INSURANCE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2019

Claims Development [Line Items]

Schedule of reconciliation of activity in the liability for unpaid claims and claims adjustment expense

The following table presents the roll-forward of activity in Loss Reserves:

	Three Months Ended
	March 31,
(in millions)		2019		2018
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	83,639	$	78,393
Reinsurance recoverable		(31,690)		(26,708)
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		51,949		51,685
Losses and loss adjustment expenses incurred:
Current year		4,805		4,698
Prior years, excluding discount and amortization of deferred gain		(15)		(40)
Prior years, discount charge (benefit)		497		(205)
Prior years, amortization of deferred gain on retroactive reinsurance(a)		(86)		(39)
Total losses and loss adjustment expenses incurred		5,201		4,414
Losses and loss adjustment expenses paid:
Current year		(344)		(610)
Prior years		(6,120)		(4,779)
Total losses and loss adjustment expenses paid		(6,464)		(5,389)
Other changes:
Foreign exchange effect		216		274
Retroactive reinsurance adjustment (net of discount)(b)		(190)		(97)
Total other changes		26		177
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		50,712		50,887
Reinsurance recoverable		31,784		27,211
Total	$	82,496	$	78,098

(a) Includes $9 million and $5 million for the retroactive reinsurance agreement with NICO covering U.S. asbestos exposures for the three-month periods ended March 31, 2019 and 2018, respectively.

(b) Includes change in discount on retroactive reinsurance of $(307) million and $128 million for the three-month periods ended March 31, 2019 and 2018, respectively.

Schedule of loss reserve discount and loss reserve discount benefit (charge)

The following table presents the components of the loss reserve discount discussed above:

	March 31, 2019						December 31, 2018
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio		Total	Insurance			Portfolio		Total
U.S. workers' compensation	$	2,387	$	894	$	3,281	$	2,782	$	973	$	3,755
Retroactive reinsurance		(1,412)		-		(1,412)		(1,720)		-		(1,720)
Total reserve discount*	$	975	$	894	$	1,869	$	1,062	$	973	$	2,035

*Excludes $198 million and $163 million of discount related to certain long tail liabilities in the United Kingdom at March 31, 2019 and December 31, 2018, respectively.

The following tables present the net loss reserve discount benefit (charge):

Three Months Ended March 31,	2019						2018
	North						North
	America						America
	Commercial		Legacy				Commercial		Legacy
(in millions)	Insurance		Portfolio			Total	Insurance		Portfolio			Total
Current accident year	$	24	$	-	$	24	$	19	$	-	$	19
Accretion and other adjustments to prior year discount		(251)		(13)		(264)		45		(18)		27
Effect of interest rate changes		(167)		(66)		(233)		123		36		159
Net reserve discount benefit (charge)		(394)		(79)		(473)		187		18		205
Change in discount on loss reserves ceded under
retroactive reinsurance		307		-		307		(128)		-		(128)
Net change in total reserve discount(a)	$	(87)	$	(79)	$	(166)	$	59	$	18	$	77

(a) Excludes $35 million and $(5) million discount related to certain long tail liabilities in the United Kingdom for the three-month periods ended March 31, 2019 and 2018, respectively.