Transfer to liabilities held for sale (Note 4)

  
The best estimate of ultimate loss and loss adjustment expenses is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented. 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Years Ended December 31, |
|  | 2021 |  | 2020 |  | 2019 |
| Claims and benefits payable, at beginning of year | $ | 1,610.3  |  |  | $ | 1,613.1  |  |  | $ | 1,606.3  |  |
| Less: Reinsurance ceded and other | (849.4) |  |  | (855.1) |  |  | (874.2) |  |
| Net claims and benefits payable, at beginning of year | 760.9  |  |  | 758.0  |  |  | 732.1  |  |
| Incurred losses and loss adjustment expenses related to: |  |  |  |  |  |
| Current year | 2,202.2  |  |  | 2,305.4  |  |  | 2,401.6  |  |
| Prior years | (6.5) |  |  | (40.5) |  |  | (15.9) |  |
| Total incurred losses and loss adjustment expenses | 2,195.7  |  |  | 2,264.9  |  |  | 2,385.7  |  |
| Paid losses and loss adjustment expenses related to: |  |  |  |  |  |
| Current year | 1,679.2  |  |  | 1,770.6  |  |  | 1,857.3  |  |
| Prior years | 505.1  |  |  | 491.4  |  |  | 502.5  |  |
| Total paid losses and loss adjustment expenses | 2,184.3  |  |  | 2,262.0  |  |  | 2,359.8  |  |
| Transfer to liabilities held for sale (Note 4) | (2.0) |  |  | —  |  |  | —  |  |
| Net claims and benefits payable, at end of year | 770.3  |  |  | 760.9  |  |  | 758.0  |  |
| Plus: Reinsurance ceded and other (1) | 825.6  |  |  | 849.4  |  |  | 855.1  |  |
| Claims and benefits payable, at end of year (1) | $ | 1,595.9  |  |  | $ | 1,610.3  |  |  | $ | 1,613.1  |  |

(1)Includes reinsurance recoverables and claims and benefits payable of $143.8 million, $95.8 million and $86.8 million as of December 31, 2021, 2020 and 2019, respectively, which were ceded to the U.S. government. The Company acts as an administrator for the U.S. government under the voluntary National Flood Insurance Program.   
A comparison of net (favorable) unfavorable prior year development is shown below across the Company’s current and former segments and businesses. 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Prior Year Incurred Loss Development for the Years Ending December 31,  |
|  | 2021 |  | 2020 |  | 2019 |
| Global Lifestyle | $ | (35.2) |  |  | $ | (27.6) |  |  | $ | (24.0) |  |
| Global Housing | 36.5  |  |  | (8.0) |  |  | 13.6  |  |
| All Other | (7.8) |  |  | (4.9) |  |  | (5.5) |  |
| Total | $ | (6.5) |  |  | $ | (40.5) |  |  | $ | (15.9) |  |

  
The Company experienced net favorable loss development in each of the years ended December 31, 2021, 2020 and 2019. Global Lifestyle experienced similar amounts of net favorable development in 2021, 2020 and 2019 of $35.2 million, $27.6 million, and $24.0 million, respectively. Global Housing experienced net unfavorable loss development of $36.5 million in 2021 primarily due to reserve strengthening for small commercial liability claims in runoff from accident years 2018 and 2019 and from lender-placed homeowners insurance due to longer claim settlement lags and inflationary impacts. Global Housing experienced net favorable development of $8.0 million in 2020 primarily attributable to prior year reportable catastrophes. Global Housing experienced net unfavorable development in 2019 primarily due to higher than expected losses from Hurricane Maria (2017). A more detailed explanation of the claims development from Global Lifestyle and Global Housing is presented below, including claims development by accident year. Reserves for the longer-tail property and casualty coverages included in All Other (e.g., asbestos, environmental and other general liability) had no material changes in estimated amounts for claims incurred in prior years. The following tables represent the Global Lifestyle and Global Housing segments’ incurred claims and allocated claim adjustment expenses, net of reinsurance, less cumulative paid claims and allocated claim adjustment expenses, net of reinsurance to reconcile to total claims and benefits payable, net of reinsurance as of December 31, 2021. The tables provide undiscounted information about claims development by accident year for the significant short duration claims and benefits payable balances. The following factors are relevant to the loss development information included in the tables below: F-52
