RESERVES FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

9 Months Ended

Sep. 30, 2023

RESERVES FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

Activity in the reserve for losses and loss adjustment expenses (“LAE”) is summarized for the periods indicated:


	Nine Months Ended September 30,
(Dollars in millions)	2023		2022
Gross reserves beginning of period	$	14,977	$	13,121
Less reinsurance recoverables on unpaid losses	(3,684)		(3,651)
Net reserves beginning of period	11,294		9,470

Incurred related to:
Current year	4,159		4,606
Prior years	31		18
Total incurred losses and LAE	4,190		4,624

Paid related to:
Current year	1,737		1,502
Prior years	1,380		1,303
Total paid losses and LAE	3,118		2,805

Foreign exchange/translation adjustment	—		(70)

Net reserves end of period	12,365		11,221
Plus reinsurance recoverables on unpaid losses	3,304		3,628
Gross reserves end of period	$	15,669	$	14,849

(Some amounts may not reconcile due to rounding.)

Current year incurred losses were $4.2 billion and $4.6 billion for the nine months ended September 30, 2023 and 2022, respectively. Gross and net reserves increased for the nine months ended September 30, 2023, reflecting an increase in underlying exposure due to earned premium growth, year over year, amounting to approximately $275 million in 2023 current year attritional losses compared to 2022, offset by a decrease of $723 million in current year catastrophe losses in 2023. Prior year incurred development of $31 million is primarily driven by the commutation of stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019. Additional details can be found within Note 13.