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Claim and Claim Adjustment Expense Reserves | 6 Months Ended
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Jun. 30, 2013
Insurance Loss Reserves [Abstract] |
Claim and Claim Adjustment Expense Reserves | Note F. Claim and Claim Adjustment Expense Reserves The Company's property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including IBNR claims as of the reporting date. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's experience with similar cases and various historical development patterns. Consideration is given to such historical patterns as field reserving trends and claims settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions, economic conditions including inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves. Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can all affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers' compensation, general liability and professional liability claims. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the Company's ultimate cost for insurance losses will not exceed current estimates. Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in the Company's results of operations and/or equity. The Company reported catastrophe losses, net of reinsurance, of $65 million and $104 million for the three and six months ended June 30, 2013. Catastrophe losses in 2013 related primarily to U.S. storms. The Company reported catastrophe losses, net of reinsurance, of $68 million and $96 million for the three and six months ended June 30, 2012. Net Prior Year Development The following tables and discussion include the net prior year development recorded for CNA Specialty, CNA Commercial, Hardy and Corporate & Other Non-Core segments. Net Prior Year Development
Three months ended June 30, 2013 |  |  |  |  |  |  |  |  |
(In millions) | CNA Specialty |  | CNA Commercial |  | Hardy |  | Corporate & Other Non-Core |  | Total
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | (41 | ) |  | $ | 27 |  |  | $ | 12 |  |  | $ | (3 | ) |  | $ | (5 | )
Pretax (favorable) unfavorable premium development | (5 | ) |  | (5 | ) |  | 2 |  |  | — |  |  | (8 | )
Total pretax (favorable) unfavorable net prior year development | $ | (46 | ) |  | $ | 22 |  |  | $ | 14 |  |  | $ | (3 | ) |  | $ | (13 | )
Three months ended June 30, 2012 |  |  |  |  |  |  |
(In millions) | CNA Specialty |  | CNA Commercial |  | Corporate & Other Non-Core |  | Total
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | (35 | ) |  | $ | (13 | ) |  | $ | (4 | ) |  | $ | (52 | )
Pretax (favorable) unfavorable premium development | (5 | ) |  | (19 | ) |  | 1 |  |  | (23 | )
Total pretax (favorable) unfavorable net prior year development | $ | (40 | ) |  | $ | (32 | ) |  | $ | (3 | ) |  | $ | (75 | )
Six months ended June 30, 2013 |  |  |  |  |  |  |  |  |
(In millions) | CNA Specialty |  | CNA Commercial |  | Hardy |  | Corporate & Other Non-Core |  | Total
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | (56 | ) |  | $ | 16 |  |  | $ | 11 |  |  | $ | (2 | ) |  | $ | (31 | )
Pretax (favorable) unfavorable premium development | (13 | ) |  | (15 | ) |  | 6 |  |  | 1 |  |  | (21 | )
Total pretax (favorable) unfavorable net prior year development | $ | (69 | ) |  | $ | 1 |  |  | $ | 17 |  |  | $ | (1 | ) |  | $ | (52 | )
Six months ended June 30, 2012 |  |  |  |  |  |  |
(In millions) | CNA Specialty |  | CNA Commercial |  | Corporate & Other Non-Core |  | Total
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | (41 | ) |  | $ | (27 | ) |  | $ | (2 | ) |  | $ | (70 | )
Pretax (favorable) unfavorable premium development | (14 | ) |  | (36 | ) |  | 2 |  |  | (48 | )
Total pretax (favorable) unfavorable net prior year development | $ | (55 | ) |  | $ | (63 | ) |  | $ | — |  |  | $ | (118 | )
For the three and six months ended June 30, 2012, favorable premium development was recorded for CNA Commercial primarily due to premium adjustments on auditable policies arising from increased exposures. CNA Specialty The following table provides further detail of the net prior year claim and allocated claim adjustment expense reserve development (development) recorded for the CNA Specialty segment for the three and six months ended June 30, 2013 and 2012.
Periods ended June 30 | Three Months |  | Six Months
(In millions) | 2013 |  | 2012 |  | 2013 |  | 2012
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development: |  |  |  |  |  |  |
Medical Professional Liability | $ | (17 | ) |  | $ | (9 | ) |  | $ | (20 | ) |  | $ | (15 | )
Other Professional Liability | (23 | ) |  | (6 | ) |  | (24 | ) |  | (2 | )
Surety | 1 |  |  | — |  |  | 2 |  |  | 1 |
Warranty | — |  |  | — |  |  | — |  |  | (1 | )
Other | (2 | ) |  | (20 | ) |  | (14 | ) |  | (24 | )
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | (41 | ) |  | $ | (35 | ) |  | $ | (56 | ) |  | $ | (41 | )
Three Month Comparison 2013 Favorable development for medical professional liability was primarily due to a decrease in incurred loss severity in accident years 2009 and prior. Overall, favorable development for other professional liability was related to better than expected loss emergence in accident years 2007 through 2009. Unfavorable development was recorded in accident years 2010 through 2012 related to an increase in severity. 2012 Favorable development for medical professional liability was primarily due to a decrease in incurred loss severity in accident years 2008 through 2010. Other includes standard property and casualty coverages provided to CNA Specialty customers. Favorable development for other coverages was primarily due to favorable loss emergence in property and workers' compensation coverages in accident years 2005 and subsequent. Six Month Comparison 2013 Overall, favorable development for medical professional liability reflects favorable experience in accident years 2009 and prior. Unfavorable development was recorded for accident years 2010 and 2011 due to higher than expected large loss activity. Overall, favorable development for other professional liability was related to better than expected loss emergence in accident years 2007 through 2009. Unfavorable development was recorded in accident years 2010 through 2012 related to an increase in severity. Favorable development for other coverages was primarily due to better than expected loss emergence in property coverages in accident years 2010 and subsequent. 2012 Favorable development for medical professional liability was primarily due to a decrease in incurred loss severity in accident years 2008 through 2010 and reductions in the estimated frequency of large losses in accident years 2008 and prior. Favorable development for other coverages was primarily due to favorable loss emergence in property and workers' compensation coverages in accident years 2005 and subsequent. CNA Commercial The following table provides further detail of the development recorded for the CNA Commercial segment for the three and six months ended June 30, 2013 and 2012.
Periods ended June 30 | Three Months |  | Six Months
(In millions) | 2013 |  | 2012 |  | 2013 |  | 2012
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development: |  |  |  |  |  |  |
Commercial Auto | $ | 2 |  |  | $ | 2 |  |  | $ | (3 | ) |  | $ | 2 |
General Liability | 15 |  |  | (13 | ) |  | (6 | ) |  | (5 | )
Workers' Compensation | 45 |  |  | 8 |  |  | 70 |  |  | (11 | )
Property and Other | (35 | ) |  | (10 | ) |  | (45 | ) |  | (13 | )
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | 27 |  |  | $ | (13 | ) |  | $ | 16 |  |  | $ | (27 | )
Three Month Comparison 2013 Unfavorable development for general liability coverages was primarily related to increased incurred loss severity in accident years 2010 through 2012. Unfavorable development for workers' compensation was primarily in response to legislation enacted during 2013 related to the New York Fund for Reopened Cases. The law change necessitated an increase in reserves as re-opened workers' compensation claims can no longer be turned over to the state for handling and payment after December 31, 2013. Favorable development for property and other coverages was primarily related to favorable outcomes on litigated catastrophe claims in accident years 2005 and 2010 and favorable loss emergence on non-catastrophe losses in accident year 2012. 2012 Favorable development for general liability coverages was primarily related to favorable loss emergence in accident years 2005 and prior. Favorable development for property and marine coverages was due to a favorable outcome on an individual claim in accident year 2005 and favorable loss emergence in non-catastrophe losses in accident year 2010. Six Month Comparison 2013 Overall, favorable development for general liability coverages was primarily related to better than expected loss emergence in accident years 2002 and prior. Unfavorable development was recorded in accident years 2010 through 2012 primarily related to increased incurred loss severity. Unfavorable development for workers' compensation was recorded in response to legislation in New York as discussed above. Additional unfavorable development was primarily due to higher than expected large losses and increased severity in the state of California in accident year 2010. Favorable development for property and other coverages was primarily related to favorable outcomes on litigated catastrophe claims in accident years 2005 and 2010 and favorable loss emergence on non-catastrophe losses in accident year 2012. 2012 Overall, favorable development for workers' compensation reflects favorable experience in accident years 2001 and prior. Unfavorable development was recorded in accident year 2010 related to increased medical severity and in accident year 2011 related to favorable premium development. Favorable development for property and marine coverages was due to a favorable outcome on an individual claim in accident year 2005 and favorable loss emergence in non-catastrophe losses in accident year 2010. Hardy The following table provides further detail of the development recorded for the Hardy segment for the three and six months ended June 30, 2013.
Periods ended June 30, 2013 |  |  |
(In millions) | Three Months |  | Six Months
Pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development: |  |  |
Marine and Aviation | $ | 4 |  |  | $ | 3 |
Non-Marine Property | 7 |  |  | 7 |
Property Treaty | 2 |  |  | 2 |
Specialty | (1 | ) |  | (1 | )
Total pretax (favorable) unfavorable net prior year claim and allocated claim adjustment expense reserve development | $ | 12 |  |  | $ | 11 |
Three and Six Months 2013 Unfavorable development for non-marine property was primarily due to 2011 catastrophe events, including the Thailand floods and the New Zealand Lyttelton earthquake.

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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/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 94-5 -Paragraph 11 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 13 -Article 7 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 60 -Paragraph 60 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6482852&loc=d3e14931-158439 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6482485&loc=d3e14764-158437 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6482485&loc=d3e14754-158437 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03.13(a)(1),(b)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 + Details
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