Liability for Policy and Contract Claims (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Liability for Policy and Contract Claims

The following table sets forth our liability for policy and contract claims as of December 31:


(Amounts in millions)	2017		2016
Liability for policy and contract claims for insurance lines other than short-duration contracts:
Long-term care insurance	$	8,548	$	8,034
Life insurance		244		226
Fixed annuities		24		16
Runoff		11		15

Total		8,827		8,291

Liability for policy and contract claims, net of reinsurance, related to short-duration contracts:
U.S. Mortgage Insurance segment		454		633
Australia Mortgage Insurance segment		218		211
Canada Mortgage Insurance segment		87		112
Other mortgage insurance businesses		7		7

Total		766		963

Reinsurance recoverable on unpaid claims related to short-duration contracts:
U.S. Mortgage Insurance segment		1		2

Total		1		2

Total liability for policy and contract claims	$	9,594	$	9,256

Schedule of Incurred Claims Net of Reinsurance, Cummulative Number of Reported Delinquencies, Total Incurred But Not Reported

The following table sets forth information about incurred claims, net of reinsurance, as well as cumulative number of reported delinquencies and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our U.S. Mortgage Insurance segment as of December 31, 2017. The information about the incurred claims development for the years ended December 31, 2008 to 2016 and the historical reported delinquencies as of December 31, 2016 and prior are presented as supplementary information.


	Incurred claims and allocated claim adjustment expenses, net of reinsurance																				Total of Incurred-But- Not-Reported liabilities including expected development on reported claims as of December 31, 2017		Number of reported delinquencies⁽²⁾
(Dollar amounts in millions)	For the years ended December 31,
Accident year ⁽¹⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	943		1,041		1,211		1,339	$	1,353	$	1,347	$	1,376	$	1,385	$	1,391	$	1,396	$	1		133,491
2009		—		1,341		1,697		1,762		1,755		1,752		1,782		1,792		1,799		1,802		1		151,732
2010		—		—		977		1,157		1,139		1,146		1,165		1,173		1,173		1,174		1		90,231
2011		—		—		—		910		931		913		929		938		939		939		1		68,984
2012		—		—		—		—		718		675		671		673		671		668		—		48,170
2013		—		—		—		—		—		475		407		392		387		384		—		33,934
2014		—		—		—		—		—		—		328		288		269		261		—		26,080
2015		—		—		—		—		—		—		—		235		208		187		—		20,915
2016		—		—		—		—		—		—		—		—		198		160		1		17,423
2017		—		—		—		—		—		—		—		—		—		171		19		15,097

Total incurred																			$	7,142

⁽¹⁾	Represents the year in which first monthly mortgage payments have been missed by the borrower.

⁽²⁾	Represents reported and outstanding delinquencies less actual cures as of December 31 for each respective accident year.

The following table sets forth information about incurred claims, as well as cumulative number of reported delinquencies and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our Canada Mortgage Insurance segment as of December 31, 2017. The information about the incurred claims development for the years ended December 31, 2008 to 2016 and the historical reported delinquencies as of December 31, 2016 and prior are presented as supplementary information.


	Incurred claims and allocated claim adjustment expenses																				Total of Incurred-But- Not-Reported liabilities including expected development on reported claims as of December 31, 2017⁽³⁾		Number of reported delinquencies⁽⁴⁾
(Dollar amounts in millions)⁽¹⁾	For the years ended December 31,
Accident year⁽²⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	108	$	149	$	152	$	155	$	158	$	158	$	158	$	158	$	158	$	158	$	—		6,138
2009		—		151		169		191		194		196		196		195		195		195		—		6,702
2010		—		—		135		149		167		169		168		167		168		167		—		6,601
2011		—		—		—		133		149		151		151		150		150		149		—		5,707
2012		—		—		—		—		111		110		109		108		108		108		—		5,316
2013		—		—		—		—		—		102		98		97		97		96		—		4,949
2014		—		—		—		—		—		—		91		87		85		84		—		4,948
2015		—		—		—		—		—		—		—		101		91		87		—		4,626
2016		—		—		—		—		—		—		—		—		119		103		—		5,133
2017		—		—		—		—		—		—		—		—		—		78		26		3,785

Total incurred																			$	1,225

⁽¹⁾	Amounts translated into U.S. dollars at the average foreign exchange rates for the year ended December 31, 2017.

⁽²⁾	Represents the year in which first monthly mortgage payments have been missed by the borrower.

⁽³⁾	Incurred-but-not-reported liabilities exist only relative to the year 2017 as lenders are required to report losses after three consecutive monthly mortgage payments have been missed by the borrower.

⁽⁴⁾	Represents reported delinquencies as of December 31 for each respective accident year.

The following table sets forth information about incurred claims, as well as cumulative number of reported delinquencies and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our Australia Mortgage Insurance segment as of December 31, 2017. The information about the incurred claims development for the years ended December 31, 2008 to 2016 and the historical reported delinquencies as of December 31, 2016 and prior are presented as supplementary information.


	Incurred claims and allocated claim adjustment expenses																				Total of Incurred-But- Not-Reported liabilities including expected development on reported claims as of December 31, 2017		Number of reported delinquencies⁽³⁾
(Dollar amounts in millions)⁽¹⁾	For the years ended December 31,
Accident year⁽²⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	74	$	158	$	153	$	155	$	172	$	176	$	179	$	177	$	178	$	178	$	—		9,197
2009		—		71		109		101		122		127		130		133		135		136		—		8,868
2010		—		—		74		111		138		140		142		143		143		145		—		8,683
2011		—		—		—		98		142		132		127		127		127		128		—		9,321
2012		—		—		—		—		88		108		90		88		86		87		—		7,595
2013		—		—		—		—		—		82		84		69		63		62		—		7,087
2014		—		—		—		—		—		—		80		92		76		71		—		7,463
2015		—		—		—		—		—		—		—		88		119		96		1		7,606
2016		—		—		—		—		—		—		—		—		106		141		14		8,020
2017		—		—		—		—		—		—		—		—		—		95		36		4,001

Total incurred																			$	1,139

⁽¹⁾	Amounts translated into U.S. dollars at the average foreign exchange rates for the year ended December 31, 2017.

⁽²⁾	The accident year is estimated by allowing an additional five months for development from the time the first monthly mortgage payments have been missed by the borrower.

⁽³⁾	Represents reported and outstanding delinquencies less actual cures as of December 31 for each respective accident year.

Schedule of Average Payout of Incurred Claims by Age

The following table sets forth our average payout of incurred claims by age for our U.S. Mortgage Insurance segment as of December 31, 2017:


	Average annual percentage payout of incurred claims, net of reinsurance, by age
Years	1			2			3			4			5			6			7			8			9			10
Percentage of payout		8.9	%		39.2	%		24.3	%		10.9	%		6.2	%		4.1	%		3.1	%		2.6	%		1.8	%		1.6	%

The following table sets forth our average payout of incurred claims by age for our Canada Mortgage Insurance segment as of December 31, 2017:


	Average annual percentage payout of incurred claims, by age
Years	1			2			3			4			5			6			7			8			9			10
Percentage of payout		17.9	%		62.4	%		16.6	%		2.5	%		0.1	%		0.2	%		(0.3	)%		0.1	%		—	%		—	%

The following table sets forth our average payout of incurred claims by age for our Australia Mortgage Insurance segment as of December 31, 2017:


	Average annual percentage payout of incurred claims, by age
Years	1			2			3			4			5			6			7			8			9			10
Percentage of payout		5.4	%		34.0	%		32.5	%		16.2	%		7.1	%		2.7	%		1.6	%		0.8	%		0.7	%		0.4	%

Schedule of Paid Claims Deveopment, Net of Reinsurance

The following table sets forth paid claims development, net of reinsurance, for our U.S. mortgage insurance segment for the year ended December 31, 2017. The information about paid claims development for the years ended December 31, 2008 to 2016, is presented as supplementary information.


(Amounts in millions)	Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
Accident year ⁽¹⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	66	$	572	$	917	$	1,046	$	1,145	$	1,217	$	1,271	$	1,322	$	1,353	$	1,375
2009		—		285		940		1,245		1,434		1,556		1,638		1,709		1,753		1,777
2010		—		—		140		567		844		973		1,049		1,109		1,139		1,158
2011		—		—		—		65		497		722		816		874		906		927
2012		—		—		—		—		92		391		532		602		634		650
2013		—		—		—		—		—		44		202		297		340		362
2014		—		—		—		—		—		—		22		127		195		233
2015		—		—		—		—		—		—		—		12		85		145
2016		—		—		—		—		—		—		—		—		10		64
2017		—		—		—		—		—		—		—		—		—		6

Total paid																			$	6,697

Total incurred																			$	7,142
Total paid																				6,697
All outstanding liabilities before 2008, net of reinsurance																				9

Liability for policy and contract claims, net of reinsurance																			$	454

⁽¹⁾	Represents the year in which first monthly mortgage payments have been missed by the borrower.

The following table sets forth paid claims development, for our Canada Mortgage Insurance segment for the year ended December 31, 2017. The information about paid claims development for the years ended December 31, 2008 to 2016, is presented as supplementary information.


(Amounts in millions) ⁽¹⁾	Cumulative paid claims and allocated claim adjustment expenses
Accident year ⁽²⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	8	$	107	$	148	$	158	$	160	$	163	$	163	$	163	$	163	$	163
2009		—		24		127		185		193		195		195		194		194		194
2010		—		—		27		122		164		168		167		167		167		167
2011		—		—		—		37		133		150		150		150		149		148
2012		—		—		—		—		24		99		106		107		107		107
2013		—		—		—		—		—		25		87		95		97		96
2014		—		—		—		—		—		—		17		73		82		84
2015		—		—		—		—		—		—		—		19		74		86
2016		—		—		—		—		—		—		—		—		17		81
2017		—		—		—		—		—		—		—		—		—		13

Total paid																			$	1,139

Total incurred																			$	1,225
Total paid																				1,139
Other ⁽³⁾																				1
All outstanding liabilities before 2008																				—

Liability for policy and contract claims																			$	87

⁽¹⁾	Amounts translated into U.S. dollars at the average foreign exchange rates for the year ended December 31, 2017.

⁽²⁾	Represents the year in which first monthly mortgage payments have been missed by the borrower.

⁽³⁾	Includes the portion of the borrower recovery accrual that corresponds to loss reserves and is recognized as a reduction to losses incurred that we anticipate to receive in the future once the claims have been settled, and foreign currency translation.

The following table sets forth paid claims development, for our Australia Mortgage Insurance segment for the year ended December 31, 2017. The information about paid claims development for the years ended December 31, 2008 to December 31, 2016, is presented as supplementary information:


(Amounts in millions) ⁽¹⁾	Cumulative paid claims and allocated claim adjustment expenses
Accident year ⁽²⁾	2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
	Unaudited
2008	$	3	$	51	$	118	$	141	$	167	$	174	$	176	$	177	$	178	$	180
2009		—		2		30		61		108		124		128		132		134		136
2010		—		—		2		25		104		128		136		139		141		143
2011		—		—		—		2		64		106		119		123		126		128
2012		—		—		—		—		5		55		73		80		83		86
2013		—		—		—		—		—		4		29		47		54		60
2014		—		—		—		—		—		—		3		27		47		63
2015		—		—		—		—		—		—		—		3		30		69
2016		—		—		—		—		—		—		—		—		3		54
2017		—		—		—		—		—		—		—		—		—		7

Total paid																			$	926

Total incurred																			$	1,139
Total paid																				926
Other ⁽³⁾																				5
All outstanding liabilities before 2008																				—

Liability for policy and contract claims																			$	218

⁽¹⁾	Amounts translated into U.S. dollars at the average foreign exchange rates for the year ended December 31, 2017.

⁽²⁾	The accident year is estimated by allowing an additional five months for development from the time the first monthly mortgage payments have been missed by the borrower.

⁽³⁾	Includes foreign currency translation.

Long-term Care Insurance

Changes in Liability for Policy and Contract Claims

The following table sets forth changes in the liability for policy and contract claims for our long-term care insurance business for the dates indicated:


(Amounts in millions)	2017			2016			2015
Beginning balance as of January 1	$	8,034		$	6,749		$	6,216
Less reinsurance recoverables		(2,310	)		(2,055	)		(1,926	)

Net balance as of January 1		5,724			4,694			4,290

Incurred related to insured events of:
Current year		2,234			2,066			1,655
Prior years		(183	)		377			39

Total incurred		2,051			2,443			1,694

Paid related to insured events of:
Current year		(176	)		(166	)		(151	)
Prior years		(1,644	)		(1,506	)		(1,371	)

Total paid		(1,820	)		(1,672	)		(1,522	)

Interest on liability for policy and contract claims		301			259			232

Net balance as of December 31		6,256			5,724			4,694
Add reinsurance recoverables		2,292			2,310			2,055

Ending balance as of December 31	$	8,548		$	8,034		$	6,749