
	Six Months Ended June 30,
(in millions)	2025		2024
Claims and claim adjustment expense reserves at beginning of year	$	64,088	$	61,621
Less reinsurance recoverables on unpaid losses	7,669		7,817

Net reserves at beginning of year	56,419		53,804
Estimated claims and claim adjustment expenses for claims arising in the current year	15,392		14,213
Estimated decrease in claims and claim adjustment expenses for claims arising in prior years	(650)		(232)
Total increases	14,742		13,981
Claims and claim adjustment expense payments for claims arising in:
Current year	4,504		3,953
Prior years	7,763		7,750
Total payments	12,267		11,703
Unrealized foreign exchange (gain) loss	272		(75)
Net reserves at end of period	59,166		56,007
Plus reinsurance recoverables on unpaid losses	7,771		7,845
Claims and claim adjustment expense reserves at end of period	$	66,937	$	63,852

Gross claims and claim adjustment expense reserves as of June 30, 2025 increased by $2.85 billion from December 31, 2024, primarily reflecting the impacts of (i) catastrophe losses in the first six months of 2025, (ii) higher volumes of insured exposures and (iii) loss cost trends for the current accident year, partially offset by (iv) claim payments made during the first six months of 2025 and (v) net favorable prior year reserve development.

For the six months ended June 30, 2025 and 2024, estimated claims and claim adjustment expenses incurred included $650 million and $232 million, respectively, of net favorable development for claims arising in prior years, including $693 million and $321 million, respectively, of net favorable prior year reserve development, and $22 million of accretion of discount in each period.

Business Insurance. Net favorable prior year reserve development in the second quarter of 2025 totaled $79 million, primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years, partially offset by an addition to reserves related to run-off operations. Net favorable prior year reserve development in the second quarter of 2024 totaled $34 million, primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years, partially offset by higher than expected loss experience in the general liability product line for recent accident years, driven by excess coverages, as well as an addition to reserves related to run-off operations.

Net favorable prior year reserve development in the first six months of 2025 totaled $153 million, primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years, partially offset by an addition to reserves related to run-off operations. Net favorable prior year reserve development in the first six months of 2024 totaled $34 million, primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years, partially offset by higher than expected loss experience in the general liability product line for recent accident years, as well as an addition to reserves related to run-off operations.

Bond & Specialty Insurance. Net favorable prior year reserve development in the second quarter and first six months of 2025 totaled $81 million and $148 million, respectively, primarily driven by better than expected loss experience in the fidelity and surety product line for recent accident years. Net favorable prior year reserve development in the second quarter and first six months of 2024 totaled $24 million and $48 million, respectively, primarily driven by better than expected loss experience in the fidelity and surety product line for recent accident years.

Personal Insurance. Net favorable prior year reserve development in the second quarter and first six months of 2025 totaled $155 million and $392 million, respectively, primarily driven by better than expected loss experience in both the automobile and homeowners and other product lines for recent accident years. Net favorable prior year reserve development in the second quarter and first six months of 2024 totaled $172 million and $239 million, respectively, primarily driven by better than expected loss experience in both the homeowners and other and automobile product lines for recent accident years.