
	Nine Months Ended September 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	21,959		21,276
Estimated decrease in claims and claim adjustment expenses for claims arising in prior years	(648)		(321)
Total increases	21,311		20,955
Claims and claim adjustment expense payments for claims arising in:
Current year	7,597		7,255
Prior years	10,623		10,545
Total payments	18,220		17,800
Unrealized foreign exchange loss	204		38
Net reserves at end of period	59,714		56,997
Plus reinsurance recoverables on unpaid losses	7,987		7,744
Claims and claim adjustment expense reserves at end of period	$	67,701	$	64,741

Gross claims and claim adjustment expense reserves as of September 30, 2025 increased by $3.61 billion from December 31, 2024, primarily reflecting the impacts of (i) catastrophe losses in the first nine 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 nine months of 2025 and (v) net favorable prior year reserve development.

For the nine months ended September 30, 2025 and 2024, estimated claims and claim adjustment expenses incurred included $648 million and $321 million, respectively, of net favorable development for claims arising in prior years, including $715 million and $447 million, respectively, of net favorable prior year reserve development, and $32 million and $33 million, respectively, of accretion of discount.

Business Insurance. Net unfavorable prior year reserve development in the third quarter of 2025 totaled $125 million, primarily driven by an addition to asbestos reserves of $277 million, partially offset by better than expected loss experience in the workers’ compensation product line for multiple accident years. Net unfavorable prior year reserve development in the third quarter of 2024 totaled $91 million, primarily driven by an addition to asbestos reserves of $242 million, partially offset by better than expected loss experience in the workers’ compensation product line for multiple accident years.

Net favorable prior year reserve development in the first nine months of 2025 totaled $28 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, including an addition to asbestos reserves of $277 million. Net unfavorable prior year reserve development in the first nine months of 2024 totaled $57 million, primarily driven by (i) higher than expected loss experience in the general liability product line (excluding asbestos) for recent accident years, (ii) an addition to asbestos reserves of $242 million and (iii) an addition to reserves related to run-off operations, partially offset by (iv) better than expected loss experience in the workers’ compensation product line for multiple accident years.

Bond & Specialty Insurance. Net favorable prior year reserve development in the third quarter and first nine months of 2025 totaled $43 million and $191 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 third quarter and first nine months of 2024 totaled $36 million and $84 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 third quarter of 2025 totaled $104 million, primarily driven by better than expected loss experience in the automobile product line for recent accident years. Net favorable prior year reserve development in the first nine months of 2025 totaled $496 million, 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 third quarter and first nine months of 2024 totaled $181 million and $420 million, respectively, primarily driven by better than expected loss experience in both the homeowners and other and automobile product lines for recent accident years.