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. 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 six-month periods ended June 30, 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		15			(14	)
Total		15			(14	)
Paid losses and loss adjustment expenses		(1,033	)		(1,008	)
Foreign currency effect		24			(157	)
Balances at June 30	$	34,421		$	36,676
Incurred losses and loss adjustment expenses above	$	15		$	(14	)
Deferred charge amortization and adjustments		416			426
Incurred losses and loss adjustment expenses included in the Consolidated Statements of Earnings	$	431		$	412

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. Claims payments may commence immediately after the contract date or, when applicable, after a contractual retention amount has been reached. 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 $9.5 billion at June 30, 2023 and $9.9 billion at December 31, 2022.