XML 44 R21.htm IDEA: XBRL DOCUMENT v3.22.4
Insurance Liabilities
 12 Months Ended
Dec. 31, 2022
Insurance [Abstract]  
Insurance Liabilities
12. Insurance Liabilities
LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (LOSS RESERVES)
Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve estimates. Any adjustments resulting from this review are reflected currently in pre-tax income, except to the extent such adjustment impacts a deferred gain under a retroactive reinsurance agreement, in which case the ceded portion would be amortized into pre-tax income in subsequent periods. Because these estimates are subject to the outcome of future events, changes in estimates are common given that loss trends vary and time is often required for changes in trends to be recognized and confirmed. Reserve changes that increase previous estimates of ultimate cost are referred to as unfavorable or adverse development or reserve strengthening. Reserve changes that decrease previous estimates of ultimate cost are referred to as favorable development or reserve releases.
Our gross loss reserves before reinsurance and discount are net of contractual deductible recoverable amounts due from policyholders of approximately $12.1 billion and $12.3 billion at December 31, 2022 and 2021, respectively. These recoverable amounts are related to certain policies with high deductibles (in excess of high dollar amounts retained by the insured through self-insured retentions, deductibles, retrospective programs, or captive arrangements, each referred to generically as “deductibles”), primarily for U.S. Commercial casualty business. With respect to the deductible portion of the claim, we manage and pay the entire claim on behalf of the insured and are reimbursed by the insured for the deductible portion of the claim. Thus, these recoverable amounts represent a credit exposure to us. At both December 31, 2022 and 2021 we held collateral of approximately $8.6 billion for these deductible recoverable amounts, consisting primarily of letters of credit and funded trust agreements. Allowance for credit losses for the unsecured portion of these recoverable amounts was $14 million at both December 31, 2022 and 2021.
The following table presents the rollforward of activity in loss reserves:
Years Ended December 31,
(in millions)202220212020
Liability for unpaid loss and loss adjustment expenses, beginning of year$79,026 $77,720 $78,328 
Reinsurance recoverable(35,213)(34,431)(31,069)
Initial allowance upon CECL adoption— — 164 
Net Liability for unpaid loss and loss adjustment expenses, beginning of year43,813 43,289 47,423 
Losses and loss adjustment expenses incurred:
Current year16,434 16,434 16,928 
Prior years, excluding discount and amortization of deferred gain(530)(171)(90)
Prior years, discount charge (benefit)(605)(131)587 
Prior years, amortization of deferred gain on retroactive reinsurance(a)
(252)(190)(237)
Total losses and loss adjustment expenses incurred15,047 15,942 17,188 
Losses and loss adjustment expenses paid:
Current year(4,011)(3,868)(4,062)
Prior years(11,066)(11,503)(14,603)
Total losses and loss adjustment expenses paid(15,077)(15,371)(18,665)
Other changes:
Foreign exchange effect(1,463)(593)815 
Allowance for credit losses— — (15)
Retroactive reinsurance adjustment (net of discount)(b)
745 546 361 
Fortitude sale(c)
— — (3,818)
Total other changes(718)(47)(2,657)
Liability for unpaid loss and loss adjustment expenses, end of year:
Net liability for unpaid losses and loss adjustment expenses43,065 43,813 43,289 
Reinsurance recoverable32,102 35,213 34,431 
Total$75,167 $79,026 $77,720 
(a)Includes $63 million, $53 million and $41 million for the retroactive reinsurance agreement with NICO covering U.S. asbestos exposures for the years ended December 31, 2022, 2021 and 2020, respectively.
(b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $(301) million, $(42) million and $340 million for the years ended December 31, 2022, 2021 and 2020, respectively.
(c)On June 2, 2020, AIG completed the Majority Interest Fortitude Sale. Concurrent with the Majority Interest Fortitude Sale, AIG established a reinsurance recoverable. For additional information, see Note 1.
The following table presents the reconciliation of the net liability for unpaid losses and loss adjustment expenses in the following tables to Loss Reserves in the Consolidated Balance Sheets for the year ended December 31, 2022:
(in millions)Net liability for unpaid
losses and loss adjustment
expenses as presented in the
disaggregated tables below		Reinsurance recoverable on
unpaid losses and loss
adjustment expenses included in
the disaggregated tables below		Gross liability
for unpaid
losses and loss
adjustment expenses
U.S. Workers' Compensation (before discount)$3,962$5,573$9,535
U.S. Excess Casualty3,6383,7017,339
U.S. Other Casualty3,8583,8727,730
U.S. Financial Lines5,8991,7737,672
U.S. Property and Special Risks6,8153,29510,110
U.S. Personal Insurance7942,0522,846
UK/Europe Casualty and Financial lines6,9841,5388,522
UK/Europe Property and Special Risks2,7171,4644,181
UK/Europe and Japan Personal Insurance1,6285922,220
Total$36,295$23,860$60,155
Reconciling Items
Discount on workers' compensation lines(2,532)
Other product lines*15,072
Unallocated loss adjustment expenses2,472
Total Loss Reserves$75,167
*Reinsurance recoverable for other product lines of $8.5 billion resulted in a net liability for unpaid losses and loss adjustment expenses of $6.6 billion for the year ended December 31, 2022.
Prior Year Development
In the sections below, we provide details by coverage group regarding incurred losses, reserve balances and prior year development. The first table below shows prior year development by coverage group, the first two columns of which will again be presented in the coverage group sections that follow. After this table we describe historical drivers of prior year development as well as actuarial methods and relevant terminology. The following coverage group sections present the undiscounted incurred losses and allocated loss adjustment expenses by accident year on a net basis after reinsurance, with separate presentation of the adverse development cover where applicable, excluding related amortization of the deferred gain. Each section also contains a description of the business included in that section. Finally, we show a table of claims payout patterns by coverage.
In 2017, we entered into adverse development reinsurance agreement (ADC) cessions with National Indemnity Company (NICO) under which we transferred to NICO 80 percent of the reserve risk on substantially all of our U.S. Commercial long-tail exposures for accident years 2015 and prior.
The following table presents the reconciliation of net prior year development before the ADC cessions from the tables below to the net prior year development after ADC cessions and amortization of deferred gain for the year ended December 31, 2022:
(in millions)Prior Year
Development
Net of External
Reinsurance
Before ADC
Cessions
Prior Year
Development
Net of External
Reinsurance
After ADC
Cessions(a)
Re-Attribution
of ADC
Recovery(b)
Amortization
of Deferred
Gain at
Inception		Prior Year
Development
After
Amortization
and
Re-attribution
U.S. Workers' Compensation$(644)$(338)$(29)$(52)$(419)
U.S. Excess Casualty(116)17 15 (40)(8)
U.S. Other Casualty(149)(162)33 (38)(167)
U.S. Financial Lines939 707 (22)(27)658 
U.S. Property and Special Risks(81)(100)3 (9)(106)
U.S. Personal Insurance(28)(32)— (1)(33)
UK/Europe Casualty and Financial lines82 82 — — 82 
UK/Europe Property and Special Risks(153)(153)— — (153)
UK/Europe and Japan Personal Insurance(111)(111)— — (111)
Other Operations Run-Off(5)(5)— — (5)
Other product lines(264)(261)— — (261)
Subtotal, adjusted pre-tax basis$(530)$(356)$— $(167)$(523)
Remove impact of Retroactive Reinsurance
Amortization of deferred gain at inception167 
Prior year development ceded under the Asbestos LPT— 
Prior year development ceded under the ADC(174)
Total, prior years, excluding discount and amortization of deferred gain$(530)
(a)Change in net ultimate loss and loss adjustment expenses excludes the portion of prior year development we have ceded under the Asbestos Loss Portfolio Transfer (LPT) and the ADC, both of which are provided by NICO and are considered retroactive reinsurance under U.S. GAAP.
(b)Reattribution of the ADC recovery takes place annually as we model the future payments on the subject reserves covered by the ADC to determine when the aggregate payments will exceed the attachment. ADC recoverables are then reallocated by line based on payments expected to be made after attachment point is exceeded.
During 2022, we recognized favorable prior year loss reserve development of $530 million excluding discount and amortization of deferred gain. The development was primarily driven by:
•Favorable development on U.S. Workers’ Compensation of $644 million, net of external reinsurance but before ADC cessions due to continued favorable frequency and severity trends across most accident years particularly for excess and guaranteed cost US Workers Compensation segments;
•Favorable development on U.S. Excess Casualty of $116 million, net of external reinsurance but before ADC cessions, driven by lead and mid-excess Retail Excess Casualty;
•Favorable development on U.S Other Casualty of $149 million, net of external reinsurance but before ADC cessions, largely driven by favorable experience in Commercial Auto, General Liability and Construction Wraps;
•Unfavorable development in U.S. Financial Lines of $939 million, net of external reinsurance but before ADC cessions, due to higher severity trends particularly in Excess & Primary D&O and Excess & Financial Institutions E&O. This was partially offset by favorable development in EPLI;
•Favorable development in U.S. Property and Special Risks of $81 million driven by more favorable crop experience than anticipated;
•Unfavorable development in UK/Europe Casualty and Financial Lines of $82 million due to unfavorable experience in UK Financial Lines in M&A, Commercial PI and Commercial D&O as well as unfavorable Casualty experience due to large loss activity in the UK, European Excess Casualty, and French Auto experience;
•Favorable development on UK/Europe Property and Special Risks of $153 million driven by Global Specialty, primarily from accident years 2020 and 2021. This favorable experience was seen in each product line and in every region;
•Favorable development on UK/Europe and Japan Personal Insurance of $111 million driven by Japan Auto and A&H business with additional favorable experience in UK and Europe; and
•Favorable development of $264 million in total on other product lines, net of external reinsurance but before ADC cessions, driven by runoff construction business and favorable results from our Canadian business across most products.
During 2021, we recognized favorable prior year loss reserve development of $171 million excluding discount and amortization of deferred gain. The development was primarily driven by:
•Favorable development on U.S. Workers’ Compensation of $617 million, net of external reinsurance but before ADC cessions due to continued favorable frequency and severity trends seen across the diagonals for many subsets of U.S. Workers Compensation especially for recent accident years;
•Favorable development in U.S. Personal Lines of $412 million, net of external reinsurance but before ADC cessions, mainly due to favorable development and subrogation recoveries from the 2017 and 2018 catastrophe years;
•Favorable development on UK/Europe and Japan Personal Insurance of $173 million due to favorable loss trends in personal auto in Japan and Europe and accident and health in all three regions;
•Favorable development on UK/Europe Property and Special Risks of $118 million driven by favorable emergence across several Specialty classes;
•Unfavorable development in U.S. Financial Lines of $649 million, net of external reinsurance but before ADC cessions, due to adverse experience in D&O, Cyber and EPLI. This includes adverse experience in Fiduciary from emergence of Excessive Fee claims and Cyber ransomware losses;
•Unfavorable development on UK/Europe Casualty and Financial Lines of $210 million driven by recognition of large loss activity in Financial PI in the UK and Commercial D&O in Europe; and
•Unfavorable development in U.S. Property and Special Risks of $172 million driven largely by the impact of reductions in reinsurance recoveries driven by changes in catastrophe loss estimates.
During 2020, we recognized favorable prior year loss reserve development of $90 million excluding discount and amortization of deferred gain. The development was primarily driven by:
•Favorable development on U.S. Workers’ Compensation business of $367 million, net of external reinsurance but before ADC cessions due to continued favorable frequency and severity trends seen across the diagonals for many subsets of U.S. Workers Compensation especially for recent accident years;
•Favorable development on U.S. Excess Casualty of $149 million driven by favorable emergence on the older years offset by higher severity claim emergence in recent accident years across various excess casualty classes. Auto liability deteriorated slightly in the more recent accident years;
•Favorable development on U.S. Other Casualty of $141 million, net of external reinsurance but before ADC cessions, largely driven by favorable development on extra-contractual obligations, environmental impairment business and loss sensitive casualty business;
•Favorable development in U.S. Property and Special Risks of $80 million driven largely by attritional property and favorable emergence on specialty losses coming in better than expected;
•Unfavorable development in U.S. Financial Lines of $479 million driven by loss severity emergence in recent accident years in our D&O business especially National and Private and Not For Profit segments, adverse loss emergence and loss trends in EPLI and adverse claim activity in E&O (including Architects and Engineers), Cyber and Mergers and Acquisitions segments;
•Unfavorable development in U.S. Personal Lines of $94 million, net of external reinsurance but before ADC cessions, mainly due to large losses in Homeowners and Umbrella;
•Unfavorable development on UK/Europe Casualty and Financial Lines of $258 million driven by Financial Lines in the UK and Europe and Excess Casualty in Europe as we continue to see increased severity of large losses in these classes;
•Favorable development on UK/Europe Property and Special Risks of $155 million driven by favorable emergence across several Specialty classes; and
•Favorable development on UK/Europe and Japan Personal Insurance of $39 million due to favorable frequency and severity trends.
Our analyses and conclusions about prior year reserves also help inform our judgments about the current accident year loss and loss adjustment expense ratios we selected.
Loss Development Information
The following is information about incurred and paid loss developments as of December 31, 2022, net of reinsurance. The cumulative number of reported claims, the total of IBNR liabilities and expected development on reported loss included within the net incurred loss amounts are presented in the following section.
Reserving Methodology
We use a combination of methods to project ultimate losses for both long-tail and short-tail exposures, which include:
•Paid Development method: The Paid Development method estimates ultimate losses by reviewing paid loss patterns and selecting paid ultimate loss development factors. These factors are then applied to paid losses by applying them to accident years, with further expected changes in paid loss. Since the method does not rely on case reserves, it is not directly influenced by changes in the adequacy of case reserves.
•Incurred Development method: The Incurred Development method is similar to the Paid Development method, but it uses case incurred losses instead of paid losses. Since this method uses more data (case reserves in addition to paid losses) than the Paid Development method, the incurred development patterns may be less variable than paid development patterns.
•Expected Loss Ratio method: The Expected Loss Ratio method multiplies premiums by an expected loss ratio to produce ultimate loss estimates for each accident year. This method may be useful if loss development patterns are inconsistent, losses emerge very slowly, or there is relatively little loss history from which to estimate future losses. Expected loss ratio methods for business written in excess of a deductible may be given significant weight in the most recent five accident years. The expected loss ratios used for recent accident years are based on the projected ultimate loss ratios for older years adjusted for rate changes, loss trend including inflation, and where appropriate, changing market conditions.
•Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method using premiums and paid losses is a combination of the Paid Development method and the Expected Loss Ratio method where the weight given to each method is the reciprocal of the loss development factor. This method normally determines expected loss ratios similar to the method used for the Expected Loss Ratio method. The Bornhuetter-Ferguson method using premiums and incurred losses is similar to the Bornhuetter-Ferguson method using premiums and paid losses except that it uses case-incurred losses.
•Cape Cod method: The Cape Cod method is mechanically similar to the Bornhuetter-Ferguson method with the difference being that the Expected Loss Ratio estimates are determined based on a weighting of the loss estimates that come from the Paid/Incurred Development Methods. This method may be more responsive to recent loss trends than the Bornhuetter-Ferguson method.
•Average Loss method: The Average Loss method multiplies a projected number of ultimate claims by an estimated ultimate severity average loss for each accident year to produce ultimate loss estimates. Since projections of the ultimate number of claims are often less variable than projections of ultimate loss, this method can provide more reliable results for reserve categories where loss development patterns are inconsistent or too variable to be relied on exclusively.
In updating our loss reserve estimates, we consider and evaluate inputs from many sources, including actual claims data, the performance of prior reserve estimates, observed industry trends, our internal peer review processes, including challenges and recommendations from our Enterprise Risk Management group, as well as the views of third-party actuarial firms. We use these inputs to improve our evaluation techniques, and to analyze and assess the change in estimated ultimate loss for each accident year by product line. Our analyses produce a range of indications from various methods, from which we select our best estimate.
In determining the actual carried loss reserves, we consider both the internal actuarial best estimate and numerous other internal and external factors, including:
•an assessment of economic conditions, including real GDP growth, inflation, employment rates or unemployment duration, stock market volatility and changes in corporate bond spreads;
•changes in the legal, regulatory, judicial and social environment, including changes in road safety, public health and cleanup standards;
•changes in medical cost trends (inflation, intensity and utilization of medical services) and wage inflation trends;
•underlying policy pricing, terms and conditions including attachment points and policy limits;
•change in claims handling philosophy, operating model, processes, and related ongoing enhancements;
•third-party claims reviews that are periodically performed for key classes of claims such as toxic tort, environmental and other complex casualty claims;
•third-party actuarial reviews that are periodically performed for key classes of business;
•input from underwriters on pricing, terms, and conditions and market trends; and
•changes in our reinsurance program, pricing and commutations.
Where appropriate and identifiable, adjustments have been made to standard projection techniques. Changes in Claims organization management, differing referral and review criteria and other factors may also be expected to alter loss emergence.
The following factors are relevant to the loss development information included in the tables below:
•Table organization: The tables are organized by accident year and include policies written on an occurrence and claims- made basis. We note that for certain categories of claims (e.g., construction defect claims and environmental claims) and for reinsurance recoverable, losses may sometimes be reclassified to an earlier or later accident year as more information about the date of
occurrence becomes available to us. These reclassifications are shown as development in the respective years in the tables below. Financial Lines business is primarily written on a claims-made basis, while the majority of the workers’ compensation, excess casualty, other casualty, and run-off property and casualty lines of business are written on an occurrence basis. Primarily, all short-tail lines in Property and Special Risks and Personal Insurance are written on an occurrence basis.
•Groupings: We believe our groupings have homogenous risk characteristics with similar development patterns and would generally be subject to similar trends and reflect our reportable segments. The incurred losses and loss adjustment expenses and paid losses in the following tables for the current reporting year are allocated to the line of business and accident years based on how the business is coded by profit center and line of business.
•Reinsurance: Our reinsurance program varies by exposure type. Historically we have leveraged facultative and treaty reinsurance, both on a pro-rata and excess of loss basis. Our reinsurance program may change from year to year, which may affect the comparability of the data presented in our tables.
•Adverse development reinsurance agreement: We have provided the impact of the ADC in an additional table below our Incurred Losses and Allocated Loss Adjustment Expenses (ALAE) tables. The impact of the ADC is shown beginning in 2016 given the retroactive date of the contract and coincides with the effective date of the contract. For the lines of business covered by the agreement (U.S. Workers' Compensation, U.S. Excess Casualty, U.S. Other Casualty, U.S. Financial Lines, U.S. Property and Special Risks and U.S. Personal Insurance or collectively, the Covered Lines), an attribution of the loss recoveries to the line of business by calendar year and accident year is performed based on the underlying distribution of the losses subject to the agreement. Specifically, the future claim payments for all subject incurred losses were projected into future years based on the same actuarial assumptions underlying the related reserves. The additional table presented after discussion of prior year development by line of business reconciles the changes in net ultimates to our overall prior year development and provides the reattribution of loss recoveries for the Covered Lines. The reinsurance terms of the ADC were then used to identify the future claims payments for which 80% will be reimbursed by NICO. At each reporting period, the attribution of the ADC recoveries is performed. The factors that could cause the attribution to lines of business and accident year to change include changes in underlying actuarial assumptions as to timing and amount of future claim payments.
•Incurred but not reported liabilities (IBNR): We include development from past reported losses in IBNR.
•Data excluded from tables: Information with respect to accident years older than ten years is excluded from the development tables. Unallocated loss adjustment expenses are also excluded.
•Foreign exchange: The loss development for operations outside of the U.S. is presented for all accident years using the current exchange rate at December 31, 2022. Although this approach requires restating all prior accident year information, the changes in exchange rates do not impact incurred and paid loss development trends.
•Acquisitions: We include acquisitions from all accident years presented in the tables. For purposes of this disclosure, we have applied the retrospective method for the acquired reserves, including incurred and paid claim development histories throughout the relevant tables. It should be noted that historical reserves for the acquired businesses were established by the acquired companies using methods, assumptions and procedures then in effect which may differ from our current reserving bases. Accordingly, it may not be appropriate to extrapolate future redundancies or deficiencies based on the aggregated historical results shown in the triangles.
•Dispositions: We exclude dispositions from all accident years presented in the tables.
•Claim counts: We consider a reported claim to be one claim for each claimant or feature for each loss occurrence. Claims relating to losses that are 100 percent reinsured are excluded from the reported claims in the tables below. Reported claims for losses from assumed reinsurance contracts are not available and hence not included in the reported claims.
•There are limitations that should be considered on the reported claim count data in the tables below, including:
–Claim counts are presented only on a reported (not an ultimate) basis;
–The tables below include lines of business and geographies at a certain aggregated level which may indicate different frequency and severity trends and characteristics, and may not be as meaningful as the claim count information related to the individual products within those lines of business and geographies;
–Certain lines of business are more likely to be subject to occurrences involving multiple claimants and features, which can distort measures based on the reported claim counts in the table below; and
–Reported claim counts are not adjusted for ceded reinsurance, which may distort the measure of frequency or severity.
Supplemental Information: The information about incurred and paid loss development for all periods preceding the year ended December 31, 2022 and the related historical claims payout percentage disclosure is unaudited and is presented as supplementary information.
The following tables present undiscounted, incurred and paid losses and allocated loss adjustment expenses by accident year, on a net basis after reinsurance, with a separate presentation of the ADC excluding the related amortization of the deferred gain:
U.S. Workers' Compensation
U.S. Workers’ Compensation is an extremely long-tail line of business, with loss emergence extending for decades. We generally use a combination of loss development, frequency/severity and expected loss ratio methods for workers’ compensation.
Many of our workers compensation policies contain risk-sharing features, including high deductibles, self-insured retentions or retrospective rating features, in addition to a traditional insurance component. These risk-sharing programs generally are large and complex, comprising multiple products, years and structures, and are subject to amendment over time. We group guaranteed cost and excess of deductible business separately and then further by state and industry subset to the extent that meaningful differences are determined to exist. We also separately analyze certain subsets of the portfolio that have unique characteristics (e.g., U.S. government sub-contractor accounts and construction wrap-up business). For excess of deductible business, we also segment by size of deductible and whether the claim is handled by AIG or an outside third-party administrator. The proportion of large deductible business has increased over time, which has slowed the reporting pattern of claims.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$1,932 $1,880 $1,950 $2,060 $2,032 $1,974 $1,916 $1,886 $1,877 $1,878 $1 $116 48,545 $(326)$(103)$1,552 $13 
20141,729 1,764 1,866 1,862 1,794 1,709 1,679 1,637 1,614 (23)213 40,986 (371)(164)1,243 49 
20151,708 1,864 1,866 1,814 1,722 1,675 1,634 1,612 (22)395 36,645 (520)(311)1,092 84 
20161,299 1,346 1,318 1,140 1,090 1,075 1,036 (39)241 31,540 — — 1,036 241 
2017789 850 776 763 731 712 (19)231 27,312 — — 712 231 
2018998 1,021 961 911 896 (15)399 21,939 — — 896 399 
2019887 873 812 801 (11)313 16,712 — — 801 313 
2020597 573 521 (52)176 13,503 — — 521 176 
2021597 570 (27)314 10,480 — — 570 314 
2022523 391 7,213 — — 523 391 
Total$10,163 $(207)$(1,217)$8,946 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(5,905)— 170 (5,735)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance4,390 (404)(3,639)751 
Unallocated loss adjustment expense prior year development(33)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$8,648 $(644)$(4,686)$3,962 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$1,500$1,494$1,481$1,458$1,520$1,504$1,552 $48 
20141,3111,3101,3091,3291,2231,1711,243 72 
20151,2791,2791,3181,1341,1051,0411,092 51 
20161,2991,3461,3181,1401,0901,0751,036 (39)
2017789850776763731712 (19)
20189981,021961911896 (15)
2019887873812801 (11)
2020597573521 (52)
2021597570 (27)
2022523 
Total$5,389 $6,218 $7,274 $7,745 $8,132 $8,415 $8,946 $8 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(5,735)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance751 (325)
Unallocated loss adjustment expense prior year adjustment(21)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$3,962 $(338)
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(560)$(538)$(493)$(458)$(366)$(373)$(326)$47 
2014(555)(552)(485)(380)(456)(466)(371)95 
2015(585)(587)(496)(588)(570)(593)(520)73 
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(1,700)$(1,677)$(1,474)$(1,426)$(1,392)$(1,432)$(1,217)$215 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below170 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(3,639)79 
Unallocated loss adjustment expense prior year development12 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(4,686)$306 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$282 $619 $879 $1,067 $1,214 $1,287 $1,335 $1,372 $1,422 $1,472 $(74)
2014231 558 786 930 1,030 1,096 1,137 1,180 1,207 (53)
2015234 524 725 854 925 979 1,013 1,038 (43)
2016147 378 521 584 630 662 686 — 
201793 224 294 333 367 389 — 
201885 215 296 359 388 — 
201993 219 301 347 — 
202064 159 205 — 
202160 128 — 
202245 — 
Total$5,905 $(170)
U.S. Excess Casualty
U.S. Excess Casualty policies tend to attach at a high layer above underlying policies, which causes the loss development pattern to lag significantly. Many of the claims notified to the excess layers are closed without payment because the claims never reach our layer as a result of high deductibles and other underlying coverages, while the claims that reach our layer can have large case reserves or settlements and be highly variable in terms of reported timing and amount. For a portion of this business, the underlying primary policies are issued by other insurance companies, which can limit our access to relevant information to help inform our judgments as the loss events evolve and mature. Furthermore, this coverage is often significantly impacted by the underwriting cycle and external judicial trends.
Recent accident years reflect a strategy towards having higher attachment points on the portfolio through changing participations in various layers within an insured’s program.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$1,123 $1,035 $1,169 $1,308 $1,241 $1,282 $1,292 $1,316 $1,303 $1,237 $(66)$194 3,423 $(324)$(175)$913 $19 
2014938 1,069 1,275 1,260 1,339 1,283 1,248 1,269 1,259 (10)324 2,924 (390)(200)869 124 
2015989 1,463 1,440 1,603 1,656 1,694 1,721 1,686 (35)281 3,053 (512)(219)1,174 62 
2016898 1,146 1,162 1,171 1,274 1,250 1,263 13 362 2,628 — — 1,263 362 
2017856 1,002 1,097 1,153 1,157 1,200 43 354 1,985 — — 1,200 354 
2018648 646 721 769 769 — 189 1,350 — — 769 189 
2019577 583 597 612 15 357 1,162 — — 612 357 
2020406 413 410 (3)324 1,064 — — 410 324 
2021278 277 (1)150 652 — — 277 150 
2022305 280 254 — — 305 280 
Total$9,018 $(44)$(1,226)$7,792 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(5,054)— 228 (4,826)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance2,205 (121)(1,533)672 
Unallocated loss adjustment expense prior year development49 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$6,169 $(116)$(2,531)$3,638 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$935$932$981$1,032$970$970$913 $(57)
2014902905915844912949869 (80)
20151,0271,0151,1391,1631,2111,2311,174 (57)
20168981,1461,1621,1711,2741,2501,263 13 
20178561,0021,0971,1531,1571,200 43 
2018648646721769769 — 
2019577583597612 15 
2020406413410 (3)
2021278277 (1)
2022305 
Total$3,762 $4,854 $5,847 $6,530 $7,230 $7,614 $7,792 $(127)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(4,826)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance672 67 
Unallocated loss adjustment expense prior year adjustment77 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$3,638 $17 
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(373)$(309)$(301)$(260)$(346)$(333)$(324)$9 
2014(373)(355)(424)(439)(336)(320)(390)(70)
2015(436)(425)(464)(493)(483)(490)(512)(22)
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(1,182)$(1,089)$(1,189)$(1,192)$(1,165)$(1,143)$(1,226)$(83)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below228 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(1,533)188 
Unallocated loss adjustment expense prior year development28 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(2,531)$133 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$15 $105 $207 $387 $578 $705 $819 $882 $903 $916 $(33)
20143 77 240 444 590 703 815 839 878 (54)
20159 210 391 718 935 1,061 1,124 1,253 (141)
201628 80 204 388 502 566 670 — 
20171 45 156 505 585 676 — 
20181 125 227 315 414 — 
20197 43 79 157 — 
20204 15 33 — 
20214 43 — 
202214 — 
Total$5,054 $(228)
U.S. Other Casualty
U.S. Other Casualty includes general liability, automobile liability, environmental, medical malpractice, and other casualty lines of business. These lines of business are all long-tail in nature and while somewhat diverse in terms of exposures, these lines are often subject to similar trends. These lines are often significantly impacted by the underwriting cycle and external judicial trends. Many of our policies contain risk-sharing features, including high deductibles, self-insured retentions or retrospective rating features, in addition to a traditional insurance component. These risk-sharing programs generally are large and complex, comprising multiple products, years and structures, and are subject to amendment over time.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$1,653 $1,729 $1,912 $2,148 $2,185 $2,164 $2,211 $2,196 $2,178 $2,158 $(20)$144 40,358 $(231)$(128)$1,927 $16 
20141,751 1,721 1,963 2,009 1,910 1,916 1,946 1,935 1,944 9 87 38,469 (226)(65)1,718 22 
20151,329 1,762 1,829 1,736 1,794 1,834 1,824 1,815 (9)25 35,664 (252)(17)1,563 8 
20161,339 1,343 1,321 1,391 1,340 1,323 1,293 (30)165 29,099 — — 1,293 165 
2017602 629 738 674 668 643 (25)51 21,090 — — 643 51 
2018802 845 837 870 824 (46)235 16,736 — — 824 235 
20191,059 1,058 1,053 1,062 9 615 20,690 — — 1,062 615 
2020524 576 538 (38)329 10,808 — — 538 329 
2021795 793 (2)615 9,560 — — 793 615 
2022793 708 9,650 — — 793 708 
Total$11,863 $(152)$(709)$11,154 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(8,018)— 277 (7,741)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance1,485 — (1,040)445 
Unallocated loss adjustment expense prior year development3 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$5,330 $(149)$(1,472)$3,858 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$1,948$1,960$1,929$1,948$1,920$1,926$1,927 $1 
20141,6671,6781,6341,6941,7011,7221,718 (4)
20151,3611,3731,4231,4931,5531,5621,563 1 
20161,3391,3431,3211,3911,3401,3231,293 (30)
2017602629738674668643 (25)
2018802845837870824 (46)
20191,0591,0581,0531,062 9 
2020524576538 (38)
2021795793 (2)
2022793 
Total$6,315 $6,956 $7,738 $9,168 $9,607 $10,495 $11,154 $(134)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(7,741)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance445 (40)
Unallocated loss adjustment expense prior year adjustment12 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$3,858 $(162)
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(200)$(225)$(235)$(263)$(276)$(252)$(231)$21 
2014(296)(331)(276)(222)(245)(213)(226)(13)
2015(401)(456)(313)(301)(281)(262)(252)10 
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(897)$(1,012)$(824)$(786)$(802)$(727)$(709)$18 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below277 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(1,040)(40)
Unallocated loss adjustment expense prior year development9 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(1,472)$(13)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$169 $594 $962 $1,248 $1,485 $1,688 $1,809 $1,885 $1,900 $1,943 $(42)
2014210 620 868 1,150 1,392 1,572 1,653 1,719 1,795 (97)
2015105 309 769 1,087 1,351 1,485 1,603 1,680 (138)
201677 298 489 703 846 938 1,018 — 
201751 111 216 314 455 527 — 
201843 122 227 360 470 — 
201953 138 226 321 — 
202026 73 139 — 
202132 87 — 
202238 — 
Total$8,018 $(277)
U.S. Financial Lines
U.S. Financial Lines business includes D&O, Errors and Omissions (E&O), EPLI policies and various professional liability subsets of business, as well as the fidelity book of business. This includes cyber coverage and mergers and acquisitions coverage, which have been a growing and evolving portion of this portfolio. These product lines are predominantly claims-made in nature, losses are characterized by low frequency and high severity, and results are often significantly impacted by external economic conditions.
Our analysis is segmented by major coverages, such as D&O, E&O, etc. and then further segmented by major industry groups (e.g. corporate accounts, national accounts, financial institutions, private/not-for-profit, etc.). We also separately review primary business from excess business for certain product lines.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$1,790 $1,719 $1,670 $1,613 $1,555 $1,497 $1,509 $1,550 $1,542 $1,589 $47 $52 19,157 $(180)$(49)$1,409 $3 
20141,812 1,777 1,892 1,927 1,960 1,981 2,000 2,057 2,014 (43)110 17,638 (276)(82)1,738 28 
20151,737 1,762 1,743 1,788 1,830 1,874 1,959 2,044 85 99 16,235 (439)(78)1,605 21 
20161,605 1,855 1,993 2,064 2,139 2,281 2,325 44 246 16,135 — — 2,325 246 
20171,564 1,675 1,756 1,846 1,898 1,987 89 266 15,213 — — 1,987 266 
20181,640 1,766 1,882 2,063 2,225 162 574 14,787 — — 2,225 574 
20191,503 1,536 1,627 1,926 299 672 13,242 — — 1,926 672 
20201,213 1,252 1,408 156 525 10,251 — — 1,408 525 
20211,430 1,408 (22)1,144 6,934 — — 1,408 1,144 
20221,130 1,076 5,192 — — 1,130 1,076 
Total$18,056 $817 $(895)$17,161 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(11,719)— 478 (11,241)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance261 134 (282)(21)
Unallocated loss adjustment expense prior year development(12)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$6,598 $939 $(699)$5,899 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$1,442$1,429$1,408$1,409$1,402$1,415$1,409 $(6)
20141,7331,7291,7531,7411,7591,7611,738 (23)
20151,4291,4301,4621,5521,5501,5951,605 10 
20161,6051,8551,9932,0642,1392,2812,325 44 
20171,5641,6751,7561,8461,8981,987 89 
20181,6401,7661,8822,0632,225 162 
20191,5031,5361,6271,926 299 
20201,2131,2521,408 156 
20211,4301,408 (22)
20221,130 
Total$6,209 $8,007 $9,931 $11,791 $13,327 $15,322 $17,161 $709 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(11,241)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(21)(4)
Unallocated loss adjustment expense prior year adjustment2 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$5,899 $707 
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(171)$(126)$(89)$(100)$(148)$(127)$(180)$(53)
2014(159)(198)(207)(240)(241)(296)(276)20 
2015(333)(313)(326)(278)(324)(364)(439)(75)
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(663)$(637)$(622)$(618)$(713)$(787)$(895)$(108)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below478 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(282)(138)
Unallocated loss adjustment expense prior year development14 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(699)$(232)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$41 $327 $682 $945 $1,139 $1,235 $1,314 $1,362 $1,440 $1,466 $(81)
201466 366 849 1,158 1,387 1,573 1,658 1,758 1,820 (128)
201563 390 791 1,055 1,282 1,488 1,686 1,818 (269)
201673 499 1,002 1,358 1,659 1,826 1,903 — 
201764 391 761 1,118 1,396 1,515 — 
201886 486 835 1,126 1,415 — 
201994 367 642 953 — 
202084 356 648 — 
202143 151 — 
202230 — 
Total$11,719 $(478)
U.S. Property and Special Risks
U.S. Property products include commercial, industrial and energy-related property insurance products and services that cover exposures to manmade and natural disasters, including business interruption. U.S. Special Risk products include aerospace, environmental, political risk, trade credit, surety and marine insurance, and program business for various small and medium sized enterprises insurance lines. The program segments include both property and casualty exposures. Recent years have seen an increasing proportion of non-admitted coverages which has altered the underlying customer profile to be less severe in the aggregate.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$2,524 $2,525 $2,382 $2,428 $2,441 $2,443 $2,435 $2,428 $2,417 $2,438 $21 $27 50,022 $(41)$(20)$2,397 $7 
20142,940 2,708 2,779 2,765 2,783 2,763 2,745 2,725 2,719 (6)57 60,738 (76)(36)2,643 21 
20153,100 2,973 2,903 2,892 2,856 2,852 2,859 2,869 10 41 59,443 (115)(31)2,754 10 
20163,143 3,177 3,094 3,084 3,076 3,060 3,065 5 12 54,740 — — 3,065 12 
20175,367 4,892 4,734 4,733 4,741 4,777 36 94 79,644 — — 4,777 94 
20183,674 3,711 3,667 3,882 3,863 (19)258 69,608 — — 3,863 258 
20192,783 2,812 2,847 2,859 12 153 78,576 — — 2,859 153 
20204,483 4,469 4,497 28 1,127 68,119 — — 4,497 1,127 
20213,517 3,308 (209)393 80,684 — — 3,308 393 
20224,035 1,781 75,535 — — 4,035 1,781 
Total$34,430 $(122)$(232)$34,198 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(27,778)— 85 (27,693)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance417 47 (107)310 
Unallocated loss adjustment expense prior year development(6)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$7,069 $(81)$(254)$6,815 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$2,401$2,403$2,416$2,397$2,392$2,385$2,397 $12 
20142,7122,7042,7192,6872,6672,6552,643 (12)
20152,8322,8052,8052,7622,7532,7522,754 2 
20163,1433,1773,0943,0843,0763,0603,065 5 
20175,3674,8924,7344,7334,7414,777 36 
20183,6743,7113,6673,8823,863 (19)
20192,7832,8122,8472,859 12 
20204,4834,4694,497 28 
20213,5173,308 (209)
20224,035 
Total$11,088 $16,456 $19,600 $22,158 $26,583 $30,308 $34,198 $(145)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(27,693)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance310 48 
Unallocated loss adjustment expense prior year adjustment(3)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$6,815 $(100)
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(27)$(38)$(27)$(38)$(36)$(32)$(41)$(9)
2014(67)(61)(64)(76)(78)(70)(76)(6)
2015(141)(98)(87)(94)(99)(107)(115)(8)
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(235)$(197)$(178)$(208)$(213)$(209)$(232)$(23)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below85 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(107)1 
Unallocated loss adjustment expense prior year development3 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(254)$(19)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$733 $1,568 $1,844 $2,037 $2,184 $2,296 $2,321 $2,339 $2,350 $2,385 $(12)
2014914 1,758 2,109 2,322 2,461 2,553 2,592 2,623 2,635 (17)
20151,038 1,865 2,230 2,485 2,610 2,680 2,717 2,765 (56)
20161,004 2,025 2,358 2,611 2,797 2,880 2,962 — 
20171,363 3,064 3,785 4,136 4,390 4,503 — 
20181,066 2,618 3,009 3,254 3,427 — 
20191,145 2,013 2,316 2,499 — 
20201,191 2,348 2,747 — 
20211,189 2,472 — 
20221,383 — 
Total$27,778 $(85)
U.S. Personal Insurance
U.S. Personal Insurance consists of accident and health and personal lines. Accident and health products include voluntary and sponsor-paid personal accident and supplemental health products for individuals, employees, associations and other organizations as well as a broad range of travel insurance products and services for leisure and business travelers. Personal lines include automobile and homeowners’ insurance, extended warranty, and consumer specialty products, such as identity theft and credit card protection. Personal lines also provides insurance for high net worth individuals offered through AIG Private Client Group, including auto, homeowners, umbrella, yacht, fine art and collections insurance. Personal lines are generally short-tail in nature and can reflect significant salvage and subrogation recoveries.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2022
Accident
Year		20132014201520162017201820192020202120222022
Prior Year
Development
Excluding
the Impact
of ADC		Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses		Cumulative
Number of
Reported
Claims		Incurred
Impact
of ADC		IBNR
Impact
of ADC		2022
(Net of
Impact
of ADC)		Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2013$1,887 $1,816 $1,803 $1,782 $1,780 $1,776 $1,777 $1,778 $1,777 $1,777 $— $2 335,448 $(1)$— $1,776 $2 
20141,552 1,562 1,572 1,572 1,583 1,584 1,588 1,587 1,592 5 6 275,096 (8)— 1,584 6 
20151,511 1,498 1,494 1,483 1,482 1,485 1,487 1,488 1 11 261,060 (7)(1)1,481 10 
20161,536 1,533 1,533 1,540 1,542 1,544 1,544 — 16 247,328 — — 1,544 16 
20171,878 2,137 2,011 2,057 1,924 1,916 (8)37 219,816 — — 1,916 37 
20182,188 2,193 2,154 1,937 1,936 (1)36 102,027 — — 1,936 36 
20191,593 1,664 1,646 1,596 (50)95 92,763 — — 1,596 95 
2020954 906 913 7 75 54,375 — — 913 75 
2021748 765 17 90 53,806 — — 765 90 
2022517 99 37,022 — — 517 99 
Total$14,044 $(29)$(16)$14,028 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(13,186)— 14 (13,172)
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance(59)1 (3)(62)
Unallocated loss adjustment expense prior year development— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$799 $(28)$(5)$794 
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$1,774$1,774$1,774$1,776$1,776$1,776$1,776 $— 
20141,5641,5641,5711,5801,5841,5821,584 2 
20151,4761,4751,4721,4761,4801,4821,481 (1)
20161,5361,5331,5331,5401,5421,5441,544 — 
20171,8782,1372,0112,0571,9241,916 (8)
20182,1882,1932,1541,9371,936 (1)
20191,5931,6641,6461,596 (50)
2020954906913 7 
2021748765 17 
2022517 
Total$6,350 $8,224 $10,675 $12,169 $13,211 $13,545 $14,028 $(34)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(13,172)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(62)2 
Unallocated loss adjustment expense prior year adjustment— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$794 $(32)
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended
December 31,
(in millions)
Accident
Year		2016201720182019202020212022Prior Year
Development
Unaudited
2013$(8)$(6)$(2)$(1)$(2)$(1)$(1)$— 
2014(8)(8)(12)(4)(4)(5)(8)(3)
2015(22)(19)(11)(6)(5)(5)(7)(2)
2016— — — — — — — — 
2017— — — — — — — — 
2018— — — — — — — — 
2019— — — — — — — — 
2020— — — — — — — — 
2021— — — — — — — — 
2022— — — — — — — — 
Total$(38)$(33)$(25)$(11)$(11)$(11)$(16)$(5)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below14 
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2013, net of reinsurance(3)1 
Unallocated loss adjustment expense prior year development— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$(5)$(4)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$1,109 $1,634 $1,705 $1,744 $1,759 $1,766 $1,772 $1,774 $1,775 $1,774 $(1)
2014959 1,380 1,463 1,507 1,536 1,555 1,568 1,572 1,579 (7)
2015931 1,320 1,411 1,439 1,455 1,461 1,463 1,468 (6)
2016857 1,344 1,422 1,460 1,501 1,512 1,518 — 
2017941 1,672 1,896 1,789 1,826 1,852 — 
20181,227 1,939 1,973 1,789 1,832 — 
2019884 1,295 1,379 1,416 — 
2020667 679 725 — 
2021488 650 — 
2022372 — 
Total$13,186 $(14)
UK/Europe Casualty and Financial Lines
UK/Europe is our largest non-U.S. region for Liability and Financial Lines. UK/Europe Casualty and Financial Lines is composed of third-party coverages including general liability, auto liability, D&O, professional liability and various other coverages throughout both the UK and Continental Europe. These areas are all long-tail in nature and while somewhat diverse in terms of exposures, these lines are often subject to similar trends. These lines are impacted by the underwriting cycle and external judicial trends. The largest share of business is in the UK, but significant business is also written in other European countries such as Germany, France, and Italy.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2022
Accident Year20132014201520162017201820192020202120222022
Prior Year
Development		Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses		Cumulative
Number of
Reported
Claims
Unaudited
2013$979 $1,022 $996 $980 $1,011 $1,054 $1,101 $1,124 $1,119 $1,133 $14 $48 109,297 
2014979 954 979 984 981 1,070 1,011 1,052 1,077 25 73 101,355 
20151,034 1,167 1,200 1,109 1,188 1,179 1,184 1,190 6 61 112,087 
20161,242 1,383 1,427 1,430 1,529 1,525 1,519 (6)137 141,037 
20171,270 1,256 1,186 1,258 1,317 1,326 9 199 148,408 
20181,315 1,342 1,407 1,444 1,490 46 277 152,379 
20191,176 1,197 1,268 1,307 39 359 141,643 
20201,157 1,208 1,144 (64)603 88,677 
20211,309 1,308 (1)847 74,872 
20221,553 1,033 58,460 
Total$13,047 $68 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(6,856)— 
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance793 14 
Unallocated loss adjustment expense prior year development— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$6,984 $82 
*The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$85 $321 $461 $587 $696 $805 $883 $929 $959 $992 
201468 245 389 503 598 660 720 778 817 
201568 228 414 542 653 824 909 952 
2016114 359 558 740 888 1,014 1,118 
201792 266 424 575 720 859 
2018107 357 546 707 863 
201994 295 455 628 
202057 217 348 
202149 224 
202255 
Total$6,856 
*The losses reported in the table are not covered by the ADC.
UK/Europe Property and Special Risks
UK/Europe Property products include commercial, industrial and energy-related property insurance products and services that cover exposures to manmade and natural disasters, including business interruption. UK/Europe Special Risk products include aerospace, environmental, political risk, trade credit, surety and marine insurance, and various small and medium sized enterprises insurance lines.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2022
Accident Year20132014201520162017201820192020202120222022
Prior Year
Development		Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses		Cumulative
Number of
Reported
Claims
Unaudited
2013$1,383 $1,380 $1,271 $1,251 $1,235 $1,226 $1,209 $1,201 $1,200 $1,199 $(1)$5 40,096 
20141,434 1,460 1,442 1,432 1,441 1,414 1,376 1,371 1,369 (2)3 48,543 
20151,542 1,499 1,486 1,455 1,429 1,419 1,405 1,399 (6)13 54,054 
20161,508 1,649 1,641 1,644 1,641 1,635 1,614 (21)12 57,174 
20171,625 1,598 1,593 1,599 1,582 1,558 (24)22 53,706 
20181,498 1,508 1,486 1,495 1,426 (69)31 44,504 
20191,138 1,107 1,083 1,108 25 76 33,563 
20201,293 1,236 1,214 (22)193 25,634 
2021994 965 (29)213 20,675 
20221,323 476 16,150 
Total$13,175 $(149)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(10,514)— 
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance56 (4)
Unallocated loss adjustment expense prior year development— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$2,717 $(153)
*The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$321 $791 $1,013 $1,087 $1,135 $1,156 $1,166 $1,172 $1,174 $1,176 
2014308 900 1,178 1,246 1,285 1,311 1,320 1,332 1,341 
2015337 899 1,175 1,278 1,314 1,336 1,345 1,347 
2016443 1,083 1,330 1,463 1,507 1,535 1,551 
2017345 924 1,203 1,348 1,403 1,441 
2018307 956 1,138 1,263 1,277 
2019258 632 799 887 
2020250 664 815 
2021185 489 
2022190 
Total$10,514 
*The losses reported in the table are not covered by the ADC.
UK/Europe and Japan Personal Insurance
UK/Europe and Japan Personal Insurance lines consist of accident and health and personal lines. Accident and health products include voluntary and sponsor-paid personal accident and supplemental health products for individuals, employees, associations and other organizations as well as a broad range of travel insurance products and services for leisure and business travelers. Personal lines include automobile and homeowners’ insurance, extended warranty, and consumer specialty products, such as identity theft and credit card protection. Personal lines are generally short-tail in nature.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2022
Accident Year20132014201520162017201820192020202120222022
Prior Year
Development		Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses		Cumulative
Number of
Reported
Claims
Unaudited
2013$2,285 $2,286 $2,256 $2,257 $2,252 $2,247 $2,245 $2,245 $2,245 $2,246 $1 $2 1,736,957 
20142,256 2,266 2,251 2,249 2,242 2,241 2,243 2,242 2,239 (3)2 1,795,535 
20152,324 2,304 2,306 2,296 2,295 2,295 2,295 2,293 (2)2 1,776,269 
20162,281 2,279 2,265 2,260 2,258 2,255 2,251 (4)4 1,798,323 
20172,234 2,157 2,142 2,138 2,155 2,152 (3)4 1,724,404 
20182,605 2,515 2,514 2,488 2,492 4 19 1,889,426 
20192,092 2,062 2,027 2,019 (8)15 1,666,974 
20201,914 1,777 1,747 (30)61 1,390,787 
20211,803 1,734 (69)114 1,357,947 
20221,933 286 1,837,966 
Total$21,106 $(114)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below(19,520)— 
Liabilities for losses and loss adjustment expenses and prior year development before accident year 2013, net of reinsurance42 3 
Unallocated loss adjustment expense prior year development— 
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance$1,628 $(111)
*The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year2013201420152016201720182019202020212022
Unaudited
2013$1,249 $1,870 $2,052 $2,142 $2,189 $2,214 $2,225 $2,232 $2,236 $2,238 
20141,227 1,854 2,041 2,134 2,182 2,203 2,214 2,223 2,228 
20151,251 1,895 2,083 2,184 2,221 2,247 2,264 2,273 
20161,251 1,864 2,047 2,137 2,183 2,208 2,223 
20171,224 1,823 1,984 2,055 2,091 2,112 
20181,554 2,113 2,280 2,365 2,409 
20191,226 1,739 1,867 1,929 
20201,023 1,474 1,580 
20211,005 1,424 
20221,104 
Total$19,520 
*The losses reported in the table are not covered by the ADC.
Claims Payout Patterns
The following table presents the historical average annual percentage claims payout on an accident year basis at the same level of disaggregation as presented in the claims development table.
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance (Unaudited)
Year12345678910
U.S. Workers' compensation12.4 %17.5 %11.5 %7.3 %5.2 %3.5 %2.4 %2.0 %2.2 %2.7 %
U.S. Excess casualty1.3 7.9 9.3 16.9 11.4 7.9 7.5 4.9 2.4 1.0 
U.S. Other casualty6.2 12.4 14.9 14.6 14.0 8.9 5.6 3.7 2.3 2.0 
U.S. Financial Lines3.6 15.9 19.6 15.3 12.4 7.7 5.6 4.8 4.0 1.6 
U.S. Property and Special Risks32.5 33.1 11.6 7.6 5.2 3.1 1.6 1.2 0.5 1.4 
U.S. Personal Insurance61.7 26.3 5.5 (0.5)1.8 0.8 0.4 0.3 0.2 — 
UK/Europe Casualty and Financial Lines6.1 15.5 12.8 11.4 9.8 9.7 6.6 4.4 3.1 2.9 
UK/Europe Property and Special Risks22.2 38.3 16.5 7.5 2.8 1.9 0.8 0.5 0.4 0.2 
UK/Europe and Japan Personal Insurance57.4 26.3 7.4 3.8 1.9 1.1 0.6 0.4 0.2 0.1 
DISCOUNTING OF LOSS RESERVES
At December 31, 2022 and 2021, the loss reserves reflect a net loss reserve discount of $1.3 billion and $876 million, respectively, including tabular and non-tabular calculations based upon the following assumptions:
•The non-tabular workers’ compensation discount is calculated separately for companies domiciled in New York, Pennsylvania and Delaware, and follows the statutory regulations (prescribed or permitted) for each state.
–For New York companies, the discount is based on a 5 percent interest rate and the companies’ own payout patterns.
–The Pennsylvania and Delaware regulators approved use of a consistent benchmark discount rate and spread (U.S. Treasury rate plus a liquidity premium) to all of our workers’ compensation reserves in our Pennsylvania domiciled and Delaware domiciled companies, as well as our use of updated payout patterns specific to our primary and excess workers compensation portfolios. In 2020, the regulators also approved that the discount rate will be updated on an annual basis.
•The tabular workers’ compensation discount is calculated based on the mortality rate used in the 2007 U.S. Life table and interest rates prescribed or permitted by each state (i.e. New York is based on 5 percent interest rate and Pennsylvania and Delaware are based on U.S. Treasury rate plus a liquidity premium). In the case that applying this tabular discount factor to our nominal reserves produces a tabular discount that is greater than the indemnity portion of our case reserves, the tabular discount is capped at our estimate of the indemnity portion of our cases reserves (45 percent).
The discount for asbestos reserves has been fully accreted.
At December 31, 2022 and 2021, the discount consists of $314 million and $260 million of tabular discount, respectively, and $964 million and $616 million of non-tabular discount for workers’ compensation, respectively. During the years ended December 31, 2022, 2021 and 2020, the benefit / (charge) from changes in discount of $703 million, $193 million and $(516) million, respectively, were recorded as part of the policyholder benefits and losses incurred in the Consolidated Statements of Income (Loss).
The following table presents the components of the loss reserve discount discussed above:
(in millions)December 31, 2022December 31, 2021
U.S. workers' compensation$2,532 $1,829 
Retroactive reinsurance(1,254)(953)
Total reserve discount(a)(b)
$1,278 $876 
(a)Excludes $135 million and $116 million of discount related to certain long-tail liabilities in the UK at December 31, 2022 and 2021, respectively.
(b)Includes gross discount of $763 million and $500 million, which was 100 percent ceded to Fortitude Re at December 31, 2022 and 2021, respectively.
The following table presents the net loss reserve discount benefit (charge):
Years Ended December 31,
(in millions)202220212020
Current accident year$98 $62 $71 
Accretion and other adjustments to prior year discount(239)(88)(180)
Effect of interest rate changes844 219 (407)
Net reserve discount benefit (charge)703 193 (516)
Change in discount on loss reserves ceded under retroactive reinsurance(301)(42)340 
Net change in total reserve discount*$402 $151 $(176)
*Excludes $19 million, $(35) million and $(20) million of discount related to certain long-tail liabilities in the UK for the years ended December 31, 2022, 2021 and 2020, respectively.
During 2022, effective interest rates increased due to an increase in the forward yield curve component of the discount rates reflecting an increase in U.S. Treasury rates along with changes in payout pattern assumptions.
During 2021, effective interest rates increased due to an increase in the forward yield curve component of the discount rates reflecting an increase in U.S. Treasury rates along with changes in payout pattern assumptions.
During 2020, effective interest rates declined due to a decrease in the forward yield curve component of the discount rates reflecting a decline in U.S. Treasury rates along with changes in payout pattern assumptions.
Amortization of Deferred Gain on Retroactive Reinsurance
Amortization of the deferred gain on retroactive reinsurance includes $189 million, $137 million and $196 million related to the adverse development reinsurance cover with NICO for the years ended December 31, 2022, 2021 and 2020, respectively.
Amounts recognized reflect the amortization of the initial deferred gain at inception, as amended for subsequent changes in the deferred gain due to changes in subject reserves.
FUTURE POLICY BENEFITS
Future policy benefits primarily include reserves for traditional life and annuity payout contracts, which represent an estimate of the present value of future benefits less the present value of future net premiums. Included in Future policy benefits are liabilities for annuities issued in structured settlements whereby a claimant receives life contingent payments over their lifetime or guaranteed payments over a defined period. Also included are pension risk transfer arrangements whereby an upfront premium is received in exchange for guaranteed retirement benefits. All payments under these arrangements are fixed and determinable with respect to their amounts and dates. Also included in Future policy benefits, are reserves for contracts in loss recognition, including the adjustment to reflect the effect of unrealized gains on fixed maturity securities available for sale with related changes recognized through Other comprehensive income (loss).
Future policy benefits also include certain guaranteed benefits of annuity products that are not considered embedded derivatives.
For universal life policies with secondary guarantees, we recognize certain liabilities in addition to policyholder account balances. For universal life policies with secondary guarantees, as well as other universal life policies for which profits followed by losses are expected at contract inception, a liability is recognized based on a benefit ratio of (a) the present value of total expected payments, in excess of the account value, over the life of the contract, divided by (b) the present value of total expected assessments over the life of the contract. Universal life account balances are reported in Policyholder contract deposits, while these additional liabilities related to universal life products are reported within Future Policy Benefits in the Consolidated Balance Sheets. These additional liabilities are also adjusted to reflect the effect of unrealized gains or losses on fixed maturity securities available for sale on accumulated assessments, with related changes recognized through Other comprehensive income (loss). The primary policyholder behavior assumptions for these liabilities include mortality, lapses and premium persistency. The primary capital market assumptions used for the liability for universal life secondary guarantees include discount rates and net earned rates.
For additional information on guaranteed minimum death benefits, see Note 13.
The following table presents universal life policies with secondary guarantees and similar features (excluding account balances and embedded derivatives):
Years Ended December 31,
(in millions)202220212020
Balance, beginning of year$4,505 $4,751 $3,787 
Incurred guaranteed benefits*739 603 1,041 
Paid guaranteed benefits(588)(489)(470)
Changes related to unrealized appreciation (depreciation) of investments(1,831)(360)393 
Balance, end of year$2,825 $4,505 $4,751 
*Incurred guaranteed benefits include the portion of assessments established as additions to reserves as well as changes in estimates (assumption unlockings) affecting these reserves.
The following table presents details concerning our Universal life policies with secondary guarantees and similar features:
At December 31,
(dollars in millions)20222021
Account value$3,514 $3,313 
Net amount at risk$69,335 $65,801 
Average attained age of contract holders5353
The liability for future policy benefits has been established including assumptions for interest rates which vary by year of issuance and product, and range from approximately 0.2 percent to 14.6 percent. Mortality and surrender rate assumptions are generally based on actual experience when the liability is established.
POLICYHOLDER CONTRACT DEPOSITS
The liability for Policyholder contract deposits is primarily recorded at accumulated value (deposits received and net transfers from separate accounts, plus accrued interest credited at rates ranging from 0 percent to 9 percent at December 31, 2022, less withdrawals and assessed fees). Deposits collected on investment-oriented products are not reflected as revenues, because they are recorded directly to Policyholder contract deposits upon receipt. Amounts assessed against the policyholders for mortality, administrative, and other services are included in revenues.
In addition to liabilities for universal life, fixed annuities, fixed options within variable annuities, annuities without life contingencies, funding agreements and GICs, policyholder contract deposits also include our liability for (a) indexed and variable features accounted for as embedded derivatives at fair value, and (b) annuities issued in a structured settlement arrangement with no life contingency.
For additional information on guaranteed benefits accounted for as embedded derivatives, see Note 13.
Under a funding agreement-backed notes issuance program, an unaffiliated, non-consolidated statutory trust issues medium-term notes to investors, which are secured by funding agreements issued to the trust by one of our Life and Retirement companies through our Institutional Markets business.
The following table presents Policyholder contract deposits:
At December 31,
(in millions)20222021
Policyholder contract deposits:
Individual Retirement$90,069 $87,664 
Group Retirement43,332 44,087 
Life Insurance10,258 10,298 
Institutional Markets11,643 10,810 
Fortitude Re3,589 3,827 
Total Policyholder contract deposits$158,891 $156,686 
OTHER POLICYHOLDER FUNDS
Other policyholder funds include unearned revenue reserves (URR). URR consist of front-end loads on investment-oriented contracts, representing those policy loads that are non-level and typically higher in initial policy years than in later policy years. URR for investment-oriented contracts are generally deferred and amortized, with interest, in relation to the incidence of estimated gross profits (EGPs) to be realized over the estimated lives of the contracts and are subject to the same adjustments due to changes in the assumptions underlying EGPs as DAC. Amortization of URR is recorded in Policy fees. Similar to unrealized appreciation (depreciation) of investments for DAC, URR related to investment-oriented products is also adjusted to reflect the effect of unrealized gains or losses on fixed maturity securities available for sale on EGPs, with related changes recognized through Other comprehensive income.
Other policyholder funds also include provisions for future dividends to participating policyholders, accrued in accordance with all applicable regulatory or contractual provisions. Participating life business represented approximately 0.7 percent of gross insurance in force at December 31, 2022 and 1.3 percent of gross domestic premiums and other considerations in 2022. The amount of annual dividends to be paid is approved by the boards of directors of the Life and Retirement companies. Provisions for future dividend payments are computed by jurisdiction, reflecting local regulations. The portions of current and prior net income and of current unrealized appreciation of investments that can inure to our benefit are restricted in some cases by the insurance contracts and by the insurance regulations of the jurisdictions in which the policies are in force.
Certain products are subject to experience adjustments. These include group life and group medical products, credit life contracts, accident and health insurance contracts/riders attached to life policies and, to a limited extent, reinsurance agreements with other direct insurers. Ultimate premiums from these contracts are estimated and recognized as revenue with the unearned portions of the premiums recorded as liabilities in Other policyholder funds. Experience adjustments vary according to the type of contract and the territory in which the policy is in force and are subject to local regulatory guidance.