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 16), for each of the three years ending December 31, 2020 is as follows (in millions).

	2020			2019			2018
Balances at beginning of year:
Gross liabilities	$	73,019		$	68,458		$	61,122
Reinsurance recoverable on unpaid losses		(2,855	)		(3,060	)		(3,201	)
Net liabilities		70,164			65,398			57,921
Incurred losses and loss adjustment expenses:
Current accident year events		43,400			43,335			39,876
Prior accident years’ events		(356	)		(752	)		(1,406	)
Total		43,044			42,583			38,470
Paid losses and loss adjustment expenses:
Current accident year events		(17,884	)		(19,482	)		(18,391	)
Prior accident years’ events		(18,862	)		(17,642	)		(15,452	)
Total		(36,746	)		(37,124	)		(33,843	)
Foreign currency translation adjustment		480			(23	)		(331	)
Business acquisition (disposition)		—			(670	)		3,181
Balances at December 31:
Net liabilities		76,942			70,164			65,398
Reinsurance recoverable on unpaid losses		2,912			2,855			3,060
Gross liabilities	$	79,854		$	73,019		$	68,458

Incurred losses and loss adjustment expenses shown in the preceding table were recorded in earnings and related to insured events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident years”). Current accident year losses included approximately $950 million in 2020, $1.0 billion in 2019 and $1.6 billion in 2018 from significant catastrophe events occurring in each year. Current accident year losses in 2020 also reflected the effects of low private passenger automobile claims frequencies and increased loss estimates for certain commercial insurance and reinsurance business attributable to the COVID-19 pandemic.

We recorded net reductions of estimated ultimate liabilities for prior accident years of $356 million in 2020, $752 million in 2019 and $1,406 million in 2018, which produced corresponding reductions in incurred losses and loss adjustment expenses. These reductions, as percentages of the net liabilities at the beginning of each year, were 0.5% in 2020, 1.1% in 2019 and 2.4% in 2018.

Estimated ultimate liabilities for prior years’ loss events related to primary insurance were reduced by $518 million in 2020, $457 million in 2019 and $937 million in 2018. The decrease in 2020 was primarily attributable to reductions for private passenger automobile, medical professional liability and workers’ compensation claims, partly offset by increases for other casualty claims. The decrease in 2019 reflected reductions in medical professional liability and workers’ compensation claims, partially offset by higher commercial auto and other liability claims. The decrease in 2018 was primarily due to reductions for workers’ compensation, medical professional liability and private passenger automobile claims. Estimated ultimate liabilities for prior years’ loss events related to property and casualty reinsurance increased $162 million in 2020 and were reduced $295 million in 2019 and $469 million in 2018. The increase in 2020 included increased claims estimates for legacy casualty exposures.

Estimated claim liabilities included amounts for environmental, asbestos and other latent injury exposures, net of reinsurance recoverable, of approximately $2.1 billion at December 31, 2020 and $1.7 billion at December 31, 2019. These liabilities are subject to change due to changes in the legal and regulatory environment. We are unable to reliably estimate additional losses or a range of losses that are reasonably possible for these claims.

Disaggregated information concerning our claims liabilities is provided below and in the pages that follow. The effects of businesses acquired or disposed during the period are reflected in the data presented on a retrospective basis. 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, 2020 follows (in millions).

GEICO’s claim liabilities predominantly relate to various types of private passenger auto liability and physical damage claims. For such claims, we establish and evaluate unpaid claim liabilities using standard actuarial loss development methods and techniques. The actuarial methods utilize historical claims data, adjusted when deemed appropriate to reflect perceived changes in loss patterns. Claim liabilities include average, case, case development and IBNR estimates.

We establish average liabilities based on expected severities for newly reported physical damage and liability claims prior to establishing individual case reserves when insufficient time or information is available for specific claim estimates and for large volumes of minor physical damage claims that once reported are quickly settled. We establish case loss estimates for liability claims, including estimates for loss adjustment expenses, as the facts and merits of the claim are evaluated.

Estimates for liability coverages are more uncertain than for physical damage coverages, primarily due to the longer claim-tails, the greater chance of protracted litigation and the incompleteness of facts at the time the case estimate is first established. The “claim-tail” is the time period between the claim occurrence date and settlement date. Consequently, we establish additional case development liabilities, which are usually percentages of the case liabilities. For unreported claims, IBNR liabilities are estimated by projecting the ultimate number of claims expected (reported and unreported) for each significant coverage and deducting reported claims to produce estimated unreported claims. The product of the average cost per unreported claim and the number of unreported claims produces the IBNR liability estimate. We may record supplemental IBNR liabilities in certain situations when actuarial techniques are difficult to apply.

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, 2020. 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.

	Incurred Losses and ALAE through December 31,												Cumulative Number of
Accident Year	2016*		2017*		2018*		2019*		2020		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2016	$	11,800	$	12,184	$	12,149	$	12,178	$	12,198	$	222		2,451
2017				14,095		13,864		13,888		13,824		502		2,639
2018						15,383		15,226		14,985		1,163		2,702
2019								16,901		16,678		2,905		2,749
2020										14,637		4,482		1,945
	Incurred losses and ALAE								$	72,322

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2016*		2017*		2018*		2019*		2020
2016	$	5,069	$	8,716	$	10,330	$	11,294	$	11,718
2017				5,806		9,944		11,799		12,729
2018						6,218		10,772		12,658
2019								6,742		11,671
2020										5,395
	Paid losses and ALAE									54,171
	Net unpaid losses and ALAE for 2016 – 2020 accident years									18,151
	Net unpaid losses and ALAE for accident years before 2016									604
	Net unpaid losses and ALAE								$	18,755

BH Primary’s liabilities for unpaid losses and loss adjustment expenses primarily derive from medical professional liability and workers’ compensation and other casualty insurance, including commercial auto and general liability insurance. Incurred and paid losses and ALAE are summarized by accident year in the following tables, disaggregated by medical professional liability coverages and workers’ compensation and other casualty coverages. IBNR and case development liabilities are as of December 31, 2020. The cumulative number of reported claims reflects the number of individual claimants and includes claims that ultimately resulted in no liability or payment. Dollars are in millions.

We estimate the ultimate expected incurred losses and loss adjustment expenses for medical professional claim liabilities using a variety of commonly accepted actuarial methodologies, such as the paid and incurred development method and Bornhuetter-Ferguson based methods, as well as other techniques that consider insured loss exposures and historical and expected loss trends, among other factors. These methodologies produce loss estimates from which we determine our best estimate. In addition, 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	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2011	$	1,346	$	1,334	$	1,321	$	1,262	$	1,173	$	1,115	$	1,050	$	1,004	$	968	$	972	$	39		11
2012				1,336		1,306		1,277		1,223		1,168		1,078		1,035		998		988		53		11
2013						1,328		1,296		1,261		1,195		1,127		1,086		1,019		985		65		11
2014								1,370		1,375		1,305		1,246		1,218		1,127		1,061		129		11
2015										1,374		1,342		1,269		1,290		1,218		1,157		202		12
2016												1,392		1,416		1,414		1,394		1,341		286		14
2017														1,466		1,499		1,495		1,474		494		20
2018																1,602		1,650		1,659		780		22
2019																		1,670		1,691		1,204		17
2020																				1,704		1,529		13
	Incurred losses and ALAE																		$	13,032

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020
2011	$	16	$	82	$	200	$	356	$	517	$	632	$	711	$	767	$	822	$	842
2012				15		93		218		377		522		642		725		789		830
2013						15		90		219		368		518		635		743		793
2014								21		106		238		396		540		671		752
2015										23		108		218		382		543		663
2016												22		115		274		461		620
2017														27		128		300		457
2018																35		166		367
2019																		39		160
2020																				34
	Paid losses and ALAE																			5,518
	Net unpaid losses and ALAE for 2011– 2020 accident years																			7,514
	Net unpaid losses and ALAE for accident years before 2011																			383
	Net unpaid losses and ALAE																		$	7,897

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	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2011	$	738	$	675	$	675	$	624	$	621	$	618	$	607	$	596	$	591	$	576	$	39		46
2012				873		850		837		791		780		762		750		736		718		53		53
2013						1,258		1,228		1,178		1,127		1,096		1,072		1,050		1,028		120		67
2014								1,743		1,638		1,614		1,548		1,482		1,497		1,477		190		90
2015										2,169		2,127		2,042		2,014		2,025		1,997		267		111
2016												2,511		2,422		2,359		2,325		2,365		470		115
2017														3,044		2,907		2,842		2,843		691		138
2018																3,544		3,412		3,480		1,152		160
2019																		4,074		4,102		1,788		170
2020																				4,421		2,987		120
	Incurred losses and ALAE																		$	23,007

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020
2011	$	109	$	220	$	333	$	403	$	453	$	481	$	496	$	505	$	512	$	519
2012				116		299		414		501		560		592		611		626		634
2013						177		422		609		725		793		835		858		874
2014								239		557		800		1,007		1,111		1,176		1,214
2015										289		700		1,017		1,289		1,488		1,570
2016												329		775		1,148		1,461		1,661
2017														441		1,003		1,434		1,771
2018																538		1,198		1,683
2019																		682		1,478
2020																				695
	Paid losses and ALAE																			12,099
	Net unpaid losses and ALAE for 2011 – 2020 accident years																			10,908
	Net unpaid losses and ALAE for accident years before 2011																			386
	Net unpaid losses and ALAE																		$	11,294

We use a variety of methodologies to establish BHRG’s estimates for property and casualty claims liabilities. We use certain methodologies, such as paid and incurred loss development techniques, incurred and paid loss Bornhuetter-Ferguson techniques and frequency and severity techniques, as well as ground-up techniques when appropriate.

Our claims liabilities are principally a function of reported losses from ceding companies, case development and IBNR liability estimates. Case loss estimates are reported under our contracts either individually or in bulk as provided under the terms of the contracts. We may independently evaluate case losses reported by the ceding company, and if deemed appropriate, we may establish case liabilities based on our estimates.

Estimated IBNR liabilities are affected by expected case loss emergence patterns and expected loss ratios, which are evaluated as groups of contracts with similar exposures or on a contract-by-contract basis. Estimated case and IBNR liabilities for major catastrophe events are generally based on a per-contract assessment of the ultimate cost associated with the individual loss event. Claim count data is not provided consistently by ceding companies under our contracts or is otherwise considered unreliable.

Incurred and paid losses and ALAE of BHRG are disaggregated based on losses that are expected to have shorter claim-tails (property) and losses expected to have longer claim-tails (casualty). Under certain contracts, the coverage can apply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the ceding company may not report loss data by such lines consistently, if at all. In those instances, we allocated losses to property and casualty coverages based on internal estimates. 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, 2020. Dollars are in millions.

	Incurred Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020		IBNR and Case Development Liabilities
2011	$	4,111	$	4,095	$	3,804	$	3,711	$	3,707	$	3,672	$	3,654	$	3,638	$	3,627	$	3,616	$	30
2012				3,153		2,846		2,644		2,403		2,351		2,348		2,329		2,315		2,305		35
2013						3,255		3,093		2,745		2,653		2,631		2,570		2,518		2,504		45
2014								2,648		2,436		2,322		2,178		2,123		2,050		2,021		48
2015										3,287		3,135		2,577		2,979		2,976		3,000		143
2016												3,293		3,923		3,646		3,614		3,616		218
2017														5,291		4,986		4,837		4,727		187
2018																4,426		4,524		4,397		678
2019																		4,146		4,299		952
2020																				5,858		3,129
Incurred losses and ALAE																			$	36,343

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020
2011	$	609	$	2,259	$	2,917	$	3,188	$	3,304	$	3,387	$	3,429	$	3,474	$	3,493	$	3,507
2012				262		1,232		1,813		1,950		2,040		2,117		2,135		2,181		2,199
2013						526		1,459		1,906		2,105		2,226		2,307		2,347		2,376
2014								467		1,249		1,574		1,713		1,779		1,829		1,858
2015										581		1,614		1,969		2,166		2,271		2,453
2016												709		1,811		2,208		2,670		2,923
2017														1,028		2,734		3,660		3,972
2018																915		2,341		2,868
2019																		751		2,282
2020																				960
Paid losses and ALAE																				25,398
Net unpaid losses and ALAE for 2011 – 2020 accident years																				10,945
Net unpaid losses and ALAE for accident years before 2011																			335
Net unpaid losses and ALAE																			$	11,280

	Incurred Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020		IBNR and Case Development Liabilities
2011	$	2,635	$	2,726	$	2,595	$	2,536	$	2,447	$	2,354	$	2,346	$	2,307	$	2,272	$	2,255	$	279
2012				2,820		3,002		2,837		2,899		2,827		2,712		2,645		2,588		2,581		317
2013						2,160		2,298		2,328		2,170		2,114		2,060		1,964		1,892		387
2014								1,900		2,099		2,068		2,030		1,944		1,980		1,970		537
2015										1,902		2,109		2,137		2,035		1,908		1,870		455
2016												1,928		2,138		2,047		2,003		1,922		555
2017														2,216		2,711		2,588		2,494		762
2018																2,948		3,585		3,509		1,183
2019																		3,455		3,931		1,924
2020																				3,883		2,754
	Incurred losses and ALAE																		$	26,307

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2011*		2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020
2011	$	294	$	824	$	1,169	$	1,412	$	1,501	$	1,595	$	1,673	$	1,713	$	1,748	$	1,776
2012				312		757		1,150		1,381		1,539		1,664		1,764		1,825		1,883
2013						294		530		818		947		1,052		1,155		1,215		1,273
2014								153		488		655		765		889		974		1,119
2015										199		500		725		846		938		1,029
2016												255		563		742		874		972
2017														233		574		830		1,282
2018																267		875		1,649
2019																		356		906
2020																				406
	Paid losses and ALAE																			12,295
	Net unpaid losses and ALAE for 2011 – 2020 accident years																			14,012
	Net unpaid losses and ALAE for accident years before 2011																			8,878
	Net unpaid losses and ALAE																		$	22,890

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		97	%		2	%
GEICO Auto Liability		42	%		29	%		13	%		7	%		4	%
BH Primary Medical Professional Liability		2	%		7	%		12	%		14	%		14	%		12	%		9	%		6	%		5	%		2	%
BH Primary Workers’ Compensation and Other Casualty		16	%		21	%		16	%		13	%		8	%		4	%		3	%		2	%		1	%		1	%
BHRG Property		19	%		37	%		17	%		8	%		4	%		4	%		1	%		2	%		1	%		0	%
BHRG Casualty		11	%		16	%		14	%		9	%		5	%		5	%		5	%		2	%		2	%		1	%