Chubb Ltd

7. Unpaid losses and loss expenses

The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:

(2)Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments, earned premiums, and A&H long-duration lines totaling $46 million and $(8) million for the three months ended March 31, 2024 and 2023, respectively.

Net unpaid losses and loss expenses increased $940 million for the three months ended March 31, 2024, principally reflecting underlying exposure growth and the impact of a reinsurance commutation in connection with a large structured transaction during the quarter, partially offset by the impact of favorable prior period development and crop activity.

Prior Period Development

Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years. Long-tail lines include lines such as workers' compensation, general liability, and financial lines; while short-tail lines include lines such as most property lines, energy, personal accident, and agriculture. The following table summarizes (favorable) and adverse PPD by segment:

Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate.

North America Commercial P&C Insurance. Net favorable development for the three months ended March 31, 2024, included $74 million in surety lines and $62 million in property and marine lines due to lower-than-expected loss development. The favorable development was partially offset by net adverse development of $102 million in commercial excess and umbrella lines, driven by higher-than-expected loss development.

Net favorable development for the three months ended March 31, 2023, was $72 million favorable with $81 million favorable in short-tail lines and $9 million adverse in long-tail lines. The short tail development was primarily in surety and A&H, partially offset by adverse development in property and marine due to the net impact of positive development from Hurricane Ian and negative development from Winter Storm Elliott. The long-tail development was the net of favorable developments in specialty casualty and workers comp due to lower than expected paid and reported loss activity offset by adverse development in general liability and certain financial lines due to higher-than-expected development.

Overseas General Insurance. Net favorable development for the three months ended March 31, 2024, was $89 million, which included $58 million in property lines driven by favorable development across all regions, primarily in accident years 2020 through 2023.

Net favorable development for the three months ended March 31, 2023 included $85 million in property lines, driven by lower-than-expected catastrophe loss development activity of $43 million in accident year 2022, and non-catastrophe loss emergence in Continental Europe and the U.K.