XML 88 R20.htm IDEA: XBRL DOCUMENT

Reserve for Future Policy Benefits

12 Months Ended

Dec. 31, 2023

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the years ended December 31,
	2023		2022		2021
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	33,083	$	31,449	$	29,622
Reinsurance and other recoverables	6,465		6,081		5,725
Beginning liabilities for unpaid losses and loss adjustment expenses, net	26,618		25,368		23,897
Provision for unpaid losses and loss adjustment expenses
Current accident year	9,538		8,577		7,911
Prior accident year development [1]	10		36		199
Total provision for unpaid losses and loss adjustment expenses	9,548		8,613		8,110
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	(194)		(229)		(246)
Payments
Current accident year	(2,716)		(2,424)		(2,276)
Prior accident years	(5,926)		(4,678)		(4,119)
Total payments	(8,642)		(7,102)		(6,395)

Foreign currency adjustment	18		(32)		2
Ending liabilities for unpaid losses and loss adjustment expenses, net	27,348		26,618		25,368
Reinsurance and other recoverables	6,696		6,465		6,081
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	34,044	$	33,083	$	31,449

[1]Prior accident year development does not include the benefit of a portion of losses ceded under the Navigators and A&E ADC which, under retroactive reinsurance accounting, is deferred and is recognized over the period the ceded losses are recovered in cash from National Indemnity Company ("NICO"), a subsidiary of Berkshire Hathaway Inc. For additional information regarding the two adverse development cover reinsurance agreements, refer to Adverse Development Covers discussion below.

Property and Casualty Insurance Products Reserves, Net of Reinsurance, that are Discounted


	For the years ended December 31,
	2023						2022						2021
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	1,255					$	1,343					$	1,405
Amount of discount	339						347						355
Carrying value of liability for unpaid losses and loss adjustment expenses	$	916					$	996					$	1,050
Discount accretion included in losses and loss adjustment expenses	$	42					$	36					$	36
Weighted average discount rate	2.74					%	2.71					%	2.54					%
Range of discount rates	0.83		%	-	14.03	%	0.83		%	-	14.03	%	0.83		%	-	14.03	%

Reserves are discounted at rates in effect at the time claims were incurred, ranging from 0.83% for accident year 2020 to 14.03% for accident year 1981.

The reserves recorded for the Company’s property and casualty insurance products at December 31, 2023 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant uncertainties surrounding reserves it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to the Company’s results of operations or cash flows.

Losses and loss adjustment expenses are also impacted by trends including frequency and severity as well as changes in the legislative and regulatory environment. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty in the ultimate settlement of the liabilities gross of reinsurance include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures before reinsurance, factors contributing to the high degree of uncertainty in gross reserves include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

(Favorable) Unfavorable Prior Accident Year Development


	For the years ended December 31,
	2023		2022		2021
Workers’ compensation	$	(236)	$	(204)	$	(190)
Workers’ compensation discount accretion	42		36		35
General liability	41		56		454
Marine	(2)		2		1
Package business	(24)		(39)		(91)
Commercial property	(7)		(11)		(26)
Professional liability	(2)		(11)		(2)
Bond	(27)		(32)		(26)
Assumed reinsurance	34		19		(6)
Automobile liability - Commercial Lines	20		38		9
Automobile liability - Personal Lines	—		(14)		(90)
Homeowners	(6)		(1)		3


Net asbestos and environmental reserves	—		—		—
Catastrophes	(87)		(62)		(154)
Uncollectible reinsurance	13		3		(6)
Other reserve re-estimates, net	57		27		42
Prior accident year development, including full benefit for the ADC cession	(184)		(193)		(47)
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	194		229		246
Total prior accident year development	$	10	$	36	$	199

[1]The change in deferred gain for the years ended December 31, 2023, 2022 and 2021 included $194, $229 and $155, respectively of adverse development on A&E reserves in excess of ceded premium paid and included $0, $0 and $91 respectively, of adverse development on Navigators 2018 and prior accident year reserves ceded to NICO, primarily within professional liability, general liability and marine.

2023 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased within the 2014 to 2020 accident years primarily in small commercial, driven by lower than previously estimated claim

severity. In addition, the majority of the 2020 accident year relates to a $38 reduction of COVID-19 related reserves.

General liability reserves were increased driven by higher frequency and estimated cost to settle large individual claims for the 2016 to 2019 accident years, partially offset by a decrease in reserves for the 2020 accident year due to favorable experience. In addition, reserves for sexual molestation and sexual abuse claims were increased for older accident years. Also included was a decrease in reserves for extra contractual liability claims and other miscellaneous run-off lines.

Package business reserves decreased primarily due to lower than previously estimated property severity for accident year 2019 and 2021. Package liability is flat overall with reserve increases related to higher severity across multiple accident years offset by improvement in accident year 2020 due to favorable claim count emergence.

Commercial property reserves decreased primarily due to favorable development for accident years 2018 and 2021. In accident year 2022, unfavorable development in middle & large commercial was offset by favorable development in global specialty.

Professional liability reserves decreased modestly due to favorable development on directors' and officers' ("D&O") claims driven by the 2020 and 2021 accident years, partially offset by deterioration in 2019 and prior accident years experience across errors and omissions and other claims.

Bond reserves decreased primarily due to improvement in fidelity in 2013 and prior accident years, as well as improvement in contract surety in 2019 and prior accident years, partially offset by unfavorable development for 2013 and prior accident years related to customs bonds.

Assumed reinsurance reserves were increased due to higher reserve estimates in the Latin America casualty and surety business.

Automobile liability reserves - Commercial Lines increased primarily due to adverse loss development from elevated large loss frequency and severity pressures within middle & large commercial for accident year 2022, as well as unfavorable experience in accident year 2019, partly offset by favorable development in accident years 2020 and 2021.

Automobile liability reserves - Personal Lines were flat as increases for accident year 2022 from higher estimated severity and increasing attorney representation rates were fully offset by decreases, primarily within accident years 2019 to 2021, due to lower estimated severity.

Catastrophe reserves were decreased primarily within Commercial Lines driven by a reduction in reserves in accident year 2022 for Hurricane Ian and accident year 2021 for Hurricane Ida.

Uncollectible reinsurance was increased primarily in Commercial Lines related to a captive reinsurer and, to a lesser extent, an increase in reserves for potential collection disputes and credit concerns.

Other reserve re-estimates, net, were increased primarily due to an increase in unallocated loss adjustment expense ("ULAE") reserves within P&C Other Operations driven by an increase in gross asbestos and environmental reserves, as well as an increase in accident year 2022 Personal Lines automobile physical damage severity.

Asbestos and environmental reserves were reviewed in fourth quarter 2023 resulting in a $194 increase in reserves before ADC reinsurance, including $156 for asbestos and $38 for environmental. The Company recognized a $194 deferred gain on retroactive reinsurance, representing the amount of losses ceded to the ADC in excess of ceded premium paid. For additional information related to the adverse development cover with NICO, see the Adverse Development Covers section below and Note 15 - Commitments and Contingencies.

2022 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased for the 2014 through 2018 accident years, predominately within small commercial, and to a lesser extent in middle & large commercial, driven by lower than previously estimated claim severity and, to a lesser extent, a $14 reduction of COVID-19 related claims from 2020.

General liability reserves were increased, driven by an increase in the estimated cost to settle large individual claims in middle & large commercial for the 2016 to 2019 accident years, an increase in excess casualty and environmental in recent accident years, and increases in primary construction on older accident years, partially offset by a decrease in reserves for other mass torts.

Package business reserves decreased due to lower estimated severity and lower estimated loss adjustment expenses for accident years 2018 and prior, and a reduction in property reserves for the 2020 and 2021 accident years.

Commercial property reserves were decreased primarily due to favorable development for the 2020 accident year in middle & large commercial related to COVID-19 claims.

Professional liability reserves were decreased primarily due to favorable development on D&O claims for the 2018 to 2020 accident years and on errors and omissions claims for the 2013 to 2017 accident years, partially offset by large losses related to 2018 and prior accident years for primary and excess D&O claims.

Bond reserves were decreased primarily in contract surety due to favorable development on older accident years.

Assumed reinsurance reserves were increased primarily due to higher reserve estimates for syndicate property claims, including higher expected COVID-19 property losses in the 2020 accident year and increased reserves for international agriculture related to drought claims. Also contributing were reserve increases for Latin America P&C and specialty casualty business in recent accident years.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on AARP Direct claims, primarily within accident years 2015 to 2020 and were increased in Commercial Lines principally due to a higher number of large claims in accident years 2017 to 2019, along with decreasing settlement rates and increasing attorney rep rates.

Catastrophes reserves were decreased in both Commercial and Personal Lines with the largest reduction related to 2019 and 2020 wind and hail events.

Asbestos and environmental reserves were reviewed in fourth quarter 2022 resulting in a $229 increase in reserves before ADC reinsurance, including $162 for asbestos and $67 for environmental. The Company recognized a $229 deferred gain on retroactive reinsurance, representing the amount of losses ceded to the ADC in excess of ceded premium paid. For additional information related to the adverse development cover with NICO, see the Adverse Development Covers section below and Note 15 - Commitments and Contingencies.

Other reserve re-estimates, net, were increased primarily due to an increase in ULAE reserves within P&C Other Operations driven by an increase in gross asbestos and environmental reserves, as well as unfavorable development from participation in involuntary market pools, and increased automobile physical damage severity.

2021 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased within small commercial and middle & large commercial for the 2013 through 2018 accident years driven by lower than previously estimated claim severity.

General liability reserves were increased including an increase for sexual molestation and sexual abuse claims above the amount of reserves previously recorded for this exposure, primarily to reflect an increase in reserves for claims made against the Boy Scouts of America ("BSA") as discussed further below, partially offset by reserve decreases for other mass torts and extra contractual liability claims. In addition, the Company recognized reserve increases on Navigators’ wholesale construction business for 2018 and prior accident years, largely included within the change in deferred gain on retroactive reinsurance in the above table.

Package business reserves decreased largely due to lower estimated loss adjustment expenses for accident years 2014 to 2018 and a reduction in estimated reserves for extra contractual liability claims.

Commercial property reserves were decreased primarily due to favorable development for the 2020 accident year in both middle & large commercial and global specialty.

Professional liability reserves were decreased due to lower estimated severity in both large and middle market D&O insurance for older accident years. More than offsetting this favorable reserve development were reserve increases on legacy Navigators public company D&O insurance for 2019 and

prior accident years, a portion of which is reflected within the change in deferred gain on retroactive reinsurance in the above table.

Bond reserves were reduced mostly due to favorable emergence on contract surety claims driven by higher than previously anticipated recoveries, largely for the 2016 to 2017 accident years.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on AARP Direct and Agency claims, primarily within accident years 2017 to 2020, and a reduction in estimated reserves for extra contractual liability claims.

Catastrophes reserves were decreased in both Commercial and Personal Lines primarily driven by a reduction in reserves for 2018 and 2019 wind and hail events, lower estimated losses from 2018 and 2020 hurricanes, a reduction in estimated losses from the 2017 and 2018 California wildfires, including an expected recovery of subrogation from a utility related to the 2018 Woolsey wildfire in California, and a reduction in losses relating to the 2020 civil unrest.

Asbestos and environmental reserves were reviewed in fourth quarter 2021 resulting in a $155 increase in reserves before ADC reinsurance, including $106 for asbestos and $49 for environmental. The Company recognized a $155 deferred gain on retroactive reinsurance, representing the amount of losses ceded to the ADC in excess of ceded premium paid. For additional information related to the adverse development cover with NICO, see the Adverse Development Covers section below and Note 15 - Commitments and Contingencies.

Other reserve re-estimates, net, were increased primarily due to an increase in reserves for sexual molestation and sexual abuse claims within P&C Other Operations, principally on assumed reinsurance, as well as an increase in ULAE reserves within P&C Other Operations driven by an increase in gross asbestos and environmental reserves.

Settlement Agreement with Boy Scouts of America

On February 14, 2022, the Company executed a final settlement agreement (the “Settlement”) with the BSA, the Local Councils, and the attorneys representing a majority of the alleged victims, pursuant to which The Hartford agreed to pay $787 for sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford Writing Companies in the 1970s and early 1980s. In exchange for its payment, the Company receives a complete release of its policies issued to BSA and the Local Councils, as well as an injunction against further abuse claims involving BSA. All conditions precedent to the Settlement have been satisfied, including approval by the bankruptcy court and the district court, and on April 20, 2023, The Hartford paid the Settlement amount of $787. Certain objecting parties have appealed the district court’s ruling and that appeal is pending before the Third Circuit. If the court approvals for the BSA’s plan of reorganization are not affirmed on appeal, it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s operating results.

Adverse Development Covers

The Company has an adverse development cover reinsurance agreement with NICO, a subsidiary of Berkshire Hathaway Inc., to reinsure loss development after 2016 on substantially all of the Company’s asbestos and environmental reserves (the “A&E ADC”). Under the A&E ADC, the Company paid a reinsurance premium of $650 for NICO to assume adverse net loss reserve development up to $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion including reserves for A&E exposure for accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E") and reserves for A&E exposure for accident years 1986 and subsequent from policies underwritten prior to 2016 that are reported in ongoing Commercial Lines and Personal Lines. The $650 reinsurance premium was placed into a collateral trust account as security for NICO’s claim payment obligations to the Company. The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions. The A&E ADC covers substantially all the Company’s A&E reserve development up to the reinsurance limit.

Under retroactive reinsurance accounting, net adverse A&E reserve development after December 31, 2016 results in an offsetting reinsurance recoverable up to the $1.5 billion limit. Cumulative ceded losses up to the $650 reinsurance premium paid have been recognized as a dollar-for-dollar offset to direct losses incurred. Cumulative ceded losses exceeding the $650 reinsurance premium paid result in a deferred gain. As of December 31, 2023, the Company has incurred $1,438 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO with $62 of available limit remaining under the A&E ADC. As a result, the Company has recorded a

$788 deferred gain within other liabilities, representing the difference between the reinsurance recoverable of $1,438 and ceded premium paid of $650. The deferred gain is recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. Consequently, until periods when the deferred gain is recognized as a benefit to earnings, cumulative adverse development of asbestos and environmental claims will result in charges against earnings which may be significant.

Immediately after closing on the acquisition of Navigators Group, effective May 23, 2019, the Company purchased the Navigators ADC, an aggregate excess of loss reinsurance agreement covering adverse reserve development, from NICO on behalf of Navigators Insurance Company and certain of its affiliates (collectively, “Navigators Insurers"). Under the Navigators ADC, the Navigators Insurers paid NICO a reinsurance premium of $91 in exchange for reinsurance coverage of $300 of adverse net loss reserve development that attaches $100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $1.816 billion for accidents and losses prior to December 31, 2018.

As of December 31, 2023, the Company has recorded a reinsurance recoverable under the Navigators ADC of $300 as estimated cumulative loss development on the 2018 and prior accident year reserves has exhausted the treaty limit. While the reinsurance recoverable is $300, the Company has recorded a $209 cumulative deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $91 of ceded premium paid must be recognized as a deferred gain. Of the $209 of cumulative ceded losses in excess of ceded premium paid, $0, $0 and $91 were recognized as changes in deferred gain in 2023, 2022 and 2021, respectively.

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses As of December 31, 2023


	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance										Subtotal
Reserve Line	Cumulative Incurred for Accident Years Displayed in Triangles		Cumulative Paid for Accident Years Displayed in Triangles		Unpaid for Accident Years not Displayed in Triangles		Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance		Discount			Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance		Reinsurance and Other Recoverables		Liability for Unpaid Losses and Loss Adjustment Expenses
Workers' compensation	$	18,050	$	(9,482)	$	3,581	$	388	$	(325)		$	12,212	$	1,651	$	13,863
General liability	8,271		(3,772)		497		172		—			5,168		1,160		6,328
Marine	1,452		(1,182)		11		14		—			295		255		550
Package business	7,856		(5,797)		102		120		—			2,281		54		2,335
Commercial property	4,068		(3,568)		13		27		—			540		271		811
Commercial automobile liability	4,243		(2,945)		21		32		—			1,351		99		1,450
Commercial automobile physical damage	215		(194)		3		1		—			25		—		25
Professional liability	2,846		(1,511)		68		46		—			1,449		734		2,183
Bond	680		(284)		26		36		—			458		14		472
Assumed Reinsurance	1,798		(1,242)		—		6		—			562		44		606
Personal automobile liability	10,874		(9,393)		29		62		—			1,572		27		1,599
Personal automobile physical damage	1,535		(1,462)		7		4		—			84		—		84
Homeowners	6,009		(5,677)		5		35		—			372		4		376
Other ongoing business					170		5		(14)			161		347		508
Asbestos and environmental [1]					340		—		—			340		1,992		2,332
Other operations [1]					317		161		—			478		44		522
Total P&C	$	67,897	$	(46,509)	$	5,190	$	1,109	$	(339)		$	27,348	$	6,696	$	34,044

[1]Asbestos and environmental and other operations include asbestos, environmental and other latent exposures not foreseen when coverages were written, including, but not limited to, potential liability for pharmaceutical products, silica, talcum powder, head injuries, lead paint, construction defects, sexual molestation and sexual abuse and other long-tail liabilities. These reserve lines do not have significant paid or incurred loss development for the most recent ten accident years and therefore do not have loss development displayed in triangles.

The reserve lines in the above table and the loss triangles that follow represent the significant lines of business for which the Company regularly reviews the appropriateness of reserve levels. These reserve lines differ from the reserve lines reported on a statutory basis, as prescribed by the National Association of Insurance Commissioners ("NAIC"). The cumulative incurred losses displayed in the above table include the full reinsurance benefit of ceding $300 of losses to the Navigators ADC even though $209 of that benefit has been recorded as a deferred gain within other liabilities. The $300 of Navigators Insurers losses ceded to the Navigators ADC and reflected in the following triangles include $95 for professional liability, $105 for general liability, $38 for marine, $27 for assumed reinsurance, $14 for commercial automobile, $3 for commercial property, and $1 for bond. The triangles do not include $17 of losses ceded to the Navigators ADC related to older accident years and lines of business not in the triangles.

The following loss triangles present historical loss development for incurred and paid claims by accident year, including loss development on Navigators Insurers reserves prior to and after the May 23, 2019 acquisition date. Because the loss triangles include pre-acquisition date changes in ultimate incurred loss

estimates for Navigators Insurers’ reserves, changes in reserve development evident in the incurred loss triangles may differ from prior accident year development ("PYD") recorded by the Company as shown in the (Favorable) Unfavorable Prior Accident Year Development table above as that only includes changes in Navigators Insurers’ reserves post acquisition. In addition, the incurred loss triangles include reserve development on both catastrophe and non-catastrophe claims whereas the (Favorable) Unfavorable Prior Accident Year Development table above shows the total amount of catastrophe reserve development across all lines of business on a single line.

Triangles are limited to the number of years for which claims incurred typically remain outstanding, not exceeding ten years. Short-tail lines, which represent claims generally expected to be paid within a few years, have three years of claim development displayed. IBNR reserves shown in loss triangles include reserves for incurred but not reported claims as well as reserves for expected development on reported claims. Incurred and cumulative paid losses in currencies other than the U.S. dollar have been converted into U.S. dollars using the exchange rates as of December 31, 2023.

Workers' Compensation


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	1,869	$	1,838	$	1,789	$	1,761	$	1,713	$	1,692	$	1,679	$	1,654	$	1,637	$	1,615	$	327	126,753
2015			1,873		1,835		1,801		1,724		1,714		1,699		1,667		1,645		1,625		344		114,644
2016					1,772		1,772		1,780		1,767		1,748		1,708		1,670		1,634		375		112,675
2017							1,862		1,869		1,840		1,822		1,757		1,665		1,635		442		112,215
2018									1,916		1,917		1,915		1,904		1,870		1,836		524		119,524
2019											1,937		1,935		1,934		1,934		1,899		606		120,486
2020													1,865		1,864		1,849		1,808		766		91,762
2021															1,831		1,832		1,831		791		102,180
2022																	2,000		2,001		1,049		112,597
2023																			2,166		1,575		108,987
Total																			$	18,050


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	275	$	598	$	811	$	960	$	1,041	$	1,099	$	1,137	$	1,167	$	1,191	$	1,207
2015			261		576		778		909		1,004		1,068		1,117		1,151		1,179
2016					255		579		779		908		1,003		1,064		1,110		1,145
2017							261		575		778		900		977		1,035		1,087
2018									283		624		837		983		1,090		1,170
2019											291		637		856		1,007		1,129
2020													223		507		695		850
2021															254		562		780
2022																	293		649
2023																			286
Total																			$	9,482

General Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	506	$	475	$	481	$	494	$	513	$	522	$	515	$	505	$	510	$	506	$	33	16,609
2015			556		560		554		594		633		647		637		647		641		51		16,786
2016					613		583		607		632		632		620		636		670		65		17,833
2017							626		614		613		615		613		615		658		92		17,377
2018									692		669		697		703		728		751		158		18,783
2019											822		826		821		839		859		259		18,432
2020													938		923		923		874		496		14,006
2021															1,002		991		983		676		11,943
2022																	1,116		1,110		873		11,167
2023																			1,219		1,173		7,835
Total																			$	8,271


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	15	$	42	$	130	$	214	$	304	$	358	$	402	$	423	$	437	$	456
2015			10		55		156		278		409		477		524		547		564
2016					12		52		131		283		368		446		513		564
2017							15		67		156		255		344		441		506
2018									21		83		177		288		409		512
2019											29		100		192		339		501
2020													45		110		202		308
2021															34		115		209
2022																	26		135
2023																			17
Total																			$	3,772

Marine


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves [1]		Claims Reported
2014	$	164	$	161	$	159	$	166	$	165	$	170	$	169	$	173	$	172	$	168	$	(1)	7,500
2015			159		147		147		149		134		139		141		144		141		—		10,374
2016					140		144		139		149		150		148		150		160		(6)		13,616
2017							154		174		161		160		166		169		176		(3)		16,101
2018									131		147		141		147		153		157		(15)		10,678
2019											139		136		134		129		127		(1)		7,085
2020													145		138		134		138		6		5,108
2021															127		128		119		29		5,161
2022																	140		132		38		4,855
2023																			134		85		3,297
Total																			$	1,452

[1]Contributing to the negative IBNR reserves for some accident years is a lag in the timing of expected reinsurance recoveries under the Navigators ADC with NICO. Recoveries from NICO will not be collected until the Company has cumulative loss payments for all covered lines of more than the attachment point.


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	41	$	81	$	117	$	132	$	152	$	157	$	160	$	162	$	165	$	166
2015			40		86		117		126		134		140		141		143		143
2016					36		81		106		123		132		141		144		147
2017							47		107		134		143		151		162		171
2018									33		95		126		135		142		159
2019											34		80		96		106		115
2020													32		68		90		99
2021															25		63		87
2022																	27		72
2023																			23
Total																			$	1,182

Package Business


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	566	$	578	$	601	$	602	$	603	$	603	$	593	$	581	$	576	$	577	$	18	43,611
2015			582		588		585		583		588		581		567		564		564		15		42,415
2016					655		638		632		625		611		595		591		590		33		44,318
2017							695		702		692		657		644		637		640		43		46,880
2018									719		724		688		667		655		654		60		45,254
2019											813		769		749		744		747		81		43,820
2020													915		893		877		837		147		62,738
2021															946		954		958		235		47,187
2022																	1,038		1,039		317		45,649
2023																			1,250		570		40,286
Total																			$	7,856


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	226	$	345	$	416	$	468	$	507	$	525	$	535	$	542	$	545	$	551
2015			212		332		383		445		486		505		513		530		542
2016					225		353		410		465		500		521		540		545
2017							235		372		447		496		534		561		578
2018									237		402		451		498		537		571
2019											254		413		488		571		626
2020													326		493		573		648
2021															368		556		650
2022																	319		633
2023																			453
Total																			$	5,797

Commercial Property


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	293	$	281	$	282	$	280	$	280	$	280	$	280	$	279	$	279	$	279	$	(1)	21,124
2015			299		301		302		302		306		304		302		302		301		1		21,149
2016					406		420		400		407		409		409		406		406		(1)		24,099
2017							578		516		456		439		441		438		440		3		24,727
2018									450		436		424		403		400		393		(3)		21,916
2019											480		439		418		420		421		—		21,105
2020													501		469		439		437		54		20,573
2021															530		500		463		45		18,285
2022																	497		480		71		17,350
2023																			448		140		15,390
Total																			$	4,068


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	170	$	250	$	270	$	279	$	279	$	279	$	280	$	280	$	280	$	280
2015			179		257		285		296		302		303		302		302		302
2016					215		343		379		396		402		407		407		408
2017							229		378		412		427		433		439		440
2018									188		344		378		385		394		394
2019											215		351		383		405		407
2020													221		336		355		366
2021															241		382		403
2022																	180		369
2023																			199
Total																			$	3,568

Commercial Automobile Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	309	$	317	$	331	$	337	$	341	$	334	$	333	$	332	$	332	$	332	$	4	30,171
2015			308		358		372		356		356		359		360		358		360		6		28,745
2016					385		393		390		391		391		395		395		396		7		29,260
2017							372		383		379		383		381		394		398		2		26,411
2018									349		396		405		406		424		433		21		24,799
2019											425		439		450		460		471		30		28,573
2020													428		424		419		397		79		22,194
2021															440		443		429		157		19,999
2022																	468		500		238		20,384
2023																			527		403		18,107
Total																			$	4,243


Cumulative Paid Losses & Allocated Loss Adjustment Expense, Net of Reinsurance
	For the years ended December 31
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	59	$	131	$	197	$	252	$	299	$	309	$	318	$	320	$	325	$	328
2015			62		142		207		267		314		335		344		348		350
2016					65		147		232		303		339		357		379		385
2017							60		134		211		285		328		368		386
2018									62		153		238		305		360		387
2019											67		160		247		327		393
2020													55		119		200		264
2021															55		127		212
2022																	64		171
2023																			69
Total																			$	2,945

Commercial Automobile Physical Damage


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2021		2022		2023		IBNR Reserves		Claims Reported







2021	$	58	$	62	$	61	$	1	15,490
2022			70		74		1		16,713
2023					80		10		15,610
Total					$	215


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2021		2022		2023







2021	$	51	$	61	$	61
2022			59		72
2023					61
Total					$	194

Professional Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves [1]		Claims Reported
2014	$	187	$	183	$	181	$	178	$	179	$	182	$	183	$	174	$	169	$	167	$	6	6,751
2015			164		174		180		190		214		207		200		197		198		(3)		7,266
2016					183		176		203		197		195		196		194		192		2		8,443
2017							205		203		231		226		239		242		217		5		9,514
2018									244		275		271		271		267		326		47		9,863
2019											295		313		330		347		355		77		9,921
2020													369		363		336		325		156		7,994
2021															339		343		327		207		6,698
2022																	349		355		265		7,033
2023																			384		338		6,725
Total																			$	2,846


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	8	$	38	$	74	$	108	$	131	$	135	$	146	$	145	$	151	$	157
2015			9		41		86		108		125		141		164		175		186
2016					8		51		88		111		124		148		167		177
2017							11		48		87		122		149		179		191
2018									15		72		127		161		195		233
2019											21		77		148		198		241
2020													19		71		118		147
2021															15		55		95
2022																	18		64
2023																			20
Total																			$	1,511

Bond


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	71	$	67	$	66	$	67	$	59	$	59	$	60	$	60	$	64	$	62	$	10	1,393
2015			67		67		63		60		54		48		47		42		37		12		1,411
2016					61		61		61		55		51		45		37		34		14		1,344
2017							63		90		101		94		79		70		68		25		1,793
2018									68		68		72		71		70		63		32		1,737
2019											72		73		74		73		71		53		1,890
2020													83		84		79		83		55		2,201
2021															85		85		88		62		2,870
2022																	85		93		42		2,456
2023																			81		71		1,414
Total																			$	680


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	18	$	31	$	40	$	43	$	43	$	44	$	46	$	47	$	52	$	52
2015			9		20		24		31		34		32		30		25		25
2016					2		12		15		20		22		22		22		20
2017							5		46		55		54		42		43		43
2018									6		16		23		24		29		29
2019											3		13		15		16		16
2020													4		12		21		26
2021															8		21		23
2022																	11		42
2023																			8
Total																			$	284

Assumed Reinsurance


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves [1]		Claims Reported
2014	$	119	$	142	$	122	$	118	$	115	$	116	$	116	$	115	$	116	$	116	$	(1)	1,934
2015			102		92		95		94		95		96		96		96		96		(1)		1,723
2016					89		91		98		100		102		102		102		104		(2)		1,975
2017							129		153		162		157		153		155		155		(3)		2,557
2018									128		127		129		134		136		132		(17)		3,026
2019											181		189		186		190		209		22		3,710
2020													183		181		187		179		29		3,177
2021															192		196		204		41		2,431
2022																	266		274		101		1,971
2023																			329		188		977
Total																			$	1,798


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	66	$	119	$	106	$	109	$	112	$	113	$	115	$	115	$	115	$	116
2015			42		65		77		83		91		94		95		96		96
2016					36		66		85		90		95		97		99		101
2017							44		116		135		145		147		149		151
2018									25		111		133		139		142		144
2019											62		132		153		159		176
2020													50		89		113		133
2021															46		102		133
2022																	60		129
2023																			63
Total																			$	1,242

Personal Automobile Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	1,146	$	1,153	$	1,198	$	1,200	$	1,199	$	1,202	$	1,201	$	1,199	$	1,199	$	1,199	$	5	209,028
2015			1,195		1,340		1,338		1,330		1,331		1,328		1,324		1,320		1,319		3		216,908
2016					1,407		1,402		1,393		1,397		1,395		1,386		1,384		1,384		3		215,868
2017							1,277		1,275		1,228		1,214		1,200		1,198		1,197		6		187,557
2018									1,108		1,104		1,072		1,058		1,056		1,055		22		156,286
2019											1,018		1,010		991		986		971		21		139,723
2020													805		782		775		741		37		96,668
2021															881		886		852		101		101,842
2022																	928		1,018		235		106,927
2023																			1,138		586		99,620
Total																			$	10,874


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	430	$	843	$	1,032	$	1,125	$	1,165	$	1,182	$	1,186	$	1,190	$	1,192	$	1,193
2015			475		935		1,142		1,243		1,292		1,304		1,310		1,313		1,314
2016					505		968		1,188		1,308		1,345		1,363		1,373		1,377
2017							441		836		1,033		1,123		1,161		1,180		1,187
2018									359		710		888		965		1,011		1,028
2019											323		654		816		897		933
2020													238		486		615		679
2021															247		553		691
2022																	301		662
2023																			329
Total																			$	9,393

Personal Automobile Physical Damage


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2021		2022		2023		IBNR Reserves		Claims Reported







2021	$	412	$	413	$	412	$	1	225,735
2022			533		549		10		239,278
2023					574		27		222,805
Total					$	1,535


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2021		2022		2023







2021	$	388	$	411	$	411
2022			498		538
2023					513
Total					$	1,462

Homeowners


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	710	$	707	$	702	$	700	$	698	$	698	$	698	$	698	$	698	$	699	$	—	121,928
2015			690		703		690		684		684		684		684		684		682		—		120,017
2016					669		673		663		658		658		658		658		658		—		119,815
2017							866		889		884		783		775		774		771		5		124,772
2018									903		910		673		642		639		645		11		102,905
2019											501		475		470		468		467		4		84,781
2020													525		512		513		505		12		88,502
2021															502		501		491		14		77,212
2022																	499		507		27		63,841
2023																			584		115		63,662
Total																			$	6,009


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	526	$	663	$	684	$	691	$	695	$	697	$	697	$	698	$	698	$	698
2015			487		645		665		674		680		681		681		682		682
2016					481		621		640		649		653		655		656		657
2017							538		747		795		757		761		762		761
2018									484		712		616		619		627		626
2019											318		425		445		458		460
2020													335		454		478		486
2021															305		440		464
2022																	298		453
2023																			390
Total																			$	5,677

Property and casualty reserves, including IBNR

The Company estimates ultimate losses and allocated loss adjustment expenses ("ALAE") by accident year. IBNR represents the excess of estimated ultimate loss reserves over case reserves. The process to estimate ultimate losses and loss adjustment expenses is an integral part of the Company's reserve setting. Reserves for ALAE and ULAE are generally established separate from the reserves for losses.

Reserves for losses are set by line of business within the reporting segments. Case reserves are established by a claims handler on each individual claim and are adjusted as new information becomes known during the course of handling the claim. Lines of business for which reported losses emerge over a long period of time are referred to as long-tail lines of business. Lines of business for which reported losses emerge

more quickly are referred to as short-tail lines of business. The Company’s shortest tail lines of business are homeowners, commercial property and automobile physical damage. The longest tail lines of business include workers’ compensation, general liability and professional liability. For short-tail lines of business, emergence of paid loss and case reserves is credible and likely indicative of ultimate losses. For long-tail lines of business, emergence of paid losses and case reserves is less credible in the early periods after a given accident year and, accordingly, may not be indicative of ultimate losses.

The Company’s reserving actuaries regularly review reserves for both current and prior accident years using the most current claim data. A variety of actuarial methods and judgments are used for most lines of business to arrive at selections of estimated ultimate losses and loss adjustment expenses. The

reserve selections incorporate input, as appropriate, from claims personnel, pricing actuaries and operating management about reported loss cost trends and other factors that could affect the reserve estimates.

For both short-tail and long-tail lines of business, an expected loss ratio ("ELR") is used to record initial reserves. This ELR is determined by starting with the average loss ratio of recent prior accident years and adjusting that ratio for the effect of expected changes to earned pricing, loss frequency and severity, mix of business, ceded reinsurance and other factors. For short-tail lines, IBNR for the current accident year ("CAY") is initially recorded as the product of the ELR for the period, earned premium for the period and the proportion of losses expected to be reported in future calendar periods for the current accident period. For long-tailed lines, IBNR reserves for the current accident year are initially recorded as the product of the ELR for the period and the earned premium for the period, less reported losses for the period. For certain short-tailed lines of business, including commercial property, homeowners, and automobile physical damage, IBNR amounts in the above loss development triangles are negative in certain accident years due to anticipated salvage and subrogation recoveries on paid losses.

As losses for a given accident year emerge or develop in subsequent periods, reserving actuaries use other methods to estimate ultimate unpaid losses in addition to the ELR method. These primarily include paid and reported loss development methods, frequency/severity techniques and the Bornhuetter-Ferguson method (a combination of the ELR and paid development or reported development method). Within any one line of business, the methods that are given more weight vary based primarily on the maturity of the accident year, the mix of business and the particular internal and external influences impacting the claims experience or the methods. The output of the reserve reviews are reserve estimates that are referred to as actuarial indications.

Paid development and reported development techniques are used for most lines of business though more weight is given to the reported development method for some of the long-tailed lines like general liability. In addition, for long-tailed lines of business, the Company relies on the ELR method for immature accident years. Frequency/severity techniques are used predominantly for professional liability and are also used for automobile liability. The Berquist-Sherman technique is also

used for automobile liability, marine and assumed reinsurance. For most lines, reserves for ALAE, or those expenses related to specific claims) are analyzed using paid development techniques and an analysis of the relationship between ALAE and loss payments. For most of the lines acquired through the Navigators Group book of business, loss and ALAE are reviewed on a combined basis. Reserves for ULAE are determined using the expected cost per claim year and the anticipated claim closure pattern as well as the ratio of paid ULAE to paid losses.

The recorded reserve for losses and loss adjustment expenses represents the Company's best estimate of the ultimate settlement amount of unpaid losses and loss adjustment expenses. In applying judgment, the best estimate is selected after considering the estimates derived from a number of actuarial methods, giving more weight to those methods deemed more predictive of ultimate unpaid losses and loss adjustment expenses. The Company does not produce a statistical range or confidence interval of reserve estimates and, since reserving methods with more credibility are given greater weight, the selected best estimate may differ from the mid-point of the various estimates produced by the actuarial methods used.

Cumulative number of reported claims

For most property and casualty lines, claim counts represent the number of claim features on a reported claim where a claim feature is each separate coverage for each claimant affected by the claim event. For example, one car accident that results in two bodily injury claims and one automobile damage liability claim would be counted as three claims within the personal automobile liability triangle. Similarly, a fire that impacts one commercial building may result in multiple claim features due to the potential for claims related to business interruption, structural damage, and loss of the physical contents of the building. Claim features that result in no paid losses are included in the reported claim counts. For some property and casualty lines, such as marine and assumed reinsurance, a claim count represents each reported claim regardless of the number of features. For assumed bordereau business and business written on binders, one claim count is posted for each bordereau received, which could account for multiple claims.


Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [1]
	(Unaudited)
Reserve Line	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year		10th Year
Workers' compensation	14.9	%	18.4	%	12.0	%	8.2	%	5.6	%	3.8	%	2.8	%	2.1	%	1.6	%	1.0	%
General liability	2.7	%	7.6	%	12.7	%	16.7	%	16.6	%	12.3	%	9.0	%	5.1	%	2.7	%	3.9	%
Marine	23.1	%	31.8	%	18.0	%	7.2	%	6.7	%	6.0	%	2.3	%	1.5	%	0.8	%	0.4	%
Package business	36.7	%	22.3	%	10.0	%	9.1	%	6.6	%	3.9	%	2.2	%	1.7	%	1.3	%	1.1	%
Commercial property	50.9	%	32.1	%	7.2	%	3.5	%	1.2	%	0.6	%	0.1	%	0.1	%	—	%	—	%
Commercial automobile liability	14.7	%	19.9	%	19.6	%	16.9	%	12.3	%	6.0	%	3.8	%	1.1	%	1.0	%	0.9	%
Commercial automobile physical damage	79.7	%	17.1	%	(0.2	%)
Professional liability	5.0	%	16.5	%	18.1	%	13.2	%	10.7	%	9.7	%	8.5	%	3.5	%	4.2	%	3.7	%
Bond	11.7	%	24.9	%	9.4	%	6.8	%	0.3	%	(0.4	%)	(0.5	%)	(5.5	%)	4.0	%	—	%
Assumed Reinsurance	30.4	%	35.4	%	10.8	%	5.5	%	4.6	%	1.8	%	1.3	%	1.1	%	0.5	%	0.3	%
Personal automobile liability	33.2	%	34.2	%	16.4	%	8.0	%	3.5	%	1.4	%	0.5	%	0.3	%	0.2	%	0.1	%
Personal automobile physical damage	91.3	%	6.5	%	0.1	%
Homeowners	68.7	%	25.7	%	1.8	%	0.5	%	0.7	%	0.1	%	0.1	%	—	%	—	%	—	%

[1]Negative percentages are generally due to salvage, subrogation or other recoveries.

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the years ended December 31,
	2023		2022		2021
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,160	$	8,210	$	8,233
Reinsurance recoverables	245		245		237
Beginning liabilities for unpaid losses and loss adjustment expenses, net	7,915		7,965		7,996
Provision for unpaid losses and loss adjustment expenses
Current incurral year	5,145		4,853		5,021
Prior year's discount accretion	193		202		201
Prior incurral year development [1]	(502)		(381)		(458)
Total provision for unpaid losses and loss adjustment expenses [2]	4,836		4,674		4,764
Payments
Current incurral year	(2,575)		(2,456)		(2,631)
Prior incurral years	(2,156)		(2,268)		(2,164)
Total payments	(4,731)		(4,724)		(4,795)
Ending liabilities for unpaid losses and loss adjustment expenses, net	8,020		7,915		7,965
Reinsurance recoverables	254		245		245
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,274	$	8,160	$	8,210

[1]Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.

[2]Includes unallocated loss adjustment expenses of $182, $185 and $179 for the years ended December 31, 2023, 2022 and 2021, respectively, that are recorded in insurance operating costs and other expenses in the Consolidated Statements of Operations.

Group Life, Disability and Accident Products Reserves, Net of Reinsurance, that are Discounted


	For the years ended December 31,
	2023						2022						2021
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	8,150					$	8,124					$	8,176
Amount of discount	(1,166)						(1,205)						(1,304)
Carrying value of liability for unpaid losses and loss adjustment expenses	$	6,984					$	6,919					$	6,872
Weighted average discount rate	3.2					%	3.2					%	3.3					%
Range of discount rate	2.1		%	-	8.0	%	2.1		%	-	8.0	%	2.1		%	-	8.0	%

Reserves are discounted at rates in effect at the time claims were incurred, ranging from 2.1% for life and disability reserves acquired from Aetna based on interest rates in effect at the acquisition date of November 1, 2017, to 8.0% for the Company’s pre-acquisition reserves for incurral year 1990, and vary by product. Prior year's discount accretion has been calculated as the average reserve balance for the year times the weighted average discount rate.

2023 re-estimates of prior incurral year reserves

Group disability- Prior period reserve estimates decreased by approximately $457 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $36 largely driven by continued low incidence in group life premium waiver.

Supplemental Accident & Health- Prior period reserve estimates decreased by approximately $9 driven by lower than previously expected claim incidence.

2022 re-estimates of prior incurral year reserves

Group disability- Prior period reserve estimates decreased by approximately $325 largely driven by group long-term disability claim incidence lower than prior assumptions, strong recoveries on prior incurral year claims and higher estimated claim termination rates.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $50 largely driven by continued low incidence in group life premium waiver as well as a reduction in the estimation of high level of mortality losses incurred in fourth quarter 2021.

Supplemental Accident & Health- Prior period reserve estimates decreased by approximately $6 driven by lower-than-previously expected claim incidence.

2021 re-estimates of prior incurral year reserves

Group disability- Prior period reserve estimates decreased by approximately $380 largely driven by group long-term disability claim incidence lower than prior assumptions together with strong recoveries on prior incurral year claims, and by a New York Paid Family Leave risk adjustment benefit.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $65 largely driven by lower-than-previously expected claim incidence in both group life premium waiver and group accidental loss of life and severe injury benefits.

Supplemental Accident & Health- Prior period reserve estimates decreased by approximately $10 driven by lower-than-expected emergence of prior year claims, especially for voluntary critical Illness and voluntary accident products.

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses as of December 31, 2023


	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance										Subtotal
Reserve Line	Cumulative Incurred for Incurral Years Displayed in Triangles		Cumulative Paid for Incurral Years Displayed in Triangles		Unpaid for Incurral Years not Displayed in Triangles		Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance		Discount		Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance		Reinsurance and Other Recoverables		Liability for Unpaid Losses and Loss Adjustment Expenses
Group long-term disability	$	14,262	$	(8,187)	$	1,434	$	200	$	(1,089)	$	6,620	$	243	$	6,863
Group life and accident, excluding premium waiver	6,525		(5,934)		157		5		(14)		739		5		744
Group short-term disability					148		9		—		157		—		157
Group life premium waiver					523		10		(63)		470		2		472
Group supplemental health					34		—		—		34		4		38
Total Group Benefits	$	20,787	$	(14,121)	$	2,296	$	224	$	(1,166)	$	8,020	$	254	$	8,274

The following loss triangles present historical loss development for incurred and paid claims by the year the insured claim occurred, referred to as the incurral year. Triangles are limited to the number of years for which claims incurred typically remain outstanding, not exceeding ten years. Short-tail lines, which represent claims generally expected to be paid within a few years, have three years of claim development displayed.

Changes in reserve development evident in the incurred loss triangles differ from prior accident year development recorded by the Company as shown in the reserve rollforward above as the triangles are presented on an undiscounted basis and exclude ULAE.

Group Long-Term Disability


Undiscounted Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the years ended December 31,
			(Unaudited)
Incurral Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		IBNR Reserves		Claims Reported
2014	$	1,636	$	1,473	$	1,430	$	1,431	$	1,431	$	1,408	$	1,395	$	1,389	$	1,382	$	1,382	$	—	31,783
2015			1,595		1,442		1,422		1,420		1,401		1,385		1,380		1,380		1,380		—		32,750
2016					1,651		1,481		1,468		1,437		1,417		1,409		1,401		1,400		—		33,296
2017							1,597		1,413		1,358		1,316		1,304		1,296		1,289		—		30,923
2018									1,647		1,387		1,309		1,277		1,276		1,271		—		28,426
2019											1,650		1,424		1,327		1,284		1,287		1		27,458
2020													1,686		1,407		1,323		1,282		1		25,848
2021															1,768		1,521		1,417		5		27,071
2022																	1,842		1,566		35		25,580
2023																			1,988		1,009		17,404
Total																			$	14,262


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the years ended December 31,
			(Unaudited)
Incurral Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	103	$	448	$	675	$	801	$	884	$	960	$	1,025	$	1,079	$	1,122	$	1,164
2015			108		460		687		806		891		962		1,025		1,078		1,125
2016					112		479		705		819		907		981		1,043		1,100
2017							109		452		658		757		842		911		970
2018									105		447		639		743		827		897
2019											101		454		650		751		832
2020													100		458		663		767
2021															101		493		720
2022																	101		496
2023																			116
Total																			$	8,187

Group Life and Accident, excluding Premium Waiver


Undiscounted Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Incurral Year	2021		2022		2023		IBNR Reserves		Claims Reported
2021	$	2,384	$	2,365	$	2,364	$	14	69,915
2022			2,061		2,053		26		71,604
2023					2,108		407		57,414
Total					$	6,525


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Incurral Year	2021		2022		2023
2021	$	1,764	$	2,320	$	2,344
2022			1,562		2,018
2023					1,572
Total					$	5,934

Group life, disability and accident reserves, including IBNR

The majority of Group Benefits’ reserves are for LTD claimants who are known to be disabled and are currently receiving benefits. A Disabled Life Reserve ("DLR") is calculated for each LTD claim. The DLR for each claim is the expected present value of all estimated future benefit payments and includes estimates of claim recovery, investment yield, and offsets from other income, including offsets from Social Security benefits and workers’ compensation. Estimated future benefit payments represent the monthly income benefit that is paid until recovery, death or expiration of benefits. Claim recoveries are estimated based on claim characteristics such as age and diagnosis and represent an estimate of benefits that will terminate, generally as a result of the claimant returning to work or being deemed able to return to work. The DLR also includes a liability for payments to claimants who have not yet been approved for LTD. In these cases, the present value of future benefits is reduced for the likelihood of claim denial based on Company experience. For claims recently closed due to recovery, a portion of the DLR is retained for the possibility that the claim reopens upon further evidence of disability. In addition, a reserve for estimated unpaid claim expenses is included in the DLR.

For incurral years with IBNR claims, estimates of ultimate losses are made by applying completion factors to the dollar amount of claims reported or expected depending on the market segment. IBNR represents estimated ultimate losses less both DLR and cumulative paid amounts for all reported claims. Completion factors are derived using standard actuarial techniques using triangles that display historical claim count emergence by incurral month. These estimates are reviewed for reasonableness and are adjusted for current trends and other factors expected to cause a change in claim emergence. The IBNR includes an estimate of unpaid claim expenses, including a provision for the cost of initial set-up of the claim once reported.

For all products, including LTD, there is a period generally ranging from two to twelve months, depending on the product and market segment, where emerged claim information for an incurral year is not yet credible enough to be a basis for an IBNR projection. In these cases, the ultimate losses and allocated loss adjustment expenses are estimated using earned premium multiplied by an expected loss ratio.

The Company also records reserves for future death benefits under group term life policies that provide for premiums to be waived in the event the insured is unable to work due to disability and has satisfied an elimination period, which is typically nine months (premium waiver reserves). The death benefit reserve for these group life premium waiver claims is estimated for a known disabled claimant equal to the present value of expected future cash outflows (typically a lump sum face amount payable at death plus claim expenses) with separate estimates for claimant recovery (when no death benefit is payable) and for death before recovery or benefit expiry (when death benefit is payable). The IBNR for premium waiver death benefits is estimated with standard actuarial development methods.

In addition, the Company also records reserves for group term life, accidental loss of life and severe injury, short-term disability, and other group products that have short claim payout periods. For these products, reserves are determined using paid or reported actuarial development methods. The resulting claim triangles produce a completion pattern and estimate of ultimate loss. IBNR for these lines of business equals the estimated ultimate losses and loss adjustment expenses less the amount of paid or reported claims depending on whether the paid or reported development method was used. Estimates are reviewed for reasonableness and are adjusted for current trends or other factors that affect the development pattern.

Cumulative number of reported claims

For group life, disability and accident coverages, claim counts include claims that are approved, pending approval and terminated and exclude denied claims. Due to the nature of the claims, one claimant represents one event.


Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	(Unaudited)
	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year		10th Year
Group long-term disability	7.5	%	26.5	%	15.9	%	8.2	%	6.3	%	5.4	%	4.6	%	3.9	%	3.3	%	3.0	%
Group life and accident, excluding premium waiver	75.1	%	22.8	%	1.0	%

12. RESERVE FOR FUTURE POLICY BENEFITS


Rollforward of Reserve for Future Policy Benefits
	For the year ended December 31,
	2023						2022						2021
	Payout Annuities		Life Conversions		Paid-up Life		Payout Annuities		Life Conversions		Paid-up Life		Payout Annuities		Life Conversions		Paid-up Life
Present Value of Expected Net Premiums
Balance, beginning of the period			$	47					$	58					$	52
Balance, ending of the period			$	49					$	47					$	58

Present Value of Expected Future Policy Benefits
Beginning balance at single-A rate	$	140	$	112	$	192	$	188	$	152	$	262	$	206	$	167	$	293
Beginning adjustment for changes in single-A rate	4		(14)		(39)		47		19		14		59		26		29
Beginning balance at original discount rate	136		126		231		141		133		248		147		141		264
Effect of changes in cash flow assumptions	(2)		—		—		—		—		—		—		—		—
Effect of actual variances from expected experience	1		7		(1)		—		5		—		—		11		(1)
Adjusted beginning balance	135		133		230		141		138		248		147		152		263
Interest accrual and other	7		20		8		8		17		7		7		19		7
Benefit Payments	(12)		(29)		(21)		(13)		(29)		(24)		(13)		(38)		(22)
Ending balance at original discount rate	130		124		217		136		126		231		141		133		248
Ending adjustment for changes in single-A rate	7		(11)		(32)		4		(14)		(39)		47		19		14
Ending balance at single-A rate	$	137	$	113	$	185	$	140	$	112	$	192	$	188	$	152	$	262

Net reserve for future policy benefits	$	137	$	64	$	185	$	140	$	65	$	192	$	188	$	94	$	262
Weighted-average duration of the reserve for future policy benefits (years)	9.0		12.2		6.4		9.2		11.4		6.4		9.2		15.5		8.2


Net Reserve for Future Policy Benefits
	As of December 31,
	2023		2022		2021
Payout Annuities	$	137	$	140	$	188
Life Conversions	64		65		94
Paid-up Life	185		192		262
Deferred Profit Liability	20		19		20
Other	78		86		82
Total	$	484	$	502	$	646


Undiscounted Expected Future Gross Premiums and Benefit Payments
	As of December 31,
	2023		2022		2021
Payout Annuities [1]
Expected future benefit payments	$	257	$	272	$	283
Life Conversions
Expected future gross premiums	$	114	$	120	$	131
Expected future benefit payments	$	204	$	212	$	225
Paid-up Life [1]
Expected future benefit payments	$	281	$	300	$	324

[1]Payout Annuities and Paid-up Life have no expected future gross premiums.


Weighted-Average Interest Rates
	For the year ended December 31,
	2023		2022		2021
Payout Annuities
Interest accretion rate	5.6	%	5.6	%	5.6	%
Current discount rate	5.0	%	5.3	%	2.8	%
Life Conversions
Interest accretion rate	4.2	%	4.1	%	4.1	%
Current discount rate	5.1	%	5.3	%	2.9	%
Paid-up Life
Interest accretion rate	2.9	%	2.9	%	2.9	%
Current discount rate	5.0	%	5.2	%	2.1	%

The Company completed a review of cash flow assumptions in the third quarter 2023, resulting in immaterial changes to the reserve for future policy benefits. For payout annuities, the net effect of updating cash flow assumptions was partially offset by a corresponding impact to the deferred profit liability. Gross premiums and interest accretion recognized on long-duration insurance policies for the years ended December 31, 2023, 2022 and 2021 were immaterial.