Unpaid Claims and Claims Expense Short Duration Contracts

3 Months Ended

Jun. 30, 2023

Short-Duration Insurance and Deposit Contracts [Text Block]

UNPAID CLAIMS AND CLAIM EXPENSE – SHORT-DURATION CONTRACTS

Rollforward of Claims and Claim Adjustment Expenses

The liability for unpaid claims for short-duration contracts is reported in other policy claims and benefits on the Company’s condensed consolidated balance sheets. Activity associated with unpaid claims is summarized below (dollars in millions):


	Six months ended June 30,
	2023		2022
Balance, beginning of year	$	2,480	$	2,110
Less: reinsurance recoverable	(57)		(81)
Net balance, beginning of year	2,423		2,029
Incurred:
Current year	789		1,047
Prior years	(55)		(74)
Total incurred	734		973
Payments:
Current year	(119)		(117)
Prior years	(539)		(484)
Total payments	(658)		(601)
Other changes:
Interest accretion	17		14
Foreign exchange adjustments	(7)		(44)
Total other changes	10		(30)

Net balance, end of period	2,509		2,371
Plus: reinsurance recoverable	70		76
Balance, end of period	$	2,579	$	2,447

Incurred claims associated with prior periods are primarily due to the development of short-duration business claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.