Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date. Claims payments may commence immediately after the contract date or, when applicable, after a contractual retention amount has been reached. Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment expenses and incurred losses and loss adjustment expenses to the amounts recorded in the Consolidated Statements of Earnings for each of the three-month periods ended March 31, 2023 and 2022 follow (in millions).


	2023			2022
Balances at beginning of year	$	35,415		$	37,855
Incurred losses and loss adjustment expenses:
Current year contracts		—			—
Prior years’ contracts		14			(7	)
Total		14			(7	)
Paid losses and loss adjustment expenses		(372	)		(547	)
Foreign currency effect		6			(5	)
Balances at March 31	$	35,063		$	37,296
Incurred losses and loss adjustment expenses above	$	14		$	(7	)
Deferred charge amortization and adjustments		171			215
Incurred losses and loss adjustment expenses included in the Consolidated Statements of Earnings	$	185		$	208

In the preceding table, classifications of incurred losses and loss adjustment expenses are based on the inception dates of the contracts, which reflect when our exposure to losses began. Incurred losses and loss adjustment expenses in the Consolidated Statements of Earnings include changes in estimated liabilities and related deferred charge asset amortization and adjustments arising from the changes in estimated timing and amount of future loss payments. Unamortized deferred charges related to retroactive reinsurance contracts were $9.7 billion at March 31, 2023 and $10.4 billion at March 31, 2022.