prior, including a recovery of loss adjustment expenses for the 2005 accident year. Commercial property reserves were r educed, driven by an increase in estimated reinsurance recoverables on middle market property losses from the 2017 accident year. Professional liability reserves were reduced, principally for accident years 2014 and prior, for directors and officers liability claims principally due to a number of older claims closing with limited or no payment. Automobile liability reserves were reduced, primarily driven by reduced estimates of loss adjustment expenses in small commercial for recent accident years and favorable development in personal automobile liability for accident years 2014 to 2017, principally due to lower severity, including with uninsured and underinsured motorist claims. Homeowners reserves were reduced, primarily in accident years 2013 to 2017, driven by lower than expected severity across multiple perils. Catastrophe reserves were r educed, 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 $133 in the nine months ended September 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. Uncollectible reinsurance reserves were increased due to lower anticipated recoveries related to older accident years. Group Life, Disability and Accident Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses
| For the nine months ended September 30,
| 2019 | 2018
Beginning liabilities for unpaid losses and loss adjustment expenses, gross | $ | 8,445 |  | $ | 8,512 |
Reinsurance recoverables | 239 |  | 209 |
Beginning liabilities for unpaid losses and loss adjustment expenses, net | 8,206 |  | 8,303 |
Aetna U.S. group life and disability business acquisition | — |  | 42 |
Provision for unpaid losses and loss adjustment expenses |  |  |  |
Current incurral year | 3,351 |  | 3,423 |
Prior year's discount accretion | 169 |  | 175 |
Prior incurral year development [1] | (321 | ) | (284 | )
Total provision for unpaid losses and loss adjustment expenses [2] | 3,199 |  | 3,314 |
Payments |  |  |  |
Current incurral year | (1,603 | ) | (1,659 | )
Prior incurral years | (1,743 | ) | (1,741 | )
Total payments | (3,346 | ) | (3,400 | )
Ending liabilities for unpaid losses and loss adjustment expenses, net | 8,059 |  | 8,259 |
Reinsurance recoverables | 231 |  | 241 |
Ending liabilities for unpaid losses and loss adjustment expenses, gross | $ | 8,290 |  | $ | 8,500 |
[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 $130 and $131 for the nine months ended September 30, 2019 and 2018, 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 nine months ended September 30, 2019 Group disability- Prior period reserve estimates decreased by approximately $265 largely driven by group long-term disability claim recoveries higher than prior reserve assumptions and claim incidence lower than prior assumptions. Long-term disability ("LTD") reserve assumptions were also updated based partially on these more recent favorable trends. New York Paid Family Leave also experienced favorable claim emergence and refund compared to year-end estimates. 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 Premium Waiver. Re-estimates of prior incurral years reserves for the nine months ended September 30, 2018 Group disability- Prior period reserve estimates decreased by approximately $195 l argely 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 $85 largely driven by lower-than-previously expected claim incidence inclusive of group life, group life premium waiver, and group accidental death & dismemberment. 9. RESERVE FOR FUTURE POLICY BENEFITS
Changes in Reserves for Future Policy Benefits[1]
Liability balance, as of January 1, 2019 | $ | 642 |
Incurred | 63 |
Paid | (77 | )
Change in unrealized investment gains and losses | 17 |
Liability balance, as of September 30, 2019 | $ | 645 |
Reinsurance recoverable asset, as of January 1, 2019 | $ | 27 |
Incurred | 2 |
Paid | — |
Reinsurance recoverable asset, as of September 30, 2019 | $ | 29 |
Liability balance, as of January 1, 2018 | $ | 713 |
Incurred | 10 |
Paid | (25 | )
Change in unrealized investment gains and losses | (42 | )
Liability balance, as of September 30, 2018 | $ | 656 |
Reinsurance recoverable asset, as of January 1, 2018 | $ | 26 |
Incurred | 10 |
Paid | (1 | )
Reinsurance recoverable asset, as of September 30, 2018 | $ | 35 |
[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.

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- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
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