The Hartford 2011 Annual Report Download - page 46

46
Prior accident years development recorded in 2011
Included within prior accident years development for the year ended December 31, 2011 were the following loss and loss adjustment
expense reserve strengthenings (releases):
For the year ended December 31, 2011
Property & Casualty
Commercial
Consumer
Markets
Property &
Casualty
Other
Operations
Total Property and
Casualty Insurance
Auto liability
$
(4)
$
(93)
$
—
$
(97)
Homeowners
—
(1)
—
(1)
Professional liability
29
— —
29
Package business
(76)
—
—
(76)
Workers’ compensation
171
—
—
171
General liability
(40)
—
—
(40)
Fidelity and surety
(7)
—
—
(7)
Commercial property
(4)
—
—
(4)
Net asbestos reserves — —
294
294
Net environmental reserves
—
—
26
26
Change in workers' compensation discount, including accretion
38
—
—
38
Catastrophes
12
25
—
37
Other reserve re-estimates, net
6
(6)
(3)
(3)
Total prior accident years development
$
125
$
(75)
$
317
$
367
During 2011, the Company’ s re-estimates of prior accident years reserves included the following significant reserve changes:
• Released reserves for personal auto liability claims, primarily for accident years 2006 through 2010. Favorable trends in reported
severity have persisted or improved over this time period. As these accident years develop, the uncertainty around the ultimate
losses is reduced and management places more weight on the emerged experience.
• Strengthened reserves in professional liability for accident years 2007 through 2008, primarily in the directors and officers
(“D&O”) line of business. Detailed reviews of claims involving the sub-prime mortgage market collapse, and shareholder class
action lawsuits, resulted in a higher estimate of future claim costs for these exposures.
• Released reserves in package business liability coverages and general liability, in accident years 2005 through 2009. As these
accident years developed, claim severity has emerged lower than expected.
• Strengthened reserves in workers’ compensation in accident years 2008 through 2010. Accident year 2010 loss costs trends were
higher than expected as an increase in frequency outpaced a moderation of severity trends. Strengthening in accident years 2009
and 2008 was the result of higher than expected loss emergence for these years. Strengthening in more recent years is partially
offset by releases in accident years 2007 and prior. Severity emergence in these older accident years continues to be favorable.
• Strengthened prior year catastrophe reserves, primarily related to a severe wind and hail storm in Arizona during the fourth quarter
of 2010. Severity of property damage associated with this event increased more than expected.
• Refer to the Property & Casualty Other Operations Claims section for discussion concerning the Company’ s annual evaluations of net
environmental and net asbestos reserves, and related reinsurance.