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Unpaid losses and loss expenses | 6 Months Ended
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Jun. 30, 2022
Liability for Claims and Claims Adjustment Expense [Abstract] |
Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block] | Unpaid losses and loss expenses The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:
| Six Months Ended
| June 30
(in millions of U.S. dollars) | 2022 |  | 2021
Gross unpaid losses and loss expenses – beginning of period | $ | 72,943 |  |  | $ | 67,811 |
Reinsurance recoverable on unpaid losses – beginning of period (1) | (16,184) |  |  | (14,647) |
Net unpaid losses and loss expenses – beginning of period | 56,759 |  |  | 53,164 |
Net losses and loss expenses incurred in respect of losses occurring in: |  |  |
Current year | 10,846 |  |  | 10,546 |
Prior years (2) | (651) |  |  | (487) |
Total | 10,195 |  |  | 10,059 |
Net losses and loss expenses paid in respect of losses occurring in: |  |  |
Current year | 2,281 |  |  | 2,355 |
Prior years | 6,566 |  |  | 5,531 |
Total | 8,847 |  |  | 7,886 |
Foreign currency revaluation and other | (588) |  |  | 231 |
Net unpaid losses and loss expenses – end of period | 57,519 |  |  | 55,568 |
Reinsurance recoverable on unpaid losses (1) | 16,573 |  |  | 14,721 |
Gross unpaid losses and loss expenses – end of period | $ | 74,092 |  |  | $ | 70,289 |
(1) Net of valuation allowance for uncollectible reinsurance. (2) Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments and earned premiums totaling $164 million and $27 million for the six months ended June 30, 2022 and 2021, respectively. Gross and net unpaid losses and loss expenses increased $1,149 million and $760 million, respectively, for the six months ended June 30, 2022, driven by an increase in underlying exposure due to premium growth, partially offset by catastrophe loss payments, favorable prior period development, and favorable foreign exchange movement. Prior Period Development Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years. Long-tail lines include lines such as workers' compensation, general liability, and financial lines; while short-tail lines include lines such as most property lines, energy, personal accident, and agriculture. The following table summarizes (favorable) and adverse PPD by segment:
| Three Months Ended June 30 |  | Six Months Ended June 30
(in millions of U.S. dollars) | Long-tail |  | Short-tail |  | Total |  | Long-tail |  | Short-tail |  | Total
2022 |  |  |  |  |  |  |  |  |  |  |
North America Commercial P&C Insurance | $ | (266) |  |  | $ | (21) |  |  | $ | (287) |  |  | $ | (286) |  |  | $ | (109) |  |  | $ | (395) |
North America Personal P&C Insurance | — |  |  | (3) |  |  | (3) |  |  | — |  |  | (54) |  |  | (54) |
North America Agricultural Insurance | — |  |  | — |  |  | — |  |  | — |  |  | (26) |  |  | (26) |
Overseas General Insurance | — |  |  | (173) |  |  | (173) |  |  | — |  |  | (233) |  |  | (233) |
Global Reinsurance | (7) |  |  | 32 |  |  | 25 |  |  | (7) |  |  | 29 |  |  | 22 |
Corporate | 191 |  |  | — |  |  | 191 |  |  | 199 |  |  | — |  |  | 199 |
Total | $ | (82) |  |  | $ | (165) |  |  | $ | (247) |  |  | $ | (94) |  |  | $ | (393) |  |  | $ | (487) |
2021 |  |  |  |  |  |  |  |  |  |  |
North America Commercial P&C Insurance | $ | (96) |  |  | $ | (60) |  |  | $ | (156) |  |  | $ | (142) |  |  | $ | (141) |  |  | $ | (283) |
North America Personal P&C Insurance | — |  |  | (44) |  |  | (44) |  |  | — |  |  | (84) |  |  | (84) |
North America Agricultural Insurance | — |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | (2) |
Overseas General Insurance | 5 |  |  | (161) |  |  | (156) |  |  | 5 |  |  | (186) |  |  | (181) |
Global Reinsurance | (22) |  |  | 22 |  |  | — |  |  | (22) |  |  | 15 |  |  | (7) |
Corporate | 88 |  |  | — |  |  | 88 |  |  | 97 |  |  | — |  |  | 97 |
Total | $ | (25) |  |  | $ | (243) |  |  | $ | (268) |  |  | $ | (62) |  |  | $ | (398) |  |  | $ | (460) |
Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate. North America Commercial P&C Insurance 2022 For the three months ended June 30, 2022, net favorable PPD was $287 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $266 million in long-tail business, primarily from: •Net favorable development of $286 million in workers’ compensation lines. This included favorable development of $59 million related to our annual assessment of multi-claimant events, including industrial accidents, in the 2021 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. The remaining overall favorable development was mainly in accident years 2017 and prior, driven by lower than expected loss experience and related updates to loss development factors; •Net favorable development of $132 million in primary general liability portfolios, driven by lower than expected paid and reported case incurred activity in accident years 2017 and prior; and •Net adverse development of $123 million in commercial automobile liability, including $90 million in our high deductible and excess automobile liability portfolios, driven by adverse reported loss experience, mainly impacting accident years 2018 through 2021. For the six months ended June 30, 2022, net favorable PPD was $395 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $286 million in long-tail business, primarily from: •Net favorable development of $328 million in workers’ compensation lines, mainly due to the same factors experienced for the three months ended June 30, 2022, as described above; •Net favorable development of $136 million in primary general liability portfolios, mainly due to the same factors experienced for the three months ended June 30, 2022, as described above; and •Net adverse development of $116 million in commercial automobile liability, mainly due to the same factors experienced for the three months ended June 30, 2022, as described above. •Net favorable development of $109 million in short-tail business, primarily from net favorable development of $78 million in A&H, in accident years 2020 and 2021, driven by lower than expected loss emergence. 2021 For the three months ended June 30, 2021, net favorable PPD was $156 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $96 million in long-tail business, primarily from: •Net favorable development of $137 million in workers’ compensation lines. This included favorable development of $36 million related to our annual assessment of multi-claimant events, including industrial accidents, in the 2020 accident year. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. The remaining overall favorable development was mainly in accident years 2016 and prior, driven by lower than expected loss experience and related updates to loss development factors; •Net favorable development of $45 million in general liability portfolios, driven by lower than expected paid and reported case incurred activity in accident years 2017 and prior, partly offset by higher than expected reported case incurred activity in accident years 2018 and 2019; and •Net adverse development of $76 million in commercial automobile liability, driven by adverse reported loss experience, mainly impacting accident years 2017 and 2019. •Net favorable development of $60 million in short-tail business, primarily from net favorable development of $41 million in surety, $35 million of which was due to lower than expected COVID-19 claim activity in accident year 2020. The remaining favorable development is predominantly driven by automobile, which experienced lower than expected claim development related to physical damage coverages in the 2020 accident year. For the six months ended June 30, 2021, net favorable PPD was $283 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $142 million in long-tail business, primarily from: •Net favorable development of $158 million in workers’ compensation lines, mainly due to the same factors experienced for the three months ended June 30, 2021, as described above; and •Net adverse development of $74 million in commercial automobile liability, due to the same factors experienced for the three months ended June 30, 2021. •Net favorable development of $141 million in short-tail business, primarily from net favorable development of $89 million in surety, mainly in accident years 2018 through 2020, driven by lower than expected loss emergence. Overseas General Insurance 2022 For the three months ended June 30, 2022, net favorable PPD was $173 million across short-tail lines, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $53 million in A&H lines driven by favorable loss developments across all regions in accident years 2019 through 2021; •Net favorable development of $44 million in property lines mainly due to favorable loss development across most regions, favorable catastrophe development in accident years 2019 through 2021, specific case reductions, and salvage and subrogation recoveries in accident year 2018 and prior; and •Net favorable development of $41 million in personal lines mainly due to favorable loss frequency in Latin America and Asia Pacific automobile in accident years 2020 and 2021, UK and Asia Pacific high net worth homeowners in accident year 2021 and Asia Pacific and Continental Europe cell phones in accident year 2021. For the six months ended June 30, 2022, net favorable PPD was $233 million across a number of short-tail lines, which was the net of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $75 million in A&H lines, net favorable development of $67 million in property lines, and net favorable development of $53 million in personal lines, mainly due to the same factors experienced for the three months ended June 30, 2022. 2021 For the three months ended June 30, 2021, net favorable PPD was $156 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes: •Net favorable development of $161 million in short-tail business, primarily from: •Net favorable development of $50 million, in property lines in accident years 2019 and 2020, including a $21 million favorable reduction in COVID-19 estimates in accident year 2020. The remaining favorable development was across most regions in accident years 2019 and 2020; •Net favorable development of $49 million, in A&H lines, mainly due to favorable loss development across all regions in accident years 2019 and 2020; and •Net favorable development of $31 million in marine lines in accident years 2018 through 2020, driven by favorable loss development, specific claim reductions, and salvage and subrogation recoveries in Continental Europe and Asia Pacific. For the six months ended June 30, 2021, net favorable PPD in short-tail business was $186 million principally comprising favorable development of $58 million in property lines, and $55 million in A&H lines, due to the same factors experienced for the three months ended June 30, 2021. Global Reinsurance 2022 For the three and six months ended June 30, 2022, net adverse PPD was $25 million and $22 million, respectively, driven by adverse development of $32 million in property lines, mainly in accident years 2020 and 2021. The adverse development was driven by higher costs due to the current economic environment and increased litigation costs. Corporate 2022 For the three and six months ended June 30, 2022, net adverse PPD was $191 million and $199 million, respectively, driven by adverse development of $155 million for molestation claims, primarily from updated modeling and specific account reviews. The remainder of the adverse development was driven by increased claim costs on non-A&E runoff workers’ compensation exposures, and charges relating to run-off operating expenses incurred. 2021 For the three and six months ended June 30, 2021, net adverse PPD was $88 million and $97 million, respectively, driven by adverse development of $68 million for molestation claims. The remainder of the adverse development was driven by increased claim costs on non-A&E runoff workers’ compensation exposures, and charges relating to run-off operating expenses incurred.

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- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI https://asc.fasb.org/subtopic&trid=2560295 + Details
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