INSURANCE LIABILITIES (Tables)

9 Months Ended

Sep. 30, 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				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	81,057	$	76,713	$	83,639	$	78,393
Reinsurance recoverable		(31,333)		(27,406)		(31,690)		(26,708)
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		49,724		49,307		51,949		51,685
Losses and loss adjustment expenses incurred:
Current year		5,150		6,670		14,750		15,800
Prior years, excluding discount and amortization of deferred gain		(74)		949		(221)		884
Prior years, discount charge (benefit)		276		3		1,017		(174)
Prior years, amortization of deferred gain on retroactive reinsurance(a)		13		(175)		(129)		(283)
Total losses and loss adjustment expenses incurred		5,365		7,447		15,417		16,227
Losses and loss adjustment expenses paid:
Current year		(1,702)		(1,791)		(3,194)		(3,289)
Prior years		(4,652)		(4,526)		(15,334)		(14,312)
Total losses and loss adjustment expenses paid		(6,354)		(6,317)		(18,528)		(17,601)
Other changes:
Foreign exchange effect		(172)		(236)		(165)		(393)
Acquisitions(b)		-		3,020		-		3,020
Retroactive reinsurance adjustment (net of discount)(c)		96		(464)		(14)		(181)
Total other changes		(76)		2,320		(179)		2,446
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		48,659		52,757		48,659		52,757
Reinsurance recoverable		31,224		29,202		31,224		29,202
Total	$	79,883	$	81,959	$	79,883	$	81,959

(a) Includes $6 million and $9 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended September 30, 2019 and 2018, respectively, and $21 million and $22 million for the nine-month periods ended September 30, 2019 and 2018, respectively.

(b) Amounts relate to the acquisition of Validus in July 2018.

(c) Includes change in discount on retroactive reinsurance of $(43) million and $46 million for the three-month periods ended September 30, 2019 and 2018, respectively, and $(475) million and $154 million for the nine-month periods ended September 30, 2019 and 2018, respectively.

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

	September 30, 2019						December 31, 2018
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio		Total	Insurance			Portfolio		Total
U.S. workers' compensation	$	2,138	$	698	$	2,836	$	2,782	$	973	$	3,755
Retroactive reinsurance		(1,246)		-		(1,246)		(1,720)		-		(1,720)
Total reserve discount*	$	892	$	698	$	1,590	$	1,062	$	973	$	2,035

*Excludes $161 million and $163 million of discount related to certain long tail liabilities in the United Kingdom at September 30, 2019 and December 31, 2018, respectively.

Three Months Ended September 30,	2019						2018
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio		Total	Insurance			Portfolio		Total
Current accident year	$	41	$	-	$	41	$	89	$	-	$	89
Accretion and other adjustments
to prior year discount		(26)		(56)		(82)		(7)		(12)		(19)
Effect of interest rate changes		(136)		(58)		(194)		13		3		16
Net reserve discount
benefit (charge)		(121)		(114)		(235)		95		(9)		86
Change in discount on loss reserves
ceded under retroactive reinsurance		43		-		43		(46)		-		(46)
Net change in total reserve
discount(a)	$	(78)	$	(114)	$	(192)	$	49	$	(9)	$	40
Nine Months Ended September 30,	2019						2018
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio		Total	Insurance			Portfolio		Total
Current accident year	$	97	$	-	$	97	$	131	$	-	$	131
Accretion and other adjustments
to prior year discount		(269)		(80)		(349)		(95)		(42)		(137)
Effect of interest rate changes		(473)		(195)		(668)		232		79		311
Net reserve discount
benefit (charge)		(645)		(275)		(920)		268		37		305
Change in discount on loss reserves
ceded under retroactive reinsurance		475		-		475		(154)		-		(154)
Net change in total reserve
discount(b)	$	(170)	$	(275)	$	(445)	$	114	$	37	$	151

(a) Excludes $(27) million and $12 million discount related to certain long tail liabilities in the United Kingdom for the three-month periods ended September 30, 2019 and 2018, respectively.

(b) Excludes $(1) million and $10 million discount related to certain long tail liabilities in the United Kingdom for the nine-month periods ended September 30, 2019 and 2018, respectively.