The Hartford 2013 Annual Report Download - page 54

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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
& Casualty
Insurance
Auto liability $ (4) $ (93) $ — $ (97)
Homeowners — (1) — (1)
Professional liability 29 — — 29
Package business (76) — — (76)
General liability (40) — — (40)
Fidelity and surety (7) — — (7)
Commercial property (4) — — (4)
Net asbestos reserves — — 294 294
Net environmental reserves — — 26 26
Workers’ compensation 171 — — 171
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.
• 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.
• 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.