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Reserves for Insurance Losses and Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 2011
Liability for Claims and Claims Adjustment Expense [Abstract]  
Reserves for Insurance Losses and Loss Adjustment Expenses
18.    Reserves for Insurance Losses and Loss Adjustment Expenses
The following table provides a reconciliation of the activity in the reserves for insurance losses and loss adjustment expenses.
Year ended December 31, ($ in millions)
2011
 
2010
 
2009
Balance at beginning of year
$
862

 
$
1,215

 
$
2,895

Reinsurance recoverables
(487
)
 
(670
)
 
(1,660
)
Net balance at beginning of year
375

 
545

 
1,235

Net reserves reclassified from liabilities of discontinued operations held-for-sale (a)
269

 
784

 
—

Net reserves ceded — retroactive reinsurance (b)
—

 
(85
)
 
—

Net reserves sold (c)
(279
)
 
(452
)
 
(82
)
Incurred from continuing operations related to
 
 
 
 
 
Current year
754

 
872

 
968

Prior years (d)
(26
)
 
(52
)
 
22

Total incurred from continuing operations
728

 
820

 
990

Incurred from discontinued operations related to
 
 
 
 
 
Current year
165

 
361

 
1,060

Prior years (e)
(2
)
 
(3
)
 
(7
)
Total incurred from discontinued operations
163

 
358

 
1,053

Paid related to
 
 
 
 
 
Current year
(848
)
 
(1,015
)
 
(1,353
)
Prior years
(118
)
 
(316
)
 
(583
)
Total paid
(966
)
 
(1,331
)
 
(1,936
)
Net reserves reclassified to liabilities of discontinued operations held-for-sale (f)
(17
)
 
(269
)
 
(784
)
Effects of exchange-rate changes
(14
)
 
5

 
69

Net balance at end of year
259

 
375

 
545

Reinsurance recoverables
321

 
487

 
670

Balance at end of year
$
580

 
$
862

 
$
1,215

(a)
Represents the fair value of reserves of discontinued operations held-for-sale at the beginning of the year.
(b)
On November 30, 2010, we entered into a loss portfolio transfer that ceded our losses and loss adjustment expenses related to business underwritten by our international reinsurance agency, which was sold on the same date. The loss portfolio transfer was accounted for as retroactive reinsurance. Retroactive reinsurance balances result from reinsurance placed to cover losses on insured events occurring prior to the inception of a reinsurance contract.
(c)
During 2011, we completed the sale of our U.K. consumer property and casualty insurance business. During 2010 and 2009, we completed sales related to our U.S. consumer property and casualty insurance business.
(d)
Incurred losses and loss adjustment expenses from continuing operations were adjusted as a result of changes in prior year reserve estimates for certain assumed reinsurance coverages, international private passenger automobile coverages, or dealer-related products.
(e)
Incurred losses and loss adjustment expenses from discontinued operations were adjusted as a result of changes in prior year reserve estimates for certain private passenger automobile coverages.
(f)
Reclassification is net of reinsurance recoveries.