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Property and Casualty Insurance Reserves | 12 Months Ended
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Dec. 31, 2020
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] |
Property and Casualty Insurance Reserves | NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES The Company’s Property and Casualty Insurance Reserves are reported using the Company’s estimate of its ultimate liability for losses and LAE for claims that occurred prior to the end of any given accounting period but have not yet been paid. Such estimates are based on individual case estimates for reported claims and estimates for IBNR losses, including expected development on reported claims. The determination of individual case reserves differs by line of business. For personal automobile insurance and commercial automobile insurance, case reserves are set primarily using statistical reserves that are based on studies of historical average paid amounts by state, coverage and product. However, when such reserves exceed certain thresholds they are set manually by adjusters. For preferred homeowners insurance and other personal insurance, case reserves are set by adjusters and are based on the adjusters’ estimates of the amount for which the claims will ultimately be paid. The Company’s actuaries estimate ultimate losses and LAE and, therefore, reserves at least quarterly for most product lines and/or coverage levels using accident quarters or years spanning 10 or more years, depending on the size of the product line NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) and/or coverage level or emerging issues relating to them. The Company’s actuaries use a variety of generally accepted actuarial loss reserving estimation methodologies to estimate the ultimate losses and LAE for the current accident quarter or year and re-estimate the ultimate losses and LAE for previous accident quarters or years to determine if changes in the previous estimates of the ultimate losses and LAE are indicated by the most recent data. The key assumption in these estimation methodologies is that patterns observed in prior periods are indicative of how losses and LAE are expected to develop in the future and that such historical data can be used to predict and estimate ultimate losses and LAE. However, changes in the Company’s business processes, by their very nature, are likely to affect the development patterns, which generally results in the historical development factors becoming less reliable over time in predicting how losses and LAE will ultimately develop. The Company’s actuaries use professional judgment in determining how much weight to place on the development patterns based on the older historical data and how much weight to place on the development patterns based on more recent data. In some cases, the Company’s actuaries make adjustments to the loss reserving estimation methodologies to estimate ultimate losses and LAE. The Company’s actuaries’ quarterly or yearly selections are summed by product and/or coverage levels to create the actuarial indication of the ultimate losses and LAE. Paid amounts are then subtracted from the ultimates to compute the reserves for property and casualty insurance losses and LAE. These results are reviewed by the Company’s chief actuary and corporate management who apply their collective judgment and determine the appropriate estimated level of reserves to record. Numerous factors are considered in this determination process, including, but not limited to, the assessed reliability of key loss trends and assumptions that may be significantly influencing the current actuarial indications, changes in claim handling practices or other changes that affect the timing of payment or development patterns, changes in the mix of business, the maturity of the accident year, pertinent trends observed over the recent past, the level of volatility within a particular line of business, the improvement or deterioration of actuarial indications in the current period as compared to prior periods, and the amount of reserves related to third party pools for which the Company has limited access to the underlying data and, accordingly, relies on calculations provided by such pools. The Company’s goal is to ensure that its total reserves for property and casualty insurance losses and LAE are adequate to cover all costs, while sustaining minimal variation from the time reserves for losses and LAE are initially estimated until losses and LAE are fully developed. Changes in the Company’s estimates of these losses and LAE over time, also referred to as “development,” will occur and may be material. The following tables contain information about incurred and paid claims development as of and for the year ended December 31, 2020, net of reinsurance and indemnification, as well as cumulative claim frequency and the total of IBNR liabilities, including expected development on reported claims included within the net incurred losses and allocated LAE amounts. The tables are grouped by major product line and, if relevant, coverage. The information about incurred and paid claims development for the years ended December 31, 2016 through 2019 is presented as supplementary information and is unaudited. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Specialty Personal Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 969.4 |  |  | $ | 1,021.6 |  |  | $ | 1,027.2 |  |  | $ | 1,026.0 |  |  | $ | 1,022.7 |  |  | $ | 4.7 |  |  | 417,219 |
2017 |  | 997.7 |  |  | 999.9 |  |  | 1,004.5 |  |  | 999.1 |  |  | 13.7 |  |  | 397,059 |
2018 |  | 1,128.1 |  |  | 1,119.1 |  |  | 1,120.0 |  |  | 33.9 |  |  | 447,610 |
2019 |  | 1,270.7 |  |  | 1,306.9 |  |  | 91.4 |  |  | 485,455 |
2020 |  | 1,219.3 |  |  | 368.6 |  |  | 399,216 |
Total |  | $ | 5,668.0 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 459.7 |  |  | $ | 831.1 |  |  | $ | 943.4 |  |  | $ | 987.7 |  |  | $ | 1,008.3 |  |  |  |  |
2017 |  | 441.9 |  |  | 808.6 |  |  | 926.7 |  |  | 967.7 |  |  |  |  |
2018 |  | 467.5 |  |  | 903.8 |  |  | 1,039.3 |  |  |  |  |
2019 |  | 497.2 |  |  | 1,052.5 |  |  |  |  |
2020 |  | 491.6 |  |  |  |  |
Total |  | 4,559.4 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 3.9 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 1,112.5 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Specialty Personal Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 462.2 |  |  | $ | 456.9 |  |  | $ | 456.9 |  |  | $ | 457.0 |  |  | $ | 457.4 |  |  | $ | (0.1) |  |  | 246,239 |
2017 |  | 475.6 |  |  | 465.6 |  |  | 465.1 |  |  | 465.6 |  |  | 0.1 |  |  | 251,935 |
2018 |  | 504.9 |  |  | 496.9 |  |  | 496.4 |  |  | (0.4) |  |  | 270,000 |
2019 |  | 574.7 |  |  | 581.0 |  |  | (10.7) |  |  | 286,954 |
2020 |  | 600.2 |  |  | 52.0 |  |  | 252,237 |
Total |  | 2,600.6 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 436.4 |  |  | $ | 460.2 |  |  | $ | 458.0 |  |  | $ | 457.5 |  |  | $ | 457.5 |  |  |  |  |
2017 |  | 443.0 |  |  | 468.7 |  |  | 466.0 |  |  | 465.9 |  |  |  |  |
2018 |  | 463.6 |  |  | 501.5 |  |  | 497.4 |  |  |  |  |
2019 |  | 525.8 |  |  | 585.7 |  |  |  |  |
2020 |  | 542.2 |  |  |  |  |
Total |  | 2,548.7 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 1.6 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 53.5 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Commercial Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 120.5 |  |  | $ | 112.4 |  |  | $ | 115.6 |  |  | $ | 117.7 |  |  | $ | 115.6 |  |  | $ | 1.1 |  |  | 20,427 |
2017 |  | 120.5 |  |  | 120.0 |  |  | 118.3 |  |  | 114.3 |  |  | 2.9 |  |  | 19,951 |
2018 |  | 123.2 |  |  | 116.5 |  |  | 113.0 |  |  | 12.6 |  |  | 20,146 |
2019 |  | 128.4 |  |  | 126.1 |  |  | 19.4 |  |  | 19,404 |
2020 |  | 140.5 |  |  | 60.5 |  |  | 16,457 |
Total |  | $ | 609.5 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 36.2 |  |  | $ | 71.6 |  |  | $ | 89.7 |  |  | $ | 102.3 |  |  | $ | 109.7 |  |  |  |  |
2017 |  | 36.3 |  |  | 72.3 |  |  | 90.7 |  |  | 101.7 |  |  |  |  |
2018 |  | 36.8 |  |  | 68.8 |  |  | 88.1 |  |  |  |  |
2019 |  | 32.4 |  |  | 75.7 |  |  |  |  |
2020 |  | 37.0 |  |  |  |  |
Total |  | 412.2 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 11.8 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 209.1 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Commercial Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 24.2 |  |  | $ | 24.2 |  |  | $ | 24.1 |  |  | $ | 24.2 |  |  | $ | 24.2 |  |  | $ | — |  |  | 10,561 |
2017 |  | 24.2 |  |  | 23.5 |  |  | 23.5 |  |  | 23.4 |  |  | 0.1 |  |  | 9,792 |
2018 |  | 23.6 |  |  | 23.5 |  |  | 23.6 |  |  | 0.1 |  |  | 9,567 |
2019 |  | 26.0 |  |  | 27.1 |  |  | (0.3) |  |  | 9,290 |
2020 |  | 31.9 |  |  | 4.6 |  |  | 10,936 |
Total |  | $ | 130.2 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 22.4 |  |  | $ | 24.2 |  |  | $ | 24.1 |  |  | $ | 24.2 |  |  | $ | 24.2 |  |  |  |  |
2017 |  | 22.2 |  |  | 23.5 |  |  | 23.4 |  |  | 23.4 |  |  |  |  |
2018 |  | 21.7 |  |  | 23.6 |  |  | 23.6 |  |  |  |  |
2019 |  | 23.0 |  |  | 26.9 |  |  |  |  |
2020 |  | 26.2 |  |  |  |  |
Total |  | 124.3 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 0.4 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 6.3 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Preferred Personal Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 162.1 |  |  | $ | 174.5 |  |  | $ | 179.1 |  |  | $ | 176.8 |  |  | $ | 177.2 |  |  | $ | 1.6 |  |  | 36,766 |
2017 |  | 164.4 |  |  | 157.8 |  |  | 155.8 |  |  | 158.2 |  |  | 1.9 |  |  | 33,731 |
2018 |  | 157.6 |  |  | 156.3 |  |  | 161.7 |  |  | 6.1 |  |  | 32,246 |
2019 |  | 172.2 |  |  | 195.5 |  |  | 20.0 |  |  | 35,891 |
2020 |  | 148.9 |  |  | 45.8 |  |  | 23,543 |
Total |  | $ | 841.5 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 61.2 |  |  | $ | 114.6 |  |  | $ | 145.6 |  |  | $ | 161.1 |  |  | $ | 169.3 |  |  |  |  |
2017 |  | 59.2 |  |  | 108.9 |  |  | 134.1 |  |  | 143.2 |  |  |  |  |
2018 |  | 55.5 |  |  | 107.6 |  |  | 132.7 |  |  |  |  |
2019 |  | 62.7 |  |  | 127.9 |  |  |  |  |
2020 |  | 44.4 |  |  |  |  |
Total |  | 617.5 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 8.6 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 232.6 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Preferred Personal Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 106.6 |  |  | $ | 106.6 |  |  | $ | 106.3 |  |  | $ | 106.2 |  |  | $ | 106.2 |  |  | $ | — |  |  | 65,191 |
2017 |  | 109.2 |  |  | 105.8 |  |  | 105.2 |  |  | 105.1 |  |  | — |  |  | 62,385 |
2018 |  | 113.9 |  |  | 111.0 |  |  | 110.4 |  |  | (0.1) |  |  | 60,707 |
2019 |  | 126.4 |  |  | 125.8 |  |  | (0.7) |  |  | 63,776 |
2020 |  | 96.1 |  |  | (0.7) |  |  | 43,539 |
Total |  | $ | 543.6 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 105.2 |  |  | $ | 106.9 |  |  | $ | 106.3 |  |  | $ | 106.3 |  |  | $ | 106.2 |  |  |  |  |
2017 |  | 104.4 |  |  | 106.1 |  |  | 105.2 |  |  | 105.1 |  |  |  |  |
2018 |  | 107.2 |  |  | 111.4 |  |  | 110.4 |  |  |  |  |
2019 |  | 120.7 |  |  | 126.5 |  |  |  |  |
2020 |  | 90.9 |  |  |  |  |
Total |  | 539.1 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | (0.1) |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 4.4 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Homeowners Insurance
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE REPORTED CLAIMS |  | As of December 31, 2020
|  | Cumulative Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |
2016 |  | $ | 200.3 |  |  | $ | 201.7 |  |  | $ | 204.2 |  |  | $ | 202.2 |  |  | $ | 201.1 |  |  | $ | 0.3 |  |  | 20,019 |
2017 |  | 261.2 |  |  | 259.5 |  |  | 245.2 |  |  | 243.8 |  |  | 0.6 |  |  | 20,796 |
2018 |  | 185.9 |  |  | 183.0 |  |  | 183.6 |  |  | 3.0 |  |  | 17,104 |
2019 |  | 162.9 |  |  | 161.8 |  |  | 4.1 |  |  | 15,311 |
2020 |  | 157.0 |  |  | 17.5 |  |  | 12,529 |
Total |  | $ | 947.3 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  |  |  |
2016 |  | $ | 141.2 |  |  | $ | 190.1 |  |  | $ | 195.8 |  |  | $ | 198.9 |  |  | $ | 199.5 |  |  |  |  |
2017 |  | 165.8 |  |  | 242.5 |  |  | 235.7 |  |  | 239.5 |  |  |  |  |
2018 |  | 127.4 |  |  | 180.2 |  |  | 180.0 |  |  |  |  |
2019 |  | 111.1 |  |  | 150.4 |  |  |  |  |
2020 |  | 94.6 |  |  |  |  |
Total |  | 864.0 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2016, Net of Reinsurance |  | 5.1 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 88.4 |  |  |  |  |
The claim counts in the preceding tables are cumulative reported claim counts as of December 31, 2020 and are equal to the sum of cumulative open and cumulative closed claims, including claims closed without payment. Certain product lines, particularly the Company’s specialty personal automobile insurance, tend to have a higher percentage of claims closed without payment. The Company's claims associated with automobile insurance are counted at the feature level. As such, each claimant and each coverage is counted separately. For example, if for one occurrence, the Company's policyholder is at fault for damage to his/her own vehicle, another party's vehicle and three injured parties, there may be five features—three for bodily injury liability, one for property damage liability and one for first-party collision coverage. There may also be another feature for first-party medical payments. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) The following table reconciles the net incurred and paid claims development tables presented above to the Company's liability for Property and Casualty Insurance Reserves included in the Consolidated Balance Sheet at December 31, 2020.
DOLLARS IN MILLIONS |  | 2020
Property and Casualty Insurance Reserves, Net of Reinsurance: |  |
Specialty Personal Automobile Insurance—Liability |  | $ | 1,112.5 |
Specialty Personal Automobile Insurance—Physical Damage |  | 53.5 |
Commercial Automobile Insurance—Liability |  | 209.1 |
Commercial Automobile Insurance—Physical Damage |  | 6.3 |
Preferred Personal Automobile Insurance—Liability |  | 232.6 |
Preferred Personal Automobile Insurance—Physical Damage |  | 4.4 |
Homeowners Insurance |  | 88.4 |
Other |  | 49.9 |
Total |  | $ | 1,756.7 |
Reinsurance Recoverables on Unpaid Losses and Allocated LAE: |  |
Specialty Personal Automobile Insurance—Liability |  | $ | 9.3 |
Commercial Automobile Insurance—Liability |  | 5.8 |
Preferred Personal Automobile Insurance—Liability |  | 23.2 |
Homeowners Insurance |  | 7.6 |
Other |  | 4.2 |
Total |  | 50.1 |
Unallocated LAE |  | 175.7 |
Property and Casualty Insurance Reserves, Gross of Reinsurance |  | $ | 1,982.5 |
The following is supplementary information about average historical claims duration as of December 31, 2020.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years |  | 1 |  | 2 |  | 3 |  | 4 |  | 5
Specialty Personal Automobile Insurance—Liability |  | 41.9 | % |  | 80.9 | % |  | 92.6 | % |  | 96.7 | % |  | 98.6 | %
Specialty Personal Automobile Insurance—Physical Damage |  | 93.0 | % |  | 100.8 | % |  | 100.1 | % |  | 100.0 | % |  | 100.0 | %
Commercial Automobile Insurance—Liability |  | 29.5 | % |  | 61.5 | % |  | 78.3 | % |  | 88.7 | % |  | 94.9 | %
Commercial Automobile Insurance—Physical Damage |  | 89.3 | % |  | 99.9 | % |  | 99.9 | % |  | 100.0 | % |  | 100.0 | %
Preferred Personal Automobile Insurance—Liability |  | 33.6 | % |  | 66.4 | % |  | 83.0 | % |  | 90.7 | % |  | 95.5 | %
Preferred Personal Automobile Insurance—Physical Damage |  | 97.2 | % |  | 100.8 | % |  | 100.1 | % |  | 100.0 | % |  | 100.0 | %
Homeowners Insurance |  | 67.3 | % |  | 96.3 | % |  | 97.4 | % |  | 98.6 | % |  | 99.2 | %
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Property and Casualty Insurance Reserve activity for the years ended December 31, 2020, 2019 and 2018 was:
DOLLARS IN MILLIONS |  | 2020 |  | 2019 |  | 2018
Beginning Property and Casualty Insurance Reserves: |  |  |  |  |  |
Gross of Reinsurance at Beginning of Year |  | $ | 1,969.8 |  |  | $ | 1,874.9 |  |  | $ | 1,016.8 |
Less Reinsurance Recoverables at Beginning of Year |  | 65.6 |  |  | 101.9 |  |  | 53.1 |
Property and Casualty Insurance Reserves, Net of Reinsurance at Beginning of Year |  | 1,904.2 |  |  | 1,773.0 |  |  | 963.7 |
Property and Casualty Insurance Reserves Acquired, Net of Reinsurance |  | — |  |  | 3.6 |  |  | 695.1 |
Incurred Losses and LAE related to: |  |  |  |  |  |
Current Year |  | 2,873.6 |  |  | 2,879.5 |  |  | 2,093.4 |
Prior Years |  | 36.4 |  |  | (71.1) |  |  | (7.4) |
Total Incurred Losses and LAE |  | 2,910.0 |  |  | 2,808.4 |  |  | 2,086.0 |
Paid Losses and LAE related to: |  |  |  |  |  |
Current Year: |  | 1,679.1 |  |  | 1,682.1 |  |  | 1,300.8 |
Prior Years |  | 1,202.7 |  |  | 998.7 |  |  | 671.0 |
Total Paid Losses and LAE |  | 2,881.8 |  |  | 2,680.8 |  |  | 1,971.8 |
Property and Casualty Insurance Reserves, Net of Reinsurance at End of Year |  | 1,932.4 |  |  | 1,904.2 |  |  | 1,773.0 |
Plus Reinsurance Recoverables at End of Year |  | 50.1 |  |  | 65.6 |  |  | 101.9 |
Property and Casualty Insurance Reserves, Gross of Reinsurance at End of Year |  | $ | 1,982.5 |  |  | $ | 1,969.8 |  |  | $ | 1,874.9 |
Property and Casualty Insurance Reserves are estimated based on historical experience patterns and current economic trends. Actual loss experience and loss trends are likely to differ from these historical experience patterns and economic conditions. Loss experience and loss trends emerge over several years from the dates of loss inception. The Company monitors such emerging loss trends on a quarterly basis. Changes in such estimates are included in the Consolidated Statements of Income in the period of change. In 2020, the Company increased its property and casualty insurance reserves by $36.4 million to recognize adverse development of loss and LAE reserves from prior accident years. Specialty Personal Automobile insurance loss and LAE reserves developed adversely by $28.2 million due primarily to the emergence of less favorable loss patterns than expected for both liability and physical damage insurance. Specialty Commercial Automobile insurance loss and LAE reserves included favorable development of $12.9 million due primarily to the emergence of more favorable loss patterns than expected for liability insurance. Preferred Personal Automobile insurance loss and LAE reserves developed adversely by $26.7 million due primarily to the emergence of less favorable loss patterns than expected for liability insurance. Homeowners insurance loss and LAE reserves developed favorably by $2.1 million due primarily to the emergence of more favorable loss patterns than expected. Other personal lines loss and LAE reserves developed favorably by $3.5 million due primarily to the emergence of more favorable loss patterns than expected for prior accident years. In 2019, the Company decreased its property and casualty insurance reserves by $71.1 million to recognize favorable development of loss and LAE reserves from prior accident years. Specialty Personal Automobile insurance loss and LAE reserves developed favorably by $23.8 million due primarily to the emergence of more favorable loss patterns than expected for both liability and physical damage insurance for the 2018 accident year. Commercial lines insurance loss and LAE reserves included favorable development of $12.9 million due primarily to the emergence of more favorable loss patterns than expected for commercial automobile liability insurance for 2018 and 2017 accident years. Preferred Personal Automobile insurance loss and LAE reserves developed favorably by $8.2 million due primarily to the emergence of more favorable loss patterns than expected for liability insurance for several prior accident years and for physical damage insurance for 2018 accident year. Homeowners insurance loss and LAE reserves developed favorably by $19.7 million due primarily to the net reinsurance impact from the sale of subrogation rights related to the 2017 and 2018 California Wildfires. Other personal lines loss and LAE reserves developed favorably by $6.5 million due primarily to the emergence of more favorable loss patterns than expected for prior accident years. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) In 2018, the Company increased its property and casualty insurance reserves by $7.4 million to recognize favorable development of loss and LAE reserves from prior accident years. Specialty Personal Automobile insurance loss and LAE reserves developed adversely by $5.5 million due primarily to the emergence of loss patterns that were worse than expected for both physical damage and liability insurance for the 2017 accident year, partially offset by the emergence of loss patterns that were better than expected for 2016 and prior accident years. Commercial lines insurance loss and LAE reserves developed favorably by $6.1 million. Preferred Personal automobile insurance loss and LAE reserves developed favorable by $5.8 million due primarily to the emergence of loss patterns that were better than expected for both physical damage and liability insurance for the 2017 accident year and, to a lesser extent, for liability insurance for the 2015 and prior accident years, partially offset by the emergence of loss patterns that was worse than expected for the 2016 accident year. Homeowners insurance loss and LAE reserves developed adversely by $3.2 million due primarily to the emergence of non-catastrophe loss patterns that were worse than expected for the 2016 accident year. Other personal lines loss and LAE reserves developed favorably by $4.3 million due primarily to the emergence of more favorable loss patterns than expected for prior accident years. The Company cannot predict whether loss and LAE reserves will develop favorably or unfavorably from the amounts reported in the Consolidated Financial Statements. The Company believes that any such development will not have a material effect on the Company’s consolidated financial position, but could have a material effect on the Company’s consolidated financial results for a given period. Reinsurance recoverables on property and casualty insurance reserves were $50.1 million and $65.6 million at December 31, 2020 and 2019, respectively. These recoverables are concentrated with several reinsurers, the majority of which are highly rated by one or more of the principal investor and/or insurance company rating agencies. While most of these recoverables were unsecured at December 31, 2020 and 2019, the agreements with the reinsurers generally provide for some form of collateralization upon the occurrence of certain events Receivables from Policyholders - Allowance for Expected Credit Losses The following table presents receivables from policyholders, net of the allowance for expected credit losses including a rollforward of changes in the allowance for expected credit losses for the year ended December 31, 2020.
(Dollars in Millions) |  | Receivables from Policyholders, Net of Allowance for Expected Credit Losses |  | Allowance for Expected Credit Losses
Balance at Beginning of Year |  | $ | 1,117.1 |  |  | $ | 22.3 |
Provision for Expected Credit Losses |  |  |  | 45.5 |
Write-offs of Uncollectible Receivables from Policyholders |  |  |  | (46.9) |
Balance at End of Period |  | $ | 1,194.5 |  |  | $ | 20.9 |

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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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