Loss and Loss Adjustment Expense Reserves

9 Months Ended

Sep. 30, 2024

Loss and Loss Adjustment Expenses Reserves [Abstract]

Loss and Loss Adjustment Expense Reserves

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

Activity in the loss and loss adjustment expense reserves is summarized as follows:

	September 30,
(millions)	2024		2023
Balance at January 1	$	34,389.2	$	30,359.3
Less reinsurance recoverables on unpaid losses	4,789.0		5,559.2
Net balance at January 1	29,600.2		24,800.1
Incurred related to:
Current year	36,276.6		33,035.0
Prior years	(199.4)		1,147.0
Total incurred	36,077.2		34,182.0
Paid related to:
Current year	19,669.0		18,581.3
Prior years	12,492.9		11,764.7
Total paid	32,161.9		30,346.0
Net balance at September 30	33,515.5		28,636.1
Plus reinsurance recoverables on unpaid losses	4,546.0		4,941.2
Balance at September 30	$	38,061.5	$	33,577.3

We experienced favorable reserve development of $199.4 million during the first nine months of 2024, compared to unfavorable development of $1,147.0 million for the same period last year, which is reflected as “incurred related to prior years” in the table above.

Year-to-date September 30, 2024

•The favorable prior year reserve development included approximately $160 million attributable to accident year 2023, $5 million to accident year 2022, and the remainder to accident years 2021 and prior.

•Our personal auto products incurred about $375 million of favorable loss and loss adjustment expense (LAE) reserve development, with about 60% attributable to the Agency auto business and the balance in the Direct auto business. The favorable development was, in part, due to lower than anticipated severity and frequency in Florida and lower than anticipated property damage severity across the majority of states.

•Our Commercial Lines business experienced about $100 million of unfavorable development primarily driven by higher than anticipated severity in our commercial auto business for California, New York, and Texas.

•Our Property business experienced about $75 million of unfavorable development primarily due to higher LAE costs than anticipated.

Year-to-date September 30, 2023

•The unfavorable prior year reserve development included approximately $929 million attributable to accident year 2022, $108 million to accident year 2021, and the remainder to accident years 2020 and prior.

•Our personal auto products incurred about $866 million of unfavorable loss and LAE reserve development, with the Agency and Direct auto businesses each contributing about half. Over half of the unfavorable development was attributable to higher than anticipated severity in auto property and physical damage coverages, while the remaining unfavorable development was primarily due to increased loss costs in Florida injury and medical coverages and, to a lesser extent, higher than anticipated late reported injury claims; partially offset by lower than expected LAE.

•Our Commercial Lines business experienced about $277 million of unfavorable development, primarily driven by higher than anticipated severity and frequency of late reported injury claims, with about half of the unfavorable development attributable to our transportation network company business.