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Insurance Liabilities (Tables) | 6 Months Ended
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Jun. 30, 2024
Insurance [Abstract] |
Rollforward of Activity in Loss Reserves | The following table presents the rollforward of activity in loss reserves:
| Three Months Ended June 30, |  | Six Months Ended June 30, |  |
(in millions) |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |
Liability for unpaid loss and loss adjustment expenses, beginning of period | $ | 70,060 |  | $ | 75,793 |  |  | $ | 70,393 |  | $ | 75,167 |  |  |
Reinsurance recoverable |  | (30,169) |  |  | (32,366) |  |  |  | (30,289) |  |  | (32,102) |  |  |
Net Liability for unpaid loss and loss adjustment expenses, beginning of period |  | 39,891 |  |  | 43,427 |  |  |  | 40,104 |  |  | 43,065 |  |  |
Losses and loss adjustment expenses incurred: |  |  |  |  |  |  |  |  |  |  |
Current year |  | 3,546 |  |  | 3,945 |  |  |  | 6,911 |  |  | 7,729 |  |  |
Prior years, excluding discount and amortization of deferred gain |  | (108) |  |  | (107) |  |  |  | (108) |  |  | (134) |  |  |
Prior years, discount charge (benefit) |  | 62 |  |  | 54 |  |  |  | 168 |  |  | 148 |  |  |
Prior years, amortization of deferred gain on retroactive reinsurance(a) |  | (33) |  |  | (25) |  |  |  | (65) |  |  | (85) |  |  |
Total losses and loss adjustment expenses incurred |  | 3,467 |  |  | 3,867 |  |  |  | 6,906 |  |  | 7,658 |  |  |
Losses and loss adjustment expenses paid: |  |  |  |  |  |  |  |  |  |  |
Current year |  | (855) |  |  | (881) |  |  |  | (1,141) |  |  | (1,170) |  |  |
Prior years |  | (2,597) |  |  | (2,994) |  |  |  | (5,454) |  |  | (6,543) |  |  |
Total losses and loss adjustment expenses paid |  | (3,452) |  |  | (3,875) |  |  |  | (6,595) |  |  | (7,713) |  |  |
Other changes: |  |  |  |  |  |  |  |  |  |  |
Foreign exchange effect |  | (158) |  |  | (25) |  |  |  | (654) |  |  | 372 |  |  |
Retroactive reinsurance adjustment (net of discount)(b) |  | 186 |  |  | 47 |  |  |  | 178 |  |  | 59 |  |  |
Reclassified to held for sale, net of reinsurance recoverables(c) |  | — |  |  | (3,383) |  |  |  | (5) |  |  | (3,383) |  |  |
Total other changes |  | 28 |  |  | (3,361) |  |  |  | (481) |  |  | (2,952) |  |  |
Liability for unpaid loss and loss adjustment expenses, end of period: |  |  |  |  |  |  |  |  |  |  |
Net liability for unpaid losses and loss adjustment expenses |  | 39,934 |  |  | 40,058 |  |  |  | 39,934 |  |  | 40,058 |  |  |
Reinsurance recoverable(d) |  | 29,849 |  |  | 30,226 |  |  |  | 29,849 |  |  | 30,226 |  |  |
Total | $ | 69,783 |  | $ | 70,284 |  |  | $ | 69,783 |  | $ | 70,284 |  |  |
(a)Includes $39 million and $6 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 months ended June 30, 2024 and 2023, respectively, and $44 million and $13 million for the six months ended June 30, 2024 and 2023, respectively. (b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $23 million and $26 million for the three months ended June 30, 2024 and 2023 respectively, and $78 million and $96 million for the six months ended June 30, 2024 and 2023, respectively. (c)Represents change in loss reserves included in Liabilities held for sale for the six months ended June 30, 2024. For additional information, see Note 4. (d)Excludes $1.5 billion of Reinsurance recoverable reclassified to Assets held for sale on the Condensed Consolidated Balance Sheets at June 30, 2023.
Schedule of Components of Loss Reserve Discount | The following table presents the components of the loss reserve discount discussed above:
(in millions) |  | June 30, 2024 |  | December 31, 2023
U.S. workers' compensation | $ | 2,235 |  | $ | 2,337 |
Retroactive reinsurance |  | (1,026) |  |  | (1,104) |
Total reserve discount(a)(b) | $ | 1,209 |  | $ | 1,233 |
(a)Excludes $196 million and $196 million of discount related to certain long-tail liabilities in the UK at June 30, 2024 and December 31, 2023, respectively. (b)Includes gross discount of $673 million and $687 million, which was 100 percent ceded to Fortitude Re at June 30, 2024 and December 31, 2023, respectively.
Schedule of Loss Reserve Discount | The following table presents the net loss reserve discount benefit (charge):
| Three Months Ended June 30, |  | Six Months Ended June 30,
(in millions) |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |
Current accident year | $ | 36 |  | $ | 38 |  |  | $ | 66 |  | $ | 68 |  |  |
Accretion and other adjustments to prior year discount |  | (62) |  |  | (54) |  |  |  | (168) |  |  | (148) |  |  |
Net reserve discount benefit (charge) |  | (26) |  |  | (16) |  |  |  | (102) |  |  | (80) |  |  |
Change in discount on loss reserves ceded under retroactive reinsurance |  | 23 |  |  | 26 |  |  |  | 78 |  |  | 96 |  |  |
Net change in total reserve discount* | $ | (3) |  | $ | 10 |  |  | $ | (24) |  | $ | 16 |  |  |
*Excludes $2 million and $4 million discount related to certain long-tail liabilities in the UK for the three months ended June 30, 2024 and 2023, respectively, and excludes $0 million and $8 million discount related to certain long-tail liabilities in the UK for the six months ended June 30, 2024 and 2023, respectively.
Schedule of Activity for Future Policy Benefits Liability | The following tables present the balances and changes in the liability for future policy benefits and a reconciliation of the net liability for future policy benefits to the liability for future policy benefits in the Condensed Consolidated Balance Sheets:
Six Months Ended June 30, |  |  |
(in millions, except for liability durations) | 2024 |  | 2023
Present value of expected net premiums |  |  |
Balance, beginning of year | $ | 1,702 |  |  | $ | 1,929 |
Effect of changes in discount rate assumptions (AOCI) | 339 |  |  | 262 |
Beginning balance at original discount rate | 2,041 |  |  | 2,191 |
Effect of actual variances from expected experience | (7) |  |  | (26) |
Adjusted beginning of year balance | 2,034 |  |  | 2,165 |
Issuances | 54 |  |  | 67 |
Interest accrual | 21 |  |  | 21 |
Net premium collected | (208) |  |  | (117) |
Foreign exchange impact | (155) |  |  | (88) |
Ending balance at original discount rate | 1,746 |  |  | 2,048 |
Effect of changes in discount rate assumptions (AOCI) | (246) |  |  | (330) |
Balance, end of period | $ | 1,500 |  |  | $ | 1,718 |
Present value of expected future policy benefits |  |  |
Balance, beginning of year | $ | 2,149 |  |  | $ | 2,380 |
Effect of changes in discount rate assumptions (AOCI) | 441 |  |  | 362 |
Beginning balance at original discount rate | 2,590 |  |  | 2,742 |
Effect of actual variances from expected experience(a) | (8) |  |  | (16) |
Adjusted beginning of year balance | 2,582 |  |  | 2,726 |
Issuances | 56 |  |  | 70 |
Interest accrual | 26 |  |  | 26 |
Benefit payments | (212) |  |  | (122) |
Foreign exchange impact | (203) |  |  | (121) |
Ending balance at original discount rate | 2,249 |  |  | 2,579 |
Effect of changes in discount rate assumptions (AOCI) | (329) |  |  | (423) |
Balance, end of period | $ | 1,920 |  |  | $ | 2,156 |
Net liability for future policy benefits, end of period | $ | 420 |  |  | $ | 438 |
Deferred profit liability | 1 |  |  | 1 |
Other reconciling items(b) | 934 |  |  | 963 |
Future policy benefits for life and accident and health insurance contracts | 1,355 |  |  | 1,402 |
Less: Reinsurance recoverable | (761) |  |  | (754) |
Net liability for future policy benefits after reinsurance recoverable | $ | 594 |  |  | $ | 648 |
Weighted average liability duration of the liability for future policy benefits(c) | 9.0 |  | 9.9
(a)Effect of changes in cash flow assumptions and variances from actual experience are partially offset by changes in the deferred profit liability. (b)Other reconciling items primarily include Accident and Health (short-duration) contracts and $724 million and $713 million at June 30, 2024 and 2023, respectively, of certain long-duration contracts that are 100 percent ceded. (c)The weighted average liability durations are calculated as the modified duration using projected future net liability cash flows that are aggregated at the segment level, utilizing the segment level weighted average interest rates and current discount rate, which can be found in the table below. The following table presents the amount of undiscounted expected future benefit payments and undiscounted and discounted expected gross premiums for future policy benefits for nonparticipating contracts:
Six Months Ended June 30, |  |  |  |  |  |
(in millions) |  | 2024 |  | 2023 |  |
Undiscounted expected future benefits and expense |  | $ | 2,760 |  |  | $ | 3,165 |  |  |
Undiscounted expected future gross premiums |  | 3,791 |  |  | 4,383 |  |  |
Discounted expected future gross premiums (at current discount rate) |  | 2,737 |  |  | 3,109 |  |  |
The following table presents the amount of revenue and interest recognized in the Condensed Consolidated Statements of Income (Loss) for future policy benefits for nonparticipating contracts:
Six Months Ended June 30, |  |  |  |  |  |  |  |  |  |  |  |
(in millions) |  |  |  |  |  |  |  |  | 2024 |  | 2023 |  |  |  |  |
Gross Premiums |  |  |  |  |  |  |  |  | $ | 209 |  |  | $ | 232 |  |  |  |  |  |
Interest Accretion |  |  |  |  |  |  |  |  | $ | 4 |  |  | $ | 4 |  |  |  |  |  |
The following table presents the weighted-average interest rate for future policy benefits for nonparticipating contracts:
Six Months Ended June 30, | 2024 |  | 2023
Weighted-average interest rate, original discount rate | 1.86 | % |  | 1.81 | %
Weighted-average interest rate, current discount rate | 3.56 | % |  | 3.59 | %

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