POLICY LIABILITIES

6 Months Ended

Jun. 30, 2020

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



	Three Months Ended June 30,							Six Months Ended June 30,
(In millions)		2020			2019				2020			2019
Unpaid supplemental health claims, beginning of period		$	3,983		$	3,967			$	3,968		$	3,952
Less reinsurance recoverables		33			29				31			28
Net balance, beginning of period		3,950			3,938				3,937			3,924
Add claims incurred during the period related to:
Current year		1,736			1,785				3,574			3,610
Prior years		(166		)	(136		)		(302		)	(303		)
Total incurred		1,570			1,649				3,272			3,307
Less claims paid during the period on claims incurred during:
Current year		1,127			1,229				1,681			1,735
Prior years		411			430				1,558			1,568
Total paid		1,538			1,659				3,239			3,303
Effect of foreign exchange rate changes on unpaid claims		22			65				34			65
Net balance, end of period		4,004			3,993				4,004			3,993
Add reinsurance recoverables		37			31				37			31
Unpaid supplemental health claims, end of period		4,041			4,024				4,041			4,024
Unpaid life claims, end of period		732			682				732			682
Total liability for unpaid policy claims		$	4,773		$	4,706			$	4,773		$	4,706

The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims development of $302 million for the six-month period ended June 30, 2020 comprises approximately $188 million from Japan, which represents approximately 62% of the total. Excluding the impact of foreign exchange of a gain of approximately $1 million from December 31, 2019 to June 30, 2020, the favorable claims development in Japan would have been approximately $187 million, representing approximately 62% of the total.

The Company has experienced continued favorable claim trends in 2020 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, 2020, reflects Aflac U.S. favorable claims experience compared to previous estimates, primarily in the cancer and accident lines of business.