Insurance

3 Months Ended

Mar. 31, 2023

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 2023 and 2022 (in millions):


	Three months ended March 31,
	2023		2022
Balance at beginning of year	$	11,974	$	11,074
Less reinsurance recoverables, net of allowance	3,767		3,419
Net liability at beginning of year	8,207		7,655
Provision for losses and LAE occurring in the current period	883		781


Net decrease in the provision for claims of prior years	(63)		(88)
Total losses and LAE incurred	820		693
Payments for losses and LAE of:
Current year	(66)		(67)
Prior years	(815)		(647)
Total payments	(881)		(714)
Foreign currency translation and other	1		—
Net liability at end of period	8,147		7,634
Add back reinsurance recoverables, net of allowance	3,614		3,352
Gross unpaid losses and LAE included in the balance sheet at end of period	$	11,761	$	10,986

The net decrease in the provision for claims of prior years during the first three months of 2023 reflects (i) lower than anticipated losses in the crop business, lower than expected claim frequency and severity in the trucking business and lower than anticipated claim frequency in the property and inland marine business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses and lower than expected claim frequency in the executive liability, excess and surplus and environmental businesses (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency in the surety and trade credit businesses (within the Specialty financial sub-segment). This favorable development was partially offset by (i) higher than anticipated claim severity in the public sector and excess liability businesses (within the Specialty casualty sub-segment) and (ii) net adverse development associated with AFG’s internal reinsurance program (within Other specialty).

The net decrease in the provision for claims of prior years during the first three months of 2022 reflects (i) lower than anticipated losses in the crop business, lower than expected claim frequency in the trucking and ocean marine businesses and at the Singapore branch and lower than anticipated claim severity in the property and inland marine business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses, lower than expected claim frequency in the executive liability business and lower than anticipated claim frequency and severity in the excess and surplus business (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency in the surety, trade credit and financial institutions businesses (within the Specialty financial sub-segment). This favorable development was partially offset by (i) higher than anticipated claim severity in the targeted markets businesses (within the Specialty casualty sub-segment) and (ii) net adverse development associated with AFG’s internal reinsurance program (within Other specialty).

Recoverables from Reinsurers and Premiums Receivable Progressions of the 2023 and 2022 allowance for expected credit losses on recoverables from reinsurers and premiums receivable are shown below (in millions):


	Recoverables from Reinsurers				Premiums Receivable
	2023		2022		2023		2022





Balance at January 1	$	8	$	8	$	8	$	8
Provision (credit) for expected credit losses	1		(1)		—		(1)
Write-offs charged against the allowance	—		—		—		—
Balance at March 31	$	9	$	7	$	8	$	7