The Hartford 2013 Annual Report Download - page 52

52
Prior accident years development recorded in 2012
Included within prior accident years development for the year ended December 31, 2012 were the following loss and loss adjustment
expense reserve strengthenings (releases):
For the year ended December 31, 2012
Property &
Casualty
Commercial Consumer Markets
Property &
Casualty Other
Operations
Total Property
& Casualty
Insurance
Auto liability $ 56 $ (81) $ — $ (25)
Homeowners — (32) — (32)
Professional liability 40 — — 40
Package business (20) — — (20)
General liability (87) — — (87)
Fidelity and surety (9) — — (9)
Commercial property (8) — — (8)
Net asbestos reserves — — 48 48
Net environmental reserves — — 10 10
Workers’ compensation 78 — — 78
Change in workers’ compensation discount, including
accretion 52 — — 52
Catastrophes (37)(29) — (66)
Other reserve re-estimates, net 7 1 7 15
Total prior accident years development $ 72 $ (141) $ 65 $ (4)
During 2012, 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 2008 through 2011. As these accident years
matured, favorable bodily injury severity trends were observed and management placed more weight on the emerged
experience. Management has adjusted trend assumptions accordingly.
• Released reserves for homeowners claims, primarily for accident year 2011 as a result of favorable large loss frequency and
lower than expected severity.
• Strengthened reserves for commercial auto liability claims, primarily for accident year 2010 and 2011. Higher than expected
bodily injury severity, driven by large loss activity, has been observed for these accident years.
• Strengthened reserves for professional liability directors and officers claims for accident years 2011 and prior as a result of
higher severity, primarily for mid- and large-sized accounts.
• Released reserves in package business liability coverages and general liability, primarily for accident years 2006 through 2011.
Claim severity emergence for these years was lower than expected and management has placed more weight on the emerged
experience. In addition, older years have improved due to favorable emergence of larger claims.
• Strengthened reserves in workers' compensation primarily due to the emergence of lost time claims from 2011.
• The change in workers’ compensation discount, including accretion, primarily reflects a decrease in the number of tabular
claims, and to a lesser extent, the decrease in interest rates.
• Reserve releases on certain prior year catastrophes, primarily related to 2001 World Trade Center worker's compensation
claims.
• Refer to the Property & Casualty Other Operations Claims section for further discussion on net asbestos and net environmental
reserves.