Losses and Loss Expenses Payable Losses and Loss Expenses Payable

3 Months Ended

Mar. 31, 2020

Losses and Loss Expenses Payable [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

. Losses and Loss Expenses Payable

The following table sets forth the activity in the liability for losses and loss expenses for the three months ended March 31, 2020 and 2019:

($ millions)	2020			2019
Losses and loss expenses payable, at beginning of period	$	1,066.5		$	1,146.8
Less: reinsurance recoverable on losses and loss expenses payable	13.6			5.5
Net balance at beginning of period	1,052.9			1,141.3
Incurred related to:
Current year	246.9			215.7
Prior years	(7.5		)	(21.4		)
Total incurred	239.4			194.3
Paid related to:
Current year	74.1			59.3
Prior years	171.3			152.0
Total paid	245.4			211.3
Net balance at end of period	1,046.9			1,124.3
Plus: reinsurance recoverable on losses and loss expenses payable	39.7			4.6
Losses and loss expenses payable, at end of period	$	1,086.6		$	1,128.9

The Company recorded less favorable development related to prior years’ loss and loss expense reserves for the three months ended March 31, 2020, of $7.5 million compared to $21.4 million for the same 2019 period. Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the three months ended March 31, 2020 was $10.5 million, due to favorable development in the commercial insurance segment. In the commercial insurance segment, all products developed favorably, with small commercial package, middle market commercial, and workers' compensation contributing $5.4 million, $5.1 million, and $4.0 million, respectively. Somewhat offsetting the favorable development was adverse development in the personal insurance segment of $6.4 million, driven by personal auto and homeowners which contributed $5.2 million and $2.2 million of adverse development, respectively.

Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the three months ended March 31, 2019 was primarily due to favorable development in the personal and commercial insurance segments. Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the three months ended March 31, 2019 was $20.9 million. In the personal insurance segment, personal auto contributed $6.8 million of favorable development, primarily attributable to lower than anticipated severity from the 2018 accident year partially offset by $0.6 million of adverse development in homeowners, primarily from the 2018 accident year. In the commercial insurance segment, all products developed favorably, with small commercial package, workers' compensation, and middle market commercial contributing $4.8 million, $4.5 million, and $3.1 million, respectively. Slightly offsetting the favorable development was adverse development in the specialty run-off business of $1.3 million, primarily driven by large fire losses in the fourth quarter of 2018 in E&S property.