
(Dollars in millions)	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Gross loss and loss expense reserves, beginning of period	$	11,884	$	10,707	$	11,450	$	9,937
Less reinsurance recoverable	406		551		438		269
Net loss and loss expense reserves, beginning of period	11,478		10,156		11,012		9,668





Net incurred loss and loss expenses related to:
Current accident year	1,850		1,650		3,598		3,628
Prior accident years	(42)		(63)		(123)		(154)
Total incurred	1,808		1,587		3,475		3,474
Net paid loss and loss expenses related to:
Current accident year	612		591		846		1,184
Prior accident years	681		655		1,648		1,461
Total paid	1,293		1,246		2,494		2,645
Net loss and loss expense reserves, end of period	11,993		10,497		11,993		10,497
Plus reinsurance recoverable	413		504		413		504
Gross loss and loss expense reserves, end of period	$	12,406	$	11,001	$	12,406	$	11,001

We use actuarial methods, models and judgment to estimate, as of a financial statement date, the property casualty loss and loss expense reserves required to pay for and settle all outstanding insured claims, including incurred but not reported (IBNR) claims, as of that date. The actuarial estimate is subject to review and adjustment by an inter-departmental committee that includes actuarial, claims, underwriting, loss prevention and accounting management. This committee is familiar with relevant company and industry business, claims and underwriting trends, as well as general economic and legal trends that could affect future loss and loss expense payments. The amount we will actually have to pay for claims can be highly uncertain. This uncertainty, together with the size of our reserves, makes the loss and loss expense reserves our most significant estimate. The reserve for loss and loss expenses in the condensed consolidated balance sheets also included $73 million and $71 million at June 30, 2026, and 2025, respectively, for certain life and health loss and loss expense reserves.

We experienced $42 million of favorable development on prior accident years, including $17 million of favorable development in commercial lines, $11 million of favorable development in personal lines and $6 million of favorable development in excess and surplus lines for the three months ended June 30, 2026. Within commercial lines, we recognized favorable reserve development of $19 million for the commercial property line and $15 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $14 million for the commercial casualty line.

We experienced $123 million of favorable development on prior accident years, including $70 million of favorable development in commercial lines, $18 million of favorable development in personal lines and $14 million of favorable development in excess and surplus lines for the six months ended June 30, 2026. Within commercial lines, we recognized favorable reserve development of $50 million for the commercial property line and $24 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $11 million for the commercial casualty line. Within personal lines, we recognized favorable reserve development of $19 million for the homeowner line.

We experienced $63 million of favorable development on prior accident years, including $42 million of favorable development in commercial lines, $19 million of favorable development in personal lines and $5 million of favorable development in excess and surplus lines for the three months ended June 30, 2025. Within commercial lines, we recognized favorable reserve development of $40 million for the commercial property line and $17 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. This was partially offset by unfavorable reserve development of $18 million for the commercial auto line. Within personal lines, we recognized favorable reserve development of $25 million for the homeowner line.