POLICY LIABILITIES

Changes in the liability for unpaid policy claims were as follows:



	Three Months Ended June 30,							Six Months Ended June 30,
(In millions)		2018			2017				2018			2017
Unpaid supplemental health claims, beginning of period		$	4,041		$	3,854			$	3,881		$	3,707
Less reinsurance recoverables		31			30				28			27
Net balance, beginning of period		4,010			3,824				3,853			3,680
Add claims incurred during the period related to:
Current year		1,779			1,772				3,621			3,520
Prior years		(133		)	(138		)		(325		)	(260		)
Total incurred		1,646			1,634				3,296			3,260
Less claims paid during the period on claims incurred during:
Current year		1,226			1,220				1,746			1,721
Prior years		426			400				1,540			1,461
Total paid		1,652			1,620				3,286			3,182
Effect of foreign exchange rate changes on unpaid claims		(91		)	4				50			84
Net balance, end of period		3,913			3,842				3,913			3,842
Add reinsurance recoverables		29			30				29			30
Unpaid supplemental health claims, end of period		3,942			3,872				3,942			3,872
Unpaid life claims, end of period		582			409				582			409
Total liability for unpaid policy claims		$	4,524		$	4,281			$	4,524		$	4,281

The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims development of $325 million for the six-month period ended June 30, 2018 comprises approximately $210 million from Japan, which represents approximately 65% of the total. Excluding the impact of foreign exchange of a loss of approximately $10 million from December 31, 2017 to June 30, 2018, the favorable claims development in Japan would have been approximately $200 million, representing approximately 62% of the total.

The Company has experienced continued favorable claim trends in 2018 for its core health products in Japan. The Company's experience in Japan related to the average length of stay in the hospital for cancer treatment has shown continued decline in the current period. In addition, cancer treatment patterns in Japan are continuing to be influenced by significant advances in early-detection techniques and by the increased use of pathological diagnosis rather than clinical exams. Additionally, follow-up radiation and chemotherapy treatments are occurring more often on an outpatient basis. Such changes in treatment not only increase the quality of life and initial outcomes for the patients, but also decrease the average length of each hospital stay, resulting in favorable claims development.

The remainder of the favorable claims development related to prior years for the six-month period ended June 30, 2018, reflects Aflac U.S. favorable claims experience compared to previous estimates, primarily in the cancer and accident lines of business.