
(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025
Gross loss and loss expense reserves, beginning of period	$	12,406	$	11,001	$	11,450	$	9,937
Less reinsurance recoverable	413		504		438		269
Net loss and loss expense reserves, beginning of period	11,993		10,497		11,012		9,668





Net incurred loss and loss expenses related to:
Current accident year	1,689		1,486		5,287		5,114
Prior accident years	(94)		(22)		(217)		(176)
Total incurred	1,595		1,464		5,070		4,938
Net paid loss and loss expenses related to:
Current accident year	729		616		1,575		1,800
Prior accident years	587		601		2,235		2,062
Total paid	1,316		1,217		3,810		3,862
Net loss and loss expense reserves, end of period	12,272		10,744		12,272		10,744
Plus reinsurance recoverable	402		451		402		451
Gross loss and loss expense reserves, end of period	$	12,674	$	11,195	$	12,674	$	11,195

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 $76 million and $65 million at September 30, 2026, and 2025, respectively, for certain life and health loss and loss expense reserves.

We experienced $94 million of favorable development on prior accident years, including $46 million of favorable development in commercial lines, $38 million of favorable development in personal lines and $6 million of favorable development in excess and surplus lines for the three months ended September 30, 2026. Within commercial lines, we recognized favorable reserve development of $22 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. Within personal lines, we recognized favorable reserve development of $33 million for the homeowner line.

We experienced $217 million of favorable development on prior accident years, including $116 million of favorable development in commercial lines, $56 million of favorable development in personal lines and $20 million of favorable development in excess and surplus lines for the nine months ended September 30, 2026. Within commercial lines, we recognized favorable reserve development of $72 million for the commercial property line and $40 million for the workers' compensation line due to reduced uncertainty of prior accident year loss and loss adjustment expense for these lines. Within personal lines, we recognized favorable reserve development of $52 million for the homeowner line.

We experienced $22 million of favorable development on prior accident years, including $18 million of favorable development in commercial lines, $14 million of unfavorable development in personal lines and $4 million of favorable development in excess and surplus lines for the three months ended September 30, 2025. Within commercial lines, we recognized favorable reserve development of $38 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 $24 million for the commercial casualty line and $10 million for the commercial auto line.