POLICY LIABILITIES

9 Months Ended

Sep. 30, 2019

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



	Three Months Ended September 30,							Nine Months Ended September 30,
(In millions)		2019			2018				2019			2018
Unpaid supplemental health claims, beginning of period		$	4,024		$	3,942			$	3,952		$	3,881
Less reinsurance recoverables		31			29				28			28
Net balance, beginning of period		3,993			3,913				3,924			3,853
Add claims incurred during the period related to:
Current year		1,806			1,760				5,415			5,381
Prior years		(134		)	(131		)		(437		)	(456		)
Total incurred		1,672			1,629				4,978			4,925
Less claims paid during the period on claims incurred during:
Current year		1,421			1,357				3,150			3,109
Prior years		220			217				1,794			1,751
Total paid		1,641			1,574				4,944			4,860
Effect of foreign exchange rate changes on unpaid claims		(3		)	(59		)		63			(9		)
Net balance, end of period		4,021			3,909				4,021			3,909
Add reinsurance recoverables		31			29				31			29
Unpaid supplemental health claims, end of period		4,052			3,938				4,052			3,938
Unpaid life claims, end of period		689			592				689			592
Total liability for unpaid policy claims		$	4,741		$	4,530			$	4,741		$	4,530

The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims development of $437 million for the nine-month period ended September 30, 2019 comprises approximately $310 million from Japan, which represents approximately 71% of the total. Excluding the impact of foreign exchange of a gain of approximately $4 million from December 31, 2018 to September 30, 2019, the favorable claims development in Japan would have been approximately $306 million, representing approximately 70% of the total.

The Company has experienced continued favorable claim trends in 2019 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 nine-month period ended September 30, 2019, reflects Aflac U.S. favorable claims experience compared to previous estimates, primarily in the cancer and accident lines of business.