Our liabilities for unpaid losses and loss adjustment expenses (also referred to as “claim liabilities”) under property and casualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim occurrences as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. A reconciliation of the changes in claim liabilities, excluding liabilities under retroactive reinsurance contracts (see Note 15), for each of the three months ending March 31, 2020 and 2019 follows (in millions).

	2020			2019
Balances – beginning of year:
Gross liabilities	$	73,019		$	68,458
Reinsurance recoverable on unpaid losses		(2,855	)		(3,060	)
Net liabilities		70,164			65,398
Incurred losses and loss adjustment expenses:
Current accident year events		10,896			9,787
Prior accident years’ events		(200	)		112
Total incurred losses and loss adjustment expenses		10,696			9,899
Paid losses and loss adjustment expenses:
Current accident year events		(3,175	)		(3,123	)
Prior accident years’ events		(6,841	)		(5,884	)
Total payments		(10,016	)		(9,007	)
Foreign currency translation adjustment		(372	)		81
Balances – March 31:
Net liabilities		70,472			66,371
Reinsurance recoverable on unpaid losses		2,890			3,164
Gross liabilities	$	73,362		$	69,535

Incurred losses and loss adjustment expenses in the preceding table were recorded in earnings in each period and related to insured events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident years”). We recorded a net reduction of estimated ultimate liabilities for prior accident years of $200 million in 2020 compared to a net increase of $112 million in 2019 which produced a corresponding reduction and increase, respectively, in incurred losses and loss adjustment expenses. These reductions/increases, as percentages of the net liabilities at the beginning of each year, were 0.3% in 2020 and 0.2% in 2019.

Estimated ultimate liabilities for prior years’ loss events related to primary insurance were reduced by $172 million in 2020 and $100 million in 2019. The decrease in 2020 was primarily attributable to lower than anticipated private passenger automobile and medical professional liability claims. The decrease in 2019 primarily derived from private passenger automobile, medical professional liability and workers’ compensation claims partially offset by higher other liability losses. Estimated ultimate liabilities for prior years’ loss events related to property and casualty reinsurance were reduced by $28 million in 2020 and increased by $212 million in 2019.