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Insurance | 3 Months Ended
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Mar. 31, 2018
Insurance [Abstract] |
Insurance | Insurance Property and Casualty Insurance Reserves The following table provides an analysis of changes in the liability for losses and loss adjustment expenses during the first three months of 2018 and 2017 (in millions):
| Three months ended March 31,
| 2018 |  | 2017
Balance at beginning of year | $ | 9,678 |  |  | $ | 8,563 |
Less reinsurance recoverables, net of allowance | 2,957 |  |  | 2,302 |
Net liability at beginning of year | 6,721 |  |  | 6,261 |
Provision for losses and LAE occurring in the current period | 697 |  |  | 637 |
Net decrease in the provision for claims of prior years | (56 | ) |  | (28 | )
Total losses and LAE incurred | 641 |  |  | 609 |
Payments for losses and LAE of: |  |  |
Current year | (86 | ) |  | (84 | )
Prior years | (554 | ) |  | (470 | )
Total payments | (640 | ) |  | (554 | )
Reserves of business disposed (*) | (319 | ) |  | — |
Foreign currency translation and other | 2 |  |  | 8 |
Net liability at end of period | 6,405 |  |  | 6,324 |
Add back reinsurance recoverables, net of allowance | 2,788 |  |  | 2,297 |
Gross unpaid losses and LAE included in the balance sheet at end of period | $ | 9,193 |  |  | $ | 8,621 |
(*) | Reflects the reinsurance to close transaction at Neon discussed below.
The net decrease in the provision for claims of prior years during the first three months of 2018 reflects (i) lower than expected losses in the crop business (within the Property and transportation sub-segment), (ii) lower than anticipated claim frequency and severity in workers’ compensation business and lower than expected claim severity in the executive liability business (all within the Specialty casualty sub-segment), and (iii) lower than expected claim frequency and severity in the surety business (within the Specialty financial sub-segment). This favorable development was partially offset by higher than expected claim severity and frequency in the targeted markets businesses (within the Specialty casualty sub-segment). The net decrease in the provision for claims of prior years during the first three months of 2017 reflects (i) lower than expected losses in the crop and equine operations and lower than expected claim severity in the property and inland marine business (all within the Property and transportation sub-segment), (ii) lower than anticipated claim severity and frequency in the workers’ compensation businesses and lower than anticipated claim severity at Neon (all within the Specialty casualty sub-segment) and (iii) lower than anticipated claim severity in the fidelity business and lower than expected claim frequency and severity in the surety business (all within the Specialty financial sub-segment). This favorable development was partially offset by (i) higher than expected claim severity in the ocean marine business (within the Property and transportation sub-segment), (ii) higher than anticipated claim severity in the targeted markets businesses and higher than expected claim severity and frequency in the excess and surplus lines business (all within the Specialty casualty sub-segment) and (iii) an adjustment to the deferred gain on the retroactive reinsurance transaction entered into in connection with the sale of businesses in 1998 (included in Other specialty sub-segment). In December 2017, the Neon Lloyd’s syndicate entered into a reinsurance to close transaction for the 2015 and prior years of account with StarStone Underwriting Limited, a subsidiary of Enstar Group Limited, which was effective as of December 31, 2017 (the transaction settled in early 2018). In the Lloyd’s market, a reinsurance to close transaction transfers the responsibility for discharging all of the liabilities that attach to the transferred year of account plus the right to any income due to the closing year of account in return for a premium. This transaction provided Neon with finality on its legacy business.

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- Definition The entire disclosure for the types of coverages and products sold, and the assets, obligations, recorded liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI http://asc.fasb.org/topic&trid=2303980 + Details
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