Unpaid losses and loss adjustment expenses (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of liability for unpaid claims and claims adjustment expense

A reconciliation of the changes in claim liabilities, excluding liabilities under retroactive reinsurance contracts (see Note 16), for each of the three years ending December 31, 2018 is as follows (in millions).

	2018			2017			2016
Balances – beginning of year:
Gross liabilities	$	61,122		$	53,379		$	50,519
Reinsurance recoverable on unpaid losses		(3,201	)		(3,338	)		(3,307	)
Net liabilities		57,921			50,041			47,212
Incurred losses and loss adjustment expenses:
Current accident year events		39,876			37,702			30,636
Prior accident years’ events		(1,406	)		(544	)		(1,443	)
Total incurred losses and loss adjustment expenses		38,470			37,158			29,193
Paid losses and loss adjustment expenses:
Current accident year events		(18,391	)		(17,425	)		(14,898	)
Prior accident years’ events		(15,452	)		(12,507	)		(10,929	)
Total payments		(33,843	)		(29,932	)		(25,827	)
Foreign currency translation adjustment		(331	)		654			(537	)
Business acquisition		3,181			—			—
Balances – end of year:
Net liabilities		65,398			57,921			50,041
Reinsurance recoverable on unpaid losses		3,060			3,201			3,338
Gross liabilities	$	68,458		$	61,122		$	53,379

Schedule of reconciliation of unpaid losses and allocated loss adjustment expenses to balance sheet liability

A reconciliation of the disaggregated net unpaid losses and allocated loss adjustment expenses (the latter referred to as “ALAE”) of GEICO, Berkshire Hathaway Reinsurance Group (“BHRG”) and Berkshire Hathaway Primary Group (“BH Primary”) to our consolidated unpaid losses and loss adjustment expenses as of December 31, 2018, follows (in millions).

	GEICO		BHRG Property		BHRG Casualty		BH Primary Medical Professional Liability		BH Primary Workers’ Compensation and Other Casualty		Total
Unpaid losses and ALAE, net	$	17,318	$	9,395	$	19,966	$	7,288	$	8,694	$	62,661
Reinsurance recoverable		896		312		850		53		940		3,051
Unpaid unallocated loss adjustment expenses												2,015
Other unpaid losses and loss adjustment expenses												731
Unpaid losses and loss adjustment expenses											$	68,458

Schedule of average historical claims duration

Supplemental unaudited average historical claims duration information based on the net losses and ALAE incurred and paid accident year data in the preceding tables follows. The percentages show the average portions of net losses and ALAE paid by each succeeding year, with year 1 representing the current accident year.

Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
In Year	1		2		3		4		5		6		7		8		9		10
GEICO		61.7%		19.6%		8.1%		4.9%		2.8%
BHRG Property		19.0%		36.1%		18.3%		7.9%		4.3%		3.0%		1.5%		1.0%		0.2%		0.1%
BHRG Casualty		10.4%		17.8%		11.5%		8.5%		7.4%		5.1%		3.0%		1.9%		1.8%		1.4%
BH Primary Medical Professional Liability		1.6%		7.3%		11.5%		14.5%		14.1%		12.4%		8.4%		6.0%		4.1%		2.3%
BH Primary Workers’ Compensation and Other Casualty		15.8%		21.5%		16.5%		12.0%		7.6%		4.6%		2.9%		1.5%		1.0%		0.7%

Insurance Group [Member] | GEICO [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

GEICO’s incurred and paid losses and ALAE, net of reinsurance, are summarized by accident year below. IBNR and case development liabilities are as of December 31, 2018. Claim counts are established when accidents that may result in a liability are reported and are based on policy coverage. Each claim event may generate claims under multiple coverages, and thus may result in multiple counts. The “Cumulative Number of Reported Claims” includes the combined number of reported claims for all policy coverages and excludes projected IBNR claims. Dollars are in millions.

Accident    Year	Incurred Losses and ALAE through December 31,										IBNR and Case Development Liabilities		Cumulative Number of Reported Claims (in thousands)
	2014*		2015*		2016*		2017*		2018
2014	$	14,680	$	14,572	$	14,559	$	14,589	$	14,651		$                148		7,976
2015				16,887		16,875		16,993		17,039		319		8,926
2016						19,106		19,390		19,364		823		9,633
2017								22,675		22,257		2,208		10,816
2018										24,120		4,659		10,968
		Incurred losses and ALAE							$	97,431
Accident    Year	Cumulative Paid Losses and ALAE through December 31,
	2014*		2015*		2016*		2017*		2018
2014	$	9,199	$	12,036	$	13,140	$	13,850	$	14,273
2015				10,606		13,858		15,285		16,186
2016						12,020		15,862		17,493
2017								13,878		18,249
2018										14,498
		Paid losses and ALAE								80,699
Net unpaid losses and ALAE for 2014 – 2018 accident years										16,732
Net unpaid losses and ALAE for accident years before 2014										586
Net unpaid losses and ALAE									$	17,318

* Unaudited supplemental information

Property [Member] | Insurance Group [Member] | Berkshire Hathaway Reinsurance Group [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

BHRG’s disaggregated incurred and paid losses and ALAE are summarized by accident year, net of reinsurance. IBNR and case development liabilities are as of December 31, 2018. Dollars are in millions.

BHRG Property

Accident   Year	Incurred Losses and ALAE through December 31,																				IBNR and Case Development Liabilities
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	2,366	$	2,037	$	2,232	$	2,154	$	2,058	$	2,031	$	1,990	$	1,985		$1,984	$	1,984		$                7
2010				2,523		2,380		2,408		2,274		2,180		2,145		2,126		2,106		2,114		23
2011						4,300		4,084		3,810		3,720		3,719		3,689		3,666		3,652		52
2012								3,144		2,833		2,629		2,389		2,336		2,333		2,315		65
2013										3,196		3,039		2,695		2,604		2,584		2,524		105
2014												2,621		2,427		2,315		2,171		2,115		120
2015														3,244		3,088		2,531		2,938		136
2016																3,267		3,906		3,625		583
2017																		5,248		4,958		600
2018																				4,373		2,125
Incurred losses and ALAE																			$	30,598
Accident   Year	Cumulative Paid Losses and ALAE through December 31,
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	402	$	1,110	$	1,613	$	1,777	$	1,846	$	1,916	$	1,950	$	1,959	$	1,961	$	1,963
2010				336		1,024		1,506		1,772		1,931		1,987		2,033		2,058		2,065
2011						701		2,282		2,931		3,200		3,310		3,398		3,440		3,485
2012								266		1,222		1,801		1,939		2,028		2,103		2,123
2013										516		1,427		1,866		2,063		2,184		2,264
2014												465		1,244		1,569		1,708		1,773
2015														569		1,590		1,940		2,135
2016																703		1,792		2,187
2017																		1,026		2,713
2018																				910
Paid losses and ALAE																				21,618
Net unpaid losses and ALAE for 2009 – 2018 accident years																				8,980
Net unpaid losses and ALAE for accident years before 2009																				415
Net unpaid losses and ALAE																			$	9,395

* Unaudited supplemental information

Casualty [Member] | Insurance Group [Member] | Berkshire Hathaway Reinsurance Group [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

BHRG Casualty

Accident    Year	Incurred Losses and ALAE through December 31,																				IBNR and Case Development Liabilities
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	2,375		$2,687	$	2,546	$	2,476	$	2,414	$	2,339	$	2,292	$	2,231		$2,192		$    2,209	$	213
2010				2,301		2,387		2,322		2,258		2,139		2,090		2,044		1,883		1,963		228
2011						2,609		2,696		2,567		2,508		2,418		2,327		2,320		2,282		363
2012								2,789		2,964		2,799		2,864		2,793		2,682		2,615		514
2013										2,130		2,259		2,290		2,134		2,082		2,028		544
2014												1,867		2,061		2,029		1,991		1,905		611
2015														1,875		2,072		2,099		2,000		647
2016																1,903		2,107		2,014		818
2017																		2,189		2,676		1,141
2018																				2,917		1,856
Incurred losses and ALAE																				$  22,609
Accident    Year	Cumulative Paid Losses and ALAE through December 31,
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009		$    247	$	852	$	940	$	1,211	$	1,430	$	1,586	$	1,622	$	1,658		$1,684		$    1,716
2010				118		546		838		1,026		1,278		1,374		1,437		1,482		1,531
2011						292		817		1,160		1,400		1,489		1,581		1,659		1,698
2012								309		749		1,140		1,370		1,527		1,651		1,750
2013										291		521		807		935		1,039		1,140
2014												150		478		644		753		875
2015														196		491		714		834
2016																253		556		734
2017																		231		568
2018																				267
Paid losses and ALAE																				11,113
				Net unpaid losses and ALAE for 2009 – 2018 accident years																11,496
				Net unpaid losses and ALAE for accident years before 2009																8,470
				Net unpaid losses and ALAE																$  19,966

* Unaudited supplemental information

Medical Professional Liability [Member] | Insurance Group [Member] | Berkshire Hathaway Primary Group [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

BH Primary Medical Professional Liability

We estimate the ultimate expected incurred losses and loss adjustment expenses for medical professional claim liabilities using commonly accepted actuarial methodologies such as the paid and incurred development method, Bornhuetter-Ferguson based methods, hindsight outstanding severity method, trended severity method and trended pure premium method. Using a combination of these methodologies produces a range of loss estimates from which we determine our best estimate. Periodically, we study developments in older accident years and adjust initial loss estimates to reflect recent development based upon claim age, coverage and litigation experience. As previously noted, MLMIC was acquired on October 1, 2018. MLMIC’s incurred and paid losses and ALAE are included for all years presented retrospectively.

Accident Year	Incurred Losses and ALAE through December 31,																				IBNR and Case Development Liabilities		Cumulative Number of Reported Claims (in thousands)
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	1,423	$	1,349	$	1,294	$	1,251	$	1,153	$	1,060	$	988	$	941	$	922	$	904		$     22		13
2010				1,399		1,346		1,348		1,329		1,234		1,140		1,085		1,031		1,006		43		13
2011						1,346		1,334		1,321		1,262		1,173		1,115		1,050		1,004		71		13
2012								1,336		1,306		1,277		1,223		1,168		1,078		1,035		108		13
2013										1,328		1,296		1,261		1,195		1,127		1,086		160		12
2014												1,370		1,375		1,305		1,246		1,218		296		13
2015														1,374		1,342		1,269		1,290		450		14
2016																1,392		1,416		1,414		641		14
2017																		1,466		1,499		1,011		18
2018																				1,602		1,410		15
						Incurred losses and ALAE													$	12,058
Accident Year	Cumulative Paid Losses and ALAE through December 31,
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	5	$	90	$	203	$	350	$	480	$	619	$	699	$	753	$	789	$	810
2010				15		95		224		377		526		654		745		810		853
2011						16		82		200		356		517		632		711		767
2012								15		93		218		377		522		642		725
2013										15		90		219		368		518		635
2014												21		106		238		396		540
2015														23		108		218		382
2016																22		115		274
2017																		27		128
2018																				35
						Paid losses and ALAE														5,149
				Net unpaid losses and ALAE for 2009 – 2018 accident years																6,909
				Net unpaid losses and ALAE for accident years before 2009																379
				Net unpaid losses and ALAE															$	7,288

* Unaudited supplemental information

Workers' Compensation and Other Casualty [Member] | Insurance Group [Member] | Berkshire Hathaway Primary Group [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

BH Primary Workers’ Compensation and Other Casualty

We periodically evaluate ultimate loss and loss adjustment expense estimates for the workers’ compensation and other casualty claims using a combination of commonly accepted actuarial methodologies such as the Bornhuetter-Ferguson and chain-ladder approaches using paid and incurred loss data. Paid and incurred loss data is segregated and analyzed by state due to the different state regulatory frameworks that may impact certain factors including the duration and amount of loss payments. We also separately study the various components of liabilities, such employee lost wages, medical expenses and the costs of claims investigations and administration. We establish case liabilities for reported claims based upon the facts and circumstances of the claim. The excess of the ultimate projected losses, including the expected development of case estimates, and the case-basis liabilities is included in IBNR liabilities.

Accident Year	Incurred Losses and ALAE through December 31,																				IBNR and Case Development Liabilities		Cumulative Number of Reported Claims (in thousands)
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	732	$	673	$	676	$	632	$	609	$	595	$	589	$	585	$	576	$	562	$	40		46
2010				715		675		644		609		589		584		576		562		553		42		47
2011						786		706		709		657		653		647		632		622		72		51
2012								907		887		876		828		815		792		779		105		63
2013										1,339		1,310		1,257		1,210		1,173		1,148		188		83
2014												1,866		1,737		1,716		1,641		1,572		287		112
2015														2,314		2,244		2,156		2,124		445		133
2016																2,656		2,561		2,475		833		127
2017																		3,262		3,122		1,395		143
2018																				3,761		2,459		142
						Incurred losses and ALAE													$	16,718
Accident Year	Cumulative Paid Losses and ALAE through December 31,
	2009*		2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018
2009	$	99	$	228	$	328	$	389	$	434	$	464	$	488	$	499	$	503	$	507
2010				106		250		327		393		437		465		479		484		491
2011						114		222		344		415		470		498		512		522
2012								101		301		422		515		576		607		627
2013										193		452		650		776		842		887
2014												247		581		837		1,046		1,155
2015														297		715		1,044		1,328
2016																332		792		1,181
2017																		467		1,078
2018																				570
						Paid losses and ALAE														8,346
				Net unpaid losses and ALAE for 2009 – 2018 accident years																8,372
				Net unpaid losses and ALAE for accident years before 2009																322
				Net unpaid losses and ALAE															$	8,694

* Unaudited supplemental information