Losses and Loss Expenses Payable Losses and Loss Expenses Payable

9 Months Ended

Sep. 30, 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 nine months ended September 30, 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	779.8		692.7
Prior years	(17.6)		(55.1)
Total incurred	762.2		637.6
Paid related to:
Current year	420.8		366.4
Prior years	338.2		327.0
Total paid	759.0		693.4
Net balance at end of period	1,056.1		1,085.5
Plus: reinsurance recoverable on losses and loss expenses payable	35.2		7.2
Losses and loss expenses payable, at end of period	$	1,091.3	$	1,092.7

The Company recorded less favorable development related to prior years’ loss and loss expense reserves for the nine months ended September 30, 2020, of $17.6 million compared to $55.1 million for the same 2019 period. Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the nine months ended September 30, 2020 was $31.8 million, due to favorable development in the commercial insurance segment. In the commercial insurance segment, all products developed favorably, with small commercial package, workers' compensation, and middle market commercial contributing $16.5 million, $16.1 million, and $14.3 million, respectively. Partially offsetting the favorable development was adverse development in the personal insurance segment and specialty run-off, which contributed $20.2 million and $5.2 million, respectively. The adverse development in the personal insurance segment was primarily driven by personal auto, which contributed $19.1 million of adverse development. The personal auto adverse development was driven by higher than expected severity of bodily injury claims from multiple accident years. The specialty run-off adverse development primarily related to an adverse court decision relating to an E&S casualty claim from 2016. Partially offsetting the favorable development of prior years' non-catastrophe loss and ALAE reserves was adverse development in catastrophe loss and ALAE reserves driven by $12.4 million of adverse development in E&S property related to Hurricane Irma.

For the nine months ended September 30, 2019, favorable development of prior accident year's non-catastrophe loss and ALAE reserves was $54.1 million. In the personal insurance segment, personal auto contributed $11.0 million of favorable development. In the commercial insurance segment, all lines contributed favorable development, with workers' compensation, small commercial package, and middle market commercial contributing $13.4 million, $11.8 million, and $7.2 million, respectively.