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INSURANCE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

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

The following table presents the rollforward of activity in loss reserves:

	Three Months Ended
	March 31,
(in millions)		2022		2021
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	79,026	$	77,720
Reinsurance recoverable		(35,213)		(34,431)
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		43,813		43,289
Losses and loss adjustment expenses incurred:
Current year		3,882		3,925
Prior years, excluding discount and amortization of deferred gain		(51)		16
Prior years, discount charge (benefit)		4		(18)
Prior years, amortization of deferred gain on retroactive reinsurance^(a)		(42)		(72)
Total losses and loss adjustment expenses incurred		3,793		3,851
Losses and loss adjustment expenses paid:
Current year		(323)		(328)
Prior years		(3,442)		(3,584)
Total losses and loss adjustment expenses paid		(3,765)		(3,912)
Other changes:
Foreign exchange effect		4		244
Retroactive reinsurance adjustment (net of discount)^(b)		17		89
Total other changes		21		333
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		43,862		43,561
Reinsurance recoverable		34,321		35,271
Total	$	78,183	$	78,832

(a)Includes $4 million and $17 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 March 31, 2022 and 2021, respectively.(b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $39 million for both the three-month periods ended March 31, 2022 and 2021.

Schedule of components of the loss reserve discount

(in millions)	March 31, 2022		December 31, 2021
U.S. workers' compensation	$	1,849	$	1,829
Retroactive reinsurance		(914)		(953)
Total reserve discount^(a)(b)	$	935	$	876

(a)Excludes $118 million and $116 million of discount related to certain long-tail liabilities in the UK at March 31, 2022 and December 31, 2021, respectively.

(b) Includes gross discount of $493 million and $500 million, which was 100 percent ceded to Fortitude Re at March 31, 2022 and December 31, 2021, respectively.

The following table presents the net loss reserve discount benefit (charge):

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

Three Months Ended March 31,
(in millions)	2022	2021
Current accident year	24	$	14
Accretion and other adjustments to prior year discount	(4)		18
Net reserve discount benefit (charge)	20		32
Change in discount on loss reserves ceded under retroactive reinsurance	39		39
Net change in total reserve discount^*	59	$	71

*Excludes $2 million and $7 million discount related to certain long-tail liabilities in the UK for the three-month periods ended March 31, 2022 and 2021, respectively.