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 17), for each of the three years ending December 31, 2021 is as follows (in millions).

	2021			2020			2019
Balances at beginning of year:
Gross liabilities	$	79,854		$	73,019		$	68,458
Reinsurance recoverable on unpaid losses		(2,912	)		(2,855	)		(3,060	)
Net liabilities		76,942			70,164			65,398
Incurred losses and loss adjustment expenses:
Current accident year		52,099			43,400			43,335
Prior accident years		(3,116	)		(356	)		(752	)
Total		48,983			43,044			42,583
Paid losses and loss adjustment expenses:
Current accident year		(22,897	)		(17,884	)		(19,482	)
Prior accident years		(18,904	)		(18,862	)		(17,642	)
Total		(41,801	)		(36,746	)		(37,124	)
Foreign currency effect		(420	)		480			(23	)
Business acquisition (disposition)		—			—			(670	)
Balances at December 31:
Net liabilities		83,704			76,942			70,164
Reinsurance recoverable on unpaid losses		2,960			2,912			2,855
Gross liabilities	$	86,664		$	79,854		$	73,019

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”). Incurred and paid losses and loss adjustment expenses are net of reinsurance recoveries. Current accident year incurred losses included approximately $2.9 billion in 2021, $950 million in 2020 and $1.0 billion in 2019 from significant catastrophe events (losses in excess of $100 million per event) occurring in the respective year. Current accident year incurred losses from private passenger auto insurance also increased significantly in 2021 as compared to 2020, primarily due to increased claims frequencies and severities. In 2020, current accident year incurred losses reflected low private passenger auto 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 $3.1 billion in 2021, $356 million in 2020 and $752 million in 2019, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods. These reductions, as percentages of the net liabilities at the beginning of each year, were 4.0% in 2021, 0.5% in 2020 and 1.1% in 2019.

Estimated ultimate liabilities for prior accident years from primary insurance were reduced by $2.4 billion in 2021, $518 million in 2020 and $457 million in 2019. The reductions in 2021 and 2020 derived primarily from private passenger auto and medical professional liability claims. In both 2021 and 2020, we also lowered estimated ultimate liabilities for prior accident years with respect to workers’ compensation claims, which were largely offset by increases in ultimate liabilities for other casualty claims. The decrease in incurred losses for prior accident years in 2019 reflected reductions in medical professional liability and workers’ compensation estimates partially offset by higher other casualty estimates. Estimated ultimate liabilities for prior accident years related to property and casualty reinsurance decreased $718 million in 2021, increased $162 million in 2020 and decreased $295 million in 2019. The increase in 2020 included increased claims estimates for legacy casualty exposures.

Estimated net claim liabilities for environmental, asbestos and other latent injury exposures were approximately $2.1 billion at December 31, 2021 and 2020. 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 year 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, 2021 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.

Claim estimates for liability coverages normally reflect greater uncertainty than physical damage coverages, primarily due to the longer claim-tails, the greater chance of litigation and the time needed to evaluate facts at the time the case estimate is first established. The “claim-tail” is the period between the claim occurrence date and claim settlement or payment 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 net incurred and paid auto physical damage and liability losses and ALAE are summarized by accident year below. IBNR and case development liabilities are as of December 31, 2021. 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 auto policy coverages. Dollars are in millions.

	Incurred Losses and ALAE through December 31,												Cumulative Number of
Accident Year	2017*		2018*		2019*		2020*		2021		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2017	$	14,095	$	13,864	$	13,888	$	13,824	$	13,777	$	232		2,646
2018				15,383		15,226		14,985		14,838		495		2,713
2019						16,901		16,678		16,191		1,202		2,778
2020								14,637		14,024		2,564		2,087
2021										17,481		5,541		2,216
	Incurred losses and ALAE								$	76,311

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2017*		2018*		2019*		2020*		2021
2017	$	5,806	$	9,944	$	11,799	$	12,729	$	13,260
2018				6,218		10,772		12,658		13,757
2019						6,742		11,671		13,851
2020								5,395		9,839
2021										6,450
	Paid losses and ALAE									57,157
	Net unpaid losses and ALAE for 2017 – 2021 accident years									19,154
	Net unpaid losses and ALAE for accident years before 2017									614
	Net unpaid losses and ALAE								$	19,768

BH Primary’s liabilities for unpaid losses and loss adjustment expenses primarily derive from medical professional liability and workers’ compensation and other casualty insurance, which includes commercial auto and general liability insurance. Net 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, 2021. 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 developments based upon claim age, coverage and litigation experience.

	Incurred Losses and ALAE through December 31,																						Cumulative Number of
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2012	$	1,336	$	1,306	$	1,277	$	1,223	$	1,168	$	1,078	$	1,035	$	998	$	988	$	971	$	51		11
2013				1,328		1,296		1,261		1,195		1,127		1,086		1,019		985		978		62		11
2014						1,370		1,375		1,305		1,246		1,218		1,127		1,061		1,033		108		11
2015								1,374		1,342		1,269		1,290		1,218		1,157		1,093		136		12
2016										1,392		1,416		1,414		1,394		1,341		1,288		213		15
2017												1,466		1,499		1,495		1,474		1,382		328		21
2018														1,602		1,650		1,659		1,580		495		23
2019																1,670		1,691		1,663		869		20
2020																		1,704		1,751		1,319		27
2021																				1,852		1,672		15
	Incurred losses and ALAE																		$	13,591

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021
2012	$	15	$	93	$	218	$	377	$	522	$	642	$	725	$	789	$	830	$	848
2013				15		90		219		368		518		635		743		793		821
2014						21		106		238		396		540		671		752		788
2015								23		108		218		382		543		663		719
2016										22		115		274		461		620		712
2017												27		128		300		457		582
2018														35		166		367		543
2019																39		160		314
2020																		34		148
2021																				36
	Paid losses and ALAE																			5,511
	Net unpaid losses and ALAE for 2012 – 2021 accident years																			8,080
	Net unpaid losses and ALAE for accident years before 2012																			426
	Net unpaid losses and ALAE																		$	8,506

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	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2012	$	873	$	850	$	837	$	791	$	780	$	762	$	750	$	736	$	718	$	709	$	39		53
2013				1,258		1,228		1,178		1,127		1,096		1,072		1,050		1,028		1,008		96		67
2014						1,743		1,638		1,614		1,548		1,482		1,497		1,477		1,460		163		90
2015								2,169		2,127		2,042		2,014		2,025		1,997		2,006		242		111
2016										2,511		2,422		2,359		2,325		2,365		2,370		396		115
2017												3,044		2,907		2,842		2,843		2,852		503		139
2018														3,544		3,412		3,480		3,536		908		160
2019																4,074		4,102		4,175		1,278		173
2020																		4,421		4,278		2,089		141
2021																				5,197		3,545		218
	Incurred losses and ALAE																		$	27,591

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021
2012	$	116	$	299	$	414	$	501	$	560	$	592	$	611	$	626	$	634	$	640
2013				177		422		609		725		793		835		858		874		884
2014						239		557		800		1,007		1,111		1,176		1,214		1,245
2015								289		700		1,017		1,289		1,488		1,570		1,648
2016										329		775		1,148		1,461		1,661		1,778
2017												441		1,003		1,434		1,771		1,956
2018														538		1,198		1,683		2,028
2019																682		1,478		2,022
2020																		695		1,391
2021																				833
	Paid losses and ALAE																			14,425
	Net unpaid losses and ALAE for 2012 – 2021 accident years																			13,166
	Net unpaid losses and ALAE for accident years before 2012																			413
	Net unpaid losses and ALAE																		$	13,579

We use a variety of methodologies to establish BHRG’s estimates for property and casualty claims liabilities. These methodologies include 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.

Net 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. IBNR and case development liabilities are as of December 31, 2021. Dollars are in millions.

	Incurred Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021		IBNR and Case Development Liabilities
2012	$	3,129	$	2,822	$	2,621	$	2,382	$	2,330	$	2,327	$	2,309	$	2,294	$	2,285	$	2,305	$	31
2013				3,198		3,035		2,690		2,600		2,579		2,520		2,469		2,455		2,453		29
2014						2,619		2,408		2,297		2,154		2,100		2,028		1,999		1,996		33
2015								3,256		3,103		2,546		2,950		2,948		2,971		2,975		154
2016										3,261		3,890		3,616		3,585		3,589		3,578		112
2017												5,253		4,953		4,806		4,698		4,631		141
2018														4,375		4,467		4,344		4,227		461
2019																4,065		4,234		3,992		541
2020																		5,795		6,048		1,504
2021																				6,669		3,405
Incurred losses and ALAE																			$	38,874

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021
2012	$	259	$	1,218	$	1,796	$	1,934	$	2,022	$	2,097	$	2,117	$	2,162	$	2,180	$	2,201
2013				515		1,424		1,863		2,060		2,180		2,260		2,300		2,328		2,352
2014						465		1,234		1,555		1,693		1,758		1,808		1,838		1,860
2015								577		1,596		1,946		2,141		2,245		2,427		2,510
2016										705		1,794		2,186		2,647		2,899		3,083
2017												1,025		2,712		3,633		3,944		4,163
2018														907		2,310		2,831		3,061
2019																748		2,247		2,830
2020																		956		2,882
2021																				1,214
Paid losses and ALAE																				26,156
Net unpaid losses and ALAE for 2012 – 2021 accident years																				12,718
Net unpaid losses and ALAE for accident years before 2012																			401
Net unpaid losses and ALAE																			$	13,119

	Incurred Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021		IBNR and Case Development Liabilities
2012	$	2,792	$	2,974	$	2,808	$	2,871	$	2,799	$	2,686	$	2,619	$	2,562	$	2,556	$	2,557	$	372
2013				2,132		2,268		2,298		2,141		2,086		2,032		1,937		1,865		1,837		331
2014						1,872		2,069		2,038		2,001		1,915		1,952		1,942		1,847		431
2015								1,877		2,082		2,109		2,008		1,882		1,844		1,817		395
2016										1,906		2,115		2,023		1,980		1,900		1,843		451
2017												2,193		2,685		2,563		2,470		2,383		582
2018														2,924		3,559		3,482		3,340		904
2019																3,429		3,901		3,780		1,521
2020																		3,861		3,987		2,147
2021																				3,744		2,584
	Incurred losses and ALAE																		$	27,135

	Cumulative Paid Losses and ALAE through December 31,
Accident Year	2012*		2013*		2014*		2015*		2016*		2017*		2018*		2019*		2020*		2021
2012	$	308	$	747	$	1,139	$	1,368	$	1,525	$	1,650	$	1,750	$	1,810	$	1,868	$	1,906
2013				290		519		805		933		1,037		1,139		1,199		1,256		1,290
2014						149		477		642		752		874		959		1,103		1,147
2015								196		489		713		833		924		1,014		1,088
2016										253		555		732		862		960		1,043
2017												230		564		819		1,269		1,376
2018														265		867		1,639		1,909
2019																353		896		1,176
2020																		404		970
2021																				307
	Paid losses and ALAE																			12,212
	Net unpaid losses and ALAE for 2012 – 2021 accident years																			14,923
	Net unpaid losses and ALAE for accident years before 2012																			8,688
	Net unpaid losses and ALAE																		$	23,611

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.