
	Nine months ended September 30,
	2026		2025
Balance at beginning of year	$	15,094	$	14,179
Less reinsurance recoverables, net of allowance	5,306		4,957
Net liability at beginning of year	9,788		9,222
Provision for losses and LAE occurring in the current period	3,531		3,381


Net decrease in the provision for claims of prior years	(155)		(54)
Total losses and LAE incurred	3,376		3,327
Payments for losses and LAE of:
Current year	(909)		(836)
Prior years	(1,955)		(1,998)
Total payments	(2,864)		(2,834)
Foreign currency translation and other	(3)		(7)
Net liability at end of period	10,297		9,708
Add back reinsurance recoverables, net of allowance	5,798		5,371
Gross unpaid losses and LAE included in the balance sheet at end of period	$	16,095	$	15,079

The net decrease in the provision for claims of prior years during the first nine months of 2026 reflects (i) lower than anticipated losses in the crop business, lower than expected claim severity and frequency in the inland marine business and the agribusiness operations and lower than anticipated claim severity in the commercial auto, aviation and equine businesses (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation businesses (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency and severity in the fidelity and crime business and lower than expected claim severity in the surety and financial institutions businesses (within the Specialty financial sub-segment). This favorable development was partially offset by higher than anticipated severity in certain social inflation exposed businesses (within the Specialty casualty sub-segment).

The net decrease in the provision for claims of prior years during the first nine months of 2025 reflects (i) lower than anticipated losses in the crop business, lower than anticipated claim severity in the aviation business and lower than expected claim frequency and severity in the inland marine business (within the Property and transportation sub-segment), (ii) lower than anticipated claim severity in the workers’ compensation and executive liability businesses (within the Specialty casualty sub-segment) and (iii) lower than anticipated claim frequency in the financial institutions business and lower than expected claim severity in the surety, fidelity and trade credit businesses (within the Specialty financial sub-segment). This favorable development was partially offset by higher than expected claim severity in the excess and surplus, social services, excess liability, public sector and general liability businesses (within the Specialty casualty sub-segment).

Recoverables from Reinsurers and Premiums Receivable Progressions of the 2026 and 2025 allowance for expected credit losses on recoverables from reinsurers and premiums receivable are shown below (in millions):


	Recoverables from Reinsurers				Premiums Receivable
	2026		2025		2026		2025
Balance at June 30	$	9	$	9	$	21	$	19
Provision (credit) for expected credit losses	—		—		—		1
Write-offs charged against the allowance	—		—		—		—
Balance at September 30	$	9	$	9	$	21	$	20

Balance at December 31	$	10	$	11	$	20	$	19
Provision (credit) for expected credit losses	(1)		(2)		1		1
Write-offs charged against the allowance	—		—		—		—
Balance at September 30	$	9	$	9	$	21	$	20