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Unpaid losses and loss adjustment expenses (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019 is as follows (in millions).

	2019			2018			2017
Balances – beginning of year:
Gross liabilities	$	68,458		$	61,122		$	53,379
Reinsurance recoverable on unpaid losses		(3,060	)		(3,201	)		(3,338	)
Net liabilities		65,398			57,921			50,041
Incurred losses and loss adjustment expenses:
Current accident year events		43,335			39,876			37,702
Prior accident years’ events		(752	)		(1,406	)		(544	)
Total incurred losses and loss adjustment expenses		42,583			38,470			37,158
Paid losses and loss adjustment expenses:
Current accident year events		(19,482	)		(18,391	)		(17,425	)
Prior accident years’ events		(17,642	)		(15,452	)		(12,507	)
Total payments		(37,124	)		(33,843	)		(29,932	)
Foreign currency translation adjustment		(23	)		(331	)		654
Business acquisition (disposition)		(670	)		3,181			—
Balances – end of year:
Net liabilities		70,164			65,398			57,921
Reinsurance recoverable on unpaid losses		2,855			3,060			3,201
Gross liabilities	$	73,019		$	68,458		$	61,122

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 Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”) to our consolidated unpaid losses and loss adjustment expenses as of December 31, 2019 follows (in millions).

	GEICO Physical Damage		GEICO Auto Liability		BH Primary Medical Professional Liability		BH Primary Workers’ Compensation and Other Casualty		BHRG Property		BHRG Casualty		Total
Unpaid losses and ALAE, net	$	321	$	18,475	$	7,479	$	9,568	$	9,382	$	21,304	$	66,529
Reinsurance recoverable		—		1,014		54		597		268		852		2,785
Unpaid unallocated loss adjustment expenses														2,367
Other unpaid losses and loss adjustment expenses														1,338
Unpaid losses and loss adjustment expenses													$	73,019

Schedule of average historical claims duration

Required 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 Physical Damage		98	%		2	%
GEICO Auto Liability		42	%		29	%		13	%		8	%		4	%
BH Primary Medical Professional Liability		2	%		7	%		12	%		15	%		15	%		12	%		9	%		6	%		5	%		4	%
BH Primary Workers’ Compensation and Other Casualty		16	%		21	%		16	%		12	%		8	%		5	%		3	%		2	%		1	%		2	%
BHRG Property		19	%		36	%		17	%		9	%		4	%		3	%		1	%		1	%		0	%		1	%
BHRG Casualty		10	%		17	%		13	%		8	%		7	%		5	%		4	%		2	%		2	%		1	%

GEICO [Member] | Insurance Group [Member] | Physical Damage [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 for physical damage and auto liability claims. IBNR and case development liabilities are as of December 31, 2019. 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.

Physical Damage

	Incurred Losses and ALAE through December 31,							Cumulative Number of
Accident Year		2018*		2019		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2018		$	8,345	$	8,274	$	34		8,612
2019					9,020		334		8,772
	Incurred losses and ALAE			$	17,294

	Cumulative Paid Losses and ALAE through December 31,
Accident Year		2018*		2019
2018		$	8,078	$	8,301
2019					8,678
	Paid losses and ALAE				16,979
	Net unpaid losses and ALAE for 2018 – 2019				315
	Net unpaid losses and ALAE for accident years before 2018				6
	Net unpaid losses and ALAE			$	321

GEICO [Member] | Insurance Group [Member] | Auto Liability [Member]

Schedule of incurred and paid losses and allocated loss adjustment expenses

Auto Liability

	Incurred Losses and ALAE through December 31,												Cumulative Number of
Accident Year	2015*		2016*		2017*		2018*		2019		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2015	$	10,590	$	10,666	$	10,785	$	10,824	$	10,853	$	156		2,338
2016				11,800		12,184		12,149		12,178		356		2,445
2017						14,095		13,864		13,888		983		2,628
2018								15,383		15,226		2,425		2,674
2019										16,901		4,694		2,577
	Incurred losses and ALAE								$	69,046

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019
2015	$	4,579	$	7,694	$	9,133	$	10,007	$	10,472
2016				5,069		8,716		10,330		11,294
2017						5,806		9,944		11,799
2018								6,218		10,772
2019										6,742
	Paid losses and ALAE									51,079
	Net unpaid losses and ALAE for 2015 – 2019 accident years									17,967
	Net unpaid losses and ALAE for accident years before 2015									508
	Net unpaid losses and ALAE								$	18,475

*	Unaudited required supplemental information

Berkshire Hathaway Primary Group [Member] | Insurance Group [Member] | Medical Professional Liability [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. These methodologies produce 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.

	Incurred Losses and ALAE through December 31,																						Cumulative Number of
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2010	$	1,399	$	1,346	$	1,348	$	1,329	$	1,234	$	1,140	$	1,085	$	1,031	$	1,006	$	991	$	29		12
2011				1,346		1,334		1,321		1,262		1,173		1,115		1,050		1,004		968		38		11
2012						1,336		1,306		1,277		1,223		1,168		1,078		1,035		998		64		11
2013								1,328		1,296		1,261		1,195		1,127		1,086		1,019		93		11
2014										1,370		1,375		1,305		1,246		1,218		1,127		184		11
2015												1,374		1,342		1,269		1,290		1,218		301		12
2016														1,392		1,416		1,414		1,394		412		14
2017																1,466		1,499		1,495		685		18
2018																		1,602		1,650		1,088		18
2019																				1,670		1,369		12
	Incurred losses and ALAE																		$	12,530

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019
2010	$	15	$	95	$	224	$	377	$	526	$	654	$	745	$	810	$	853	$	888
2011				16		82		200		356		517		632		711		767		822
2012						15		93		218		377		522		642		725		789
2013								15		90		219		368		518		635		743
2014										21		106		238		396		540		671
2015												23		108		218		382		543
2016														22		115		274		461
2017																27		128		300
2018																		35		166
2019																				39
	Paid losses and ALAE																		$	5,422
	Net unpaid losses and ALAE for 2010 – 2019 accident years																			7,108
	Net unpaid losses and ALAE for accident years before 2010																			371
	Net unpaid losses and ALAE																		$	7,479

*	Unaudited required supplemental information

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

	Incurred Losses and ALAE through December 31,																						Cumulative Number of
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2010	$	662	$	638	$	612	$	577	$	560	$	556	$	548	$	539	$	531	$	528	$	36		41
2011				738		675		675		624		621		618		607		596		591		56		46
2012						873		850		837		791		780		762		750		736		76		53
2013								1,258		1,228		1,178		1,127		1,096		1,072		1,050		149		67
2014										1,743		1,638		1,614		1,548		1,482		1,497		220		90
2015												2,169		2,127		2,042		2,014		2,025		336		110
2016														2,511		2,422		2,359		2,325		533		114
2017																3,044		2,907		2,842		855		135
2018																		3,544		3,412		1,445		151
2019																				4,074		2,577	147
	Incurred losses and ALAE																		$	19,080

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019
2010	$	102	$	236	$	314	$	374	$	417	$	445	$	459	$	466	$	472	$	480
2011				109		220		333		403		453		481		496		505		512
2012						116		299		414		501		560		592		611		626
2013								177		422		609		725		793		835		858
2014										239		557		800		1,007		1,111		1,176
2015												289		700		1,017		1,289		1,488
2016														329		775		1,148		1,461
2017																441		1,003		1,434
2018																		538		1,198
2019																				682
	Paid losses and ALAE																			9,915
	Net unpaid losses and ALAE for 2010 – 2019 accident years																			9,165
	Net unpaid losses and ALAE for accident years before 2010																			403
	Net unpaid losses and ALAE																		$	9,568

*	Unaudited required supplemental information

Berkshire Hathaway Reinsurance Group [Member] | Insurance Group [Member] | Property [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, 2019. Dollars are in millions.

BHRG Property

	Incurred Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019		IBNR and Case Development Liabilities
2010	$	2,516	$	2,475	$	2,354	$	2,226	$	2,138	$	2,103	$	2,085	$	2,064	$	2,074	$	2,062	$	23
2011				4,197		4,138		3,851		3,754		3,753		3,723		3,700		3,686		3,674		41
2012						3,132		2,828		2,624		2,384		2,331		2,328		2,311		2,295		47
2013								3,181		3,022		2,679		2,589		2,569		2,510		2,459		61
2014										2,615		2,417		2,306		2,162		2,107		2,035		77
2015												3,243		3,084		2,528		2,935		2,932		208
2016														3,266		3,892		3,617		3,594		281
2017																5,258		4,959		4,807		478
2018																		4,366		4,468		1,025
2019																				4,100		1,977
Incurred losses and ALAE																			$	32,426

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019
2010	$	335	$	1,059	$	1,485	$	1,742	$	1,905	$	1,954	$	2,000	$	2,024	$	2,031	$	2,043
2011				664		2,305		2,957		3,219		3,336		3,426		3,467		3,512		3,530
2012						260		1,219		1,797		1,935		2,023		2,099		2,118		2,163
2013								513		1,416		1,854		2,050		2,170		2,251		2,290
2014										464		1,235		1,561		1,699		1,764		1,814
2015												574		1,591		1,940		2,134		2,239
2016														705		1,790		2,181		2,641
2017																1,027		2,716		3,638
2018																		907		2,309
2019																				747
Paid losses and ALAE																				23,414
Net unpaid losses and ALAE for 2010 – 2019 accident years																				9,012
Net unpaid losses and ALAE for accident years before 2010																			370
Net unpaid losses and ALAE																			$	9,382

*	Unaudited required supplemental information

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

Schedule of incurred and paid losses and allocated loss adjustment expenses

BHRG Casualty

	Incurred Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019		IBNR and Case Development Liabilities
2010	$	2,296	$	2,383	$	2,316	$	2,253	$	2,135	$	2,085	$	2,040	$	1,878	$	1,958	$	1,913	$	203
2011				2,602		2,690		2,560		2,500		2,411		2,320		2,313		2,274		2,240		299
2012						2,784		2,962		2,797		2,861		2,790		2,678		2,611		2,554		318
2013								2,124		2,257		2,287		2,131		2,077		2,023		1,928		411
2014										1,863		2,058		2,027		1,990		1,904		1,942		574
2015												1,870		2,071		2,098		1,999		1,872		534
2016														1,900		2,106		2,014		1,971		680
2017																2,186		2,674		2,552		941
2018																		2,914		3,544		1,511
2019																				3,405		2,348
	Incurred losses and ALAE																		$	23,921

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2010*		2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019
2010	$	117	$	542	$	834	$	1,022	$	1,274	$	1,369	$	1,433	$	1,478	$	1,526	$	1,552
2011				289		812		1,155		1,395		1,483		1,575		1,653		1,693		1,727
2012						307		745		1,136		1,365		1,522		1,646		1,746		1,805
2013								290		517		802		930		1,034		1,135		1,195
2014										149		474		639		748		871		955
2015												195		487		710		830		921
2016														252		553		730		860
2017																230		562		816
2018																		264		865
2019																				351
	Paid losses and ALAE																			11,047
	Net unpaid losses and ALAE for 2010 – 2019 accident years																			12,874
	Net unpaid losses and ALAE for accident years before 2010																			8,430
	Net unpaid losses and ALAE																		$	21,304

*	Unaudited required supplemental information