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Reserve for Unpaid Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2024

Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract]

Reserve for Unpaid Losses and Loss Adjustment Expenses

|PROPERTY & CASUALTY INSURANCE PRODUCT RESERVES, NET OF REINSURANCE

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the years ended December 31,
	2024		2023		2022
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	34,044	$	33,083	$	31,449
Reinsurance and other recoverables	6,696		6,465		6,081
Beginning liabilities for unpaid losses and loss adjustment expenses, net	27,348		26,618		25,368
Provision for unpaid losses and loss adjustment expenses
Current accident year	10,305		9,538		8,577
Prior accident year development [1]	(120)		10		36
Total provision for unpaid losses and loss adjustment expenses	10,185		9,548		8,613
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	83		(194)		(229)
Payments
Current accident year	(2,765)		(2,716)		(2,424)
Prior accident years	(5,175)		(5,926)		(4,678)
Total payments	(7,940)		(8,642)		(7,102)

Foreign currency adjustment	(25)		18		(32)
Ending liabilities for unpaid losses and loss adjustment expenses, net	29,651		27,348		26,618
Reinsurance and other recoverables	6,753		6,696		6,465
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	36,404	$	34,044	$	33,083

[1] Prior accident year development for the year ended December 31, 2024 includes a $145 benefit for amortization of a deferred gain under retroactive reinsurance accounting related to the Navigator's ADC as the Company began collecting recoveries of the ceded losses from National Indemnity Company ("NICO"), a subsidiary of Berkshire Hathaway Inc, during the period. Prior accident year development does not include the benefit of a portion of losses ceded under the A&E ADC, which, under retroactive reinsurance accounting, is deferred and is recognized over the period the ceded losses are recovered in cash from NICO. 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,
	2024						2023						2022
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	1,184					$	1,255					$	1,343
Amount of discount	333						339						347
Carrying value of liability for unpaid losses and loss adjustment expenses	$	851					$	916					$	996
Discount accretion included in losses and loss adjustment expenses	$	44					$	42					$	36
Weighted average discount rate	2.80					%	2.74					%	2.71					%
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, 2024 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,
	2024		2023		2022
Workers’ compensation	$	(258)	$	(236)	$	(204)
Workers’ compensation discount accretion	44		42		36
General liability	211		41		56
Marine	(1)		(2)		2
Package business	(6)		(24)		(39)
Commercial property	(7)		(7)		(11)
Professional liability	(27)		(2)		(11)
Bond	(56)		(27)		(32)
Assumed reinsurance	24		34		19
Commercial automobile liability	47		20		38
Personal automobile liability	(30)		—		(14)
Homeowners	(28)		(6)		(1)


Net asbestos and environmental reserves	141		—		—
Catastrophes	(87)		(87)		(62)
Uncollectible reinsurance	(19)		13		3
Other reserve re-estimates, net	15		57		27
Prior accident year development, including full benefit for the ADC cession	(37)		(184)		(193)
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	(83)		194		229
Total prior accident year development	$	(120)	$	10	$	36

[1] The change in deferred gain on retroactive reinsurance for the year ended December 31, 2024, included a benefit for amortization of the Navigators ADC deferred gain of $145. The change in deferred gain for the years ended December 31, 2024, 2023 and 2022 also included $62, $194 and $229, respectively of adverse development on A&E reserves in excess of ceded premium paid.

2024 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased within the 2016 to 2020 accident years primarily in small business (formerly "small commercial"), driven by lower than anticipated claim severity. In addition, the 2020 accident year includes a $48 reduction of COVID-19 related reserves driven by favorable claim count emergence.

General liability reserves were increased primarily in response to a higher frequency of large losses in the 2015 to 2019 accident years. In addition, the incurred but not reported reserves for more recent accident years were increased as management has observed an increase in severity on reported claims above expectations and anticipates a higher claim severity trend on unreported claims. Reserves for sexual molestation and sexual abuse claims were increased for older accident years. Lastly, reserves for extra contractual liability claims and other miscellaneous run-off lines were reduced in response to recent favorable loss activity.

Professional liability reserves decreased due to favorable development on directors and officers ("D&O") claims driven by the 2020 to 2022 accident years combined with favorable errors and omissions experience in the 2018 accident year, partially offset by deterioration in older accident years.

Bond reserves decreased due to favorable development on commercial and contract surety and fidelity bonds, driven by accident years 2019 and prior.

Assumed reinsurance reserves were increased due to higher reserve estimates in the Latin America surety and Latin America P&C businesses related to the 2020 to 2023 accident years.

Commercial automobile liability reserves increased primarily due to adverse loss development within accident years 2022 and 2023, driven by higher severity than estimated.

Personal automobile liability reserves were decreased primarily in response to better than anticipated accident years 2021 to 2023 severity for bodily injury liability claims and property damage liability.

Homeowners reserves were decreased primarily due to favorable severity impacting accident years 2022 and 2023.

Asbestos and environmental reserves were reviewed in fourth quarter 2024 resulting in a $203 increase in reserves before ADC reinsurance, including $167 for asbestos and $36 for environmental. The Company ceded to the A&E ADC $62, which is accounted for as a 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 14 - Commitments and Contingencies.

Catastrophes reserves were decreased primarily within Business Insurance driven by a reduction in reserves in accident years 2020 to 2022 related to favorable emergence related to various hail events, as well as favorable development in both

Business Insurance and Personal Insurance in accident year 2022 related to Hurricane Ian.

Uncollectible reinsurance was decreased due to a reduction in a previously established reserve for an A&E reinsurer that entered into liquidation proceedings.

Other reserve re-estimates, net, were increased primarily due to an increase in unallocated loss adjustment expenses ("ULAE") reserves within P&C Other Operations driven by an increase in gross asbestos and environmental reserves and an increase in reserves related to unfavorable development from participation in involuntary market pools environmental reserves, partially offset by a decrease in reserves due to lower severity than expected on personal automobile physical damage for accident year 2023.

2023 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased within the 2014 to 2020 accident years primarily in small business, 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 business (formerly "middle & large commercial") was offset by favorable development in global specialty.

Professional liability reserves decreased modestly due to favorable development on directors and officers 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.

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

Personal automobile liability reserves 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.

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 14 - Commitments and Contingencies.

Catastrophes reserves were decreased primarily within Business Insurance 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 Business Insurance 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 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.

2022 re-estimates of prior accident year reserves

Workers’ compensation reserves were decreased for the 2014 through 2018 accident years, predominately within small business, and to a lesser extent in middle & large business, 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 business 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 business 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 Insurance principally due to lower estimated severity on AARP Direct claims, primarily within accident years 2015 to 2020 and were increased in Business Insurance 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.

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 14 - Commitments and Contingencies.

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

Settlement Agreement with Boy Scouts of America

On February 14, 2022, the Company executed a final settlement agreement (the “Settlement”) with the Boy Scouts of America ("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 Business Insurance and Personal Insurance. 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 covered 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, 2024, the Company has incurred $1.5 billion in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO with no available limit remaining. As such, no remaining coverage is available for any future adverse net reserve development, which may be significant. The Company has recorded a $850 deferred gain within other liabilities, representing the difference between the reinsurance recoverable of $1.5 billion and ceded premium paid of $650. Recoveries from NICO will be collected once the Company has paid cumulative losses in excess of the $1.7 billion attachment point. The deferred gain will be 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.

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, 2024, the Company has recorded a reinsurance recoverable under the Navigators ADC of $91 as estimated cumulative loss development on the 2018 and prior accident year reserves has exhausted the treaty limit. While the reinsurance recoverable is $91, the Company previously

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. During 2024, the Company collected recoveries from NICO under the Navigators ADC and as a result amortized $145 of the $209 deferred gain within benefits, losses and loss adjustment expenses in the Consolidated Statements of Operations. As there were no collected recoveries during the years ended December 31, 2023, and December 31, 2022, there were no changes to the deferred gain in those years. As of December 31, 2024, and December 31, 2023, the deferred gain on the Navigators ADC was $64 and $209, respectively, and is included in other liabilities on the Consolidated Balance Sheets.

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses As of December 31, 2024


	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	$	18,389	$	(9,665)	$	3,836	$	419	$	(319)		$	12,660	$	1,721	$	14,381
General liability	9,416		(4,177)		494		202		—			5,935		1,230		7,165
Marine	1,427		(1,114)		15		15		—			343		244		587
Package business	8,630		(6,279)		109		130		—			2,590		31		2,621
Commercial property	4,244		(3,676)		13		31		—			612		299		911
Commercial automobile liability	4,606		(3,106)		16		38		—			1,554		113		1,667
Commercial automobile physical damage	239		(213)		4		1		—			31		—		31
Professional liability	3,042		(1,567)		55		47		—			1,577		611		2,188
Bond	667		(276)		19		33		—			443		14		457
Assumed Reinsurance	2,107		(1,356)		—		7		—			758		30		788
Personal automobile liability	10,862		(9,240)		31		74		—			1,727		18		1,745
Personal automobile physical damage	1,640		(1,574)		7		5		—			78		—		78
Homeowners	5,876		(5,521)		6		42		—			403		5		408
Other ongoing business					168		7		(14)			161		356		517
Asbestos and environmental [1]					315		—		—			315		2,038		2,353
Other operations [1]					293		171		—			464		43		507
Total P&C	$	71,145	$	(47,764)	$	5,381	$	1,222	$	(333)		$	29,651	$	6,753	$	36,404

[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 $64 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, 2024.

Workers' Compensation


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	1,873	$	1,835	$	1,801	$	1,724	$	1,714	$	1,699	$	1,667	$	1,645	$	1,625	$	1,625	$	329	114,700
2016			1,772		1,772		1,780		1,767		1,748		1,708		1,670		1,634		1,621		331		112,747
2017					1,862		1,869		1,840		1,822		1,757		1,665		1,635		1,597		392		112,274
2018							1,916		1,917		1,915		1,904		1,870		1,836		1,798		464		120,076
2019									1,937		1,935		1,934		1,934		1,899		1,864		528		121,158
2020											1,865		1,864		1,849		1,808		1,712		601		92,347
2021													1,831		1,832		1,831		1,831		675		103,229
2022															2,000		2,001		2,001		819		114,189
2023																	2,166		2,166		1,171		117,297
2024																			2,174		1,536		109,521
Total																			$	18,389


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	261	$	576	$	778	$	909	$	1,004	$	1,068	$	1,117	$	1,151	$	1,179	$	1,200
2016			255		579		779		908		1,003		1,064		1,110		1,145		1,173
2017					261		575		778		900		977		1,035		1,087		1,118
2018							283		624		837		983		1,090		1,170		1,215
2019									291		637		856		1,007		1,129		1,204
2020											223		507		695		850		939
2021													254		562		780		920
2022															293		649		910
2023																	286		677
2024																			309
Total																			$	9,665

General Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	556	$	560	$	554	$	594	$	633	$	647	$	637	$	647	$	641	$	656	$	60	16,903
2016			613		583		607		632		632		620		636		670		692		68		17,989
2017					626		614		613		615		613		615		657		690		82		17,581
2018							692		669		697		703		728		751		816		167		19,019
2019									822		826		821		839		859		876		190		18,871
2020											938		922		922		873		857		363		14,574
2021													1,002		991		983		1,000		493		12,839
2022															1,116		1,110		1,167		746		12,673
2023																	1,219		1,230		989		10,854
2024																			1,432		1,366		7,290
Total																			$	9,416


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	10	$	55	$	156	$	278	$	409	$	477	$	524	$	547	$	564	$	569
2016			12		52		131		283		368		446		513		564		596
2017					15		67		156		255		344		441		506		553
2018							21		83		177		288		409		512		595
2019									29		100		192		339		501		613
2020											45		110		202		308		432
2021													34		115		209		394
2022															26		134		281
2023																	17		128
2024																			16
Total																			$	4,177

Marine


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves [1]		Claims Reported
2015	$	158	$	146	$	146	$	148	$	133	$	138	$	139	$	142	$	140	$	139	$	1	10,559
2016			139		142		137		147		149		146		148		158		157		—		13,811
2017					153		173		160		159		165		167		174		172		—		16,235
2018							131		146		141		146		152		156		155		(5)		10,812
2019									139		135		134		129		127		127		(3)		7,261
2020											145		137		134		137		142		7		5,261
2021													127		127		119		127		15		5,357
2022															140		132		130		22		5,306
2023																	134		129		39		4,674
2024																			149		83		3,735
Total																			$	1,427

[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.


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	40	$	85	$	116	$	125	$	133	$	139	$	140	$	142	$	142	$	141
2016			35		80		105		122		131		140		143		146		141
2017					47		106		133		143		150		161		170		167
2018							33		94		126		135		142		159		151
2019									34		80		96		105		115		120
2020											31		68		90		99		114
2021													25		63		87		101
2022															27		72		89
2023																	22		58
2024																			32
Total																			$	1,114

Package Business


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	582	$	588	$	585	$	583	$	588	$	581	$	567	$	564	$	564	$	570	$	17	42,479
2016			655		638		632		625		611		595		591		590		582		24		44,381
2017					695		702		692		657		644		637		640		638		33		46,958
2018							719		724		688		667		655		654		671		46		45,361
2019									813		769		749		744		747		761		72		43,955
2020											915		893		877		837		828		101		62,964
2021													946		954		958		958		150		47,755
2022															1,038		1,039		1,043		215		47,134
2023																	1,250		1,223		378		46,364
2024																			1,356		750		42,172
Total																			$	8,630


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	212	$	332	$	383	$	445	$	486	$	505	$	513	$	530	$	542	$	549
2016			225		353		410		465		500		521		540		545		549
2017					235		372		447		496		534		561		578		593
2018							237		402		451		498		537		571		609
2019									254		413		488		571		626		666
2020											326		493		573		648		699
2021													368		556		650		746
2022															319		633		728
2023																	453		725
2024																			415
Total																			$	6,279

Commercial Property


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	298	$	301	$	302	$	301	$	305	$	304	$	301	$	301	$	301	$	299	$	—	20,977
2016			405		419		399		406		408		408		405		405		405		—		23,927
2017					577		516		456		438		440		438		439		438		2		24,627
2018							450		436		423		403		400		393		393		2		21,821
2019									480		439		418		420		421		420		(1)		20,981
2020											501		469		440		438		437		49		20,529
2021													531		500		463		434		15		18,283
2022															497		481		475		48		17,446
2023																	448		424		86		17,003
2024																			519		164		15,209
Total																			$	4,244


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	179	$	257	$	284	$	296	$	301	$	303	$	302	$	302	$	301	$	300
2016			215		342		378		395		401		406		406		407		406
2017					229		378		411		427		432		438		440		441
2018							188		344		378		385		394		394		394
2019									215		351		383		405		407		410
2020											221		336		355		367		373
2021													241		383		403		412
2022															180		369		412
2023																	199		300
2024																			228
Total																			$	3,676

Commercial Automobile Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	308	$	358	$	372	$	356	$	356	$	359	$	360	$	358	$	360	$	358	$	5	28,750
2016			385		393		390		391		391		395		395		396		395		5		29,266
2017					372		383		379		383		381		394		398		398		2		26,420
2018							349		396		405		406		424		433		435		18		24,816
2019									425		439		450		460		471		479		20		28,627
2020											428		424		419		397		388		44		22,272
2021													440		443		429		410		86		20,222
2022															468		500		547		158		20,891
2023																	527		555		279		20,649
2024																			641		501		19,954
Total																			$	4,606


Cumulative Paid Losses & Allocated Loss Adjustment Expense, Net of Reinsurance
	For the years ended December 31
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	62	$	142	$	207	$	267	$	314	$	335	$	344	$	348	$	350	$	351
2016			65		147		232		303		339		357		379		385		388
2017					60		134		211		285		328		368		386		389
2018							62		153		238		305		360		387		406
2019									67		160		247		327		393		428
2020											55		119		200		264		317
2021													55		127		212		282
2022															64		171		294
2023																	69		174
2024																			77
Total																			$	3,106

Commercial Automobile Physical Damage


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2022		2023		2024		IBNR Reserves		Claims Reported







2022	$	70	$	74	$	74	$	2	16,771
2023			80		81		6		16,832
2024					84		8		15,533
Total					$	239


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2022		2023		2024







2022	$	59	$	73	$	72
2023			61		74
2024					67
Total					$	213

Professional Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	164	$	174	$	179	$	190	$	213	$	206	$	198	$	196	$	197	$	192	$	1	7,279
2016			183		176		203		196		194		195		193		191		202		20		8,462
2017					205		203		231		225		239		242		217		227		14		9,555
2018							243		274		270		271		265		324		312		18		9,910
2019									295		313		330		347		354		385		81		9,972
2020											369		363		336		324		298		106		8,034
2021													339		343		327		306		149		6,761
2022															349		355		338		214		7,177
2023																	384		388		260		8,049
2024																			394		337		7,546
Total																			$	3,042


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	9	$	40	$	85	$	107	$	124	$	140	$	163	$	175	$	185	$	181
2016			8		51		88		111		124		147		166		176		175
2017					11		48		87		121		149		179		190		189
2018							15		71		127		161		194		232		260
2019									21		77		147		197		241		265
2020											19		71		117		147		171
2021													15		55		95		127
2022															18		64		95
2023																	20		76
2024																			28
Total																			$	1,567

Bond


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	67	$	67	$	63	$	60	$	54	$	48	$	47	$	42	$	37	$	29	$	4	1,413
2016			61		61		61		55		51		45		37		34		28		8		1,348
2017					63		90		101		94		79		70		68		65		22		1,799
2018							68		68		72		71		70		63		54		24		1,750
2019									72		73		74		73		70		61		44		1,925
2020											83		84		79		83		80		51		2,294
2021													85		85		88		84		55		2,989
2022															85		93		93		29		2,571
2023																	81		83		63		1,647
2024																			90		78		975
Total																			$	667


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	9	$	20	$	24	$	31	$	34	$	32	$	30	$	25	$	25	$	25
2016			2		12		15		20		22		22		22		20		20
2017					5		46		55		54		42		43		43		43
2018							6		16		23		24		29		30		29
2019									3		13		15		16		16		17
2020											4		12		21		26		27
2021													8		21		23		29
2022															11		42		59
2023																	8		17
2024																			10
Total																			$	276

Assumed Reinsurance


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves [1]		Claims Reported
2015	$	102	$	92	$	94	$	94	$	95	$	96	$	96	$	96	$	96	$	96	$	—	1,737
2016			88		91		98		100		102		101		102		104		104		(1)		1,996
2017					129		153		161		157		153		155		155		155		—		2,596
2018							128		127		129		134		135		132		132		(6)		3,078
2019									181		189		186		190		208		208		11		3,843
2020											183		180		186		178		181		11		3,374
2021													191		195		203		204		22		2,698
2022															266		274		290		84		2,501
2023																	329		327		112		2,354
2024																			410		297		1,049
Total																			$	2,107

[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.


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	42	$	64	$	77	$	83	$	91	$	94	$	95	$	95	$	96	$	96
2016			36		66		84		90		95		97		99		101		101
2017					44		116		135		145		147		149		151		150
2018							25		111		133		139		141		144		133
2019									62		132		153		159		176		185
2020											49		89		113		132		151
2021													46		102		132		157
2022															60		128		173
2023																	63		149
2024																			61
Total																			$	1,356

Personal Automobile Liability


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	1,195	$	1,340	$	1,338	$	1,330	$	1,331	$	1,328	$	1,324	$	1,320	$	1,319	$	1,319	$	2	216,911
2016			1,407		1,402		1,393		1,397		1,395		1,386		1,384		1,384		1,388		6		215,877
2017					1,277		1,275		1,228		1,214		1,200		1,198		1,197		1,198		6		187,564
2018							1,108		1,104		1,072		1,058		1,056		1,055		1,054		18		156,295
2019									1,018		1,010		991		986		971		967		10		139,762
2020											805		782		775		741		740		23		96,731
2021													881		886		852		846		57		102,129
2022															928		1,018		1,009		132		107,911
2023																	1,138		1,129		270		107,253
2024																			1,212		622		94,233
Total																			$	10,862


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	475	$	935	$	1,142	$	1,243	$	1,292	$	1,304	$	1,310	$	1,313	$	1,314	$	1,315
2016			505		968		1,188		1,308		1,345		1,363		1,373		1,377		1,380
2017					441		836		1,033		1,123		1,161		1,180		1,187		1,189
2018							359		710		888		965		1,011		1,028		1,033
2019									323		654		816		897		933		949
2020											238		486		615		679		709
2021													247		553		691		760
2022															301		662		813
2023																	329		731
2024																			361
Total																			$	9,240

Personal Automobile Physical Damage


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2022		2023		2024		IBNR Reserves		Claims Reported







2022	$	533	$	549	$	539	$	3	239,634
2023			574		544		3		234,247
2024					557		28		199,915
Total					$	1,640


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2022		2023		2024







2022	$	498	$	538	$	536
2023			513		541
2024					497
Total					$	1,574

Homeowners


Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	690	$	703	$	690	$	684	$	684	$	684	$	684	$	684	$	682	$	682	$	—	120,023
2016			669		673		663		658		658		658		658		658		658		—		119,818
2017					866		889		884		783		775		774		771		769		4		124,780
2018							903		910		673		642		639		645		642		8		102,924
2019									501		475		470		468		467		465		1		84,810
2020											525		512		513		505		499		5		88,546
2021													502		501		491		485		5		77,320
2022															499		507		498		9		64,118
2023																	584		573		28		68,405
2024																			605		158		58,223
Total																			$	5,876


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	487	$	645	$	665	$	674	$	680	$	681	$	681	$	682	$	682	$	682
2016			481		621		640		649		653		655		656		657		658
2017					538		747		795		757		761		762		761		763
2018							484		712		616		619		627		626		628
2019									318		425		445		458		460		463
2020											335		454		478		486		490
2021													305		440		464		473
2022															298		453		476
2023																	390		521
2024																			367
Total																			$	5,521

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 reportable 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") gives weight to both the initial ELR multiplied by earned premium approach as well as a loss development approach, given early reported losses are more credible than in long-tailed lines. 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	14.8	%	18.4	%	12.1	%	8.1	%	5.7	%	4.0	%	2.9	%	2.1	%	1.7	%	1.3	%
General liability	2.5	%	7.8	%	11.8	%	16.6	%	15.5	%	12.3	%	9.1	%	5.9	%	3.7	%	0.6	%
Marine	22.8	%	32.0	%	16.8	%	7.5	%	6.7	%	6.2	%	0.8	%	0.4	%	(1.5	%)	(0.7	%)
Package business	35.8	%	22.4	%	9.6	%	9.3	%	6.4	%	4.3	%	3.3	%	2.1	%	1.4	%	1.2	%
Commercial property	49.9	%	31.9	%	7.5	%	3.3	%	1.5	%	0.8	%	—	%	0.2	%	(0.2	%)	(0.5	%)
Commercial automobile liability	14.1	%	19.4	%	20.1	%	17.0	%	12.2	%	6.8	%	4.2	%	1.2	%	0.7	%	—	%
Commercial automobile physical damage	78.2	%	17.3	%	(0.2	%)
Professional liability	5.3	%	16.1	%	16.5	%	11.8	%	9.6	%	10.3	%	8.9	%	3.4	%	2.4	%	(1.9	%)
Bond	11.1	%	26.4	%	11.0	%	8.6	%	1.2	%	(1.1	%)	(1.6	%)	(7.8	%)	(0.3	%)	(0.3	%)
Assumed Reinsurance	26.1	%	33.0	%	14.2	%	6.8	%	5.9	%	2.4	%	(1.0	%)	0.8	%	0.1	%	(0.4	%)
Personal automobile liability	32.7	%	34.4	%	16.3	%	8.0	%	3.6	%	1.4	%	0.6	%	0.2	%	0.2	%	0.1	%
Personal automobile physical damage	91.9	%	6.3	%	(0.4	%)
Homeowners	67.7	%	26.2	%	2.0	%	0.6	%	0.8	%	0.2	%	0.1	%	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,
	2024		2023		2022
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,274	$	8,160	$	8,210
Reinsurance recoverables	254		245		245
Beginning liabilities for unpaid losses and loss adjustment expenses, net	8,020		7,915		7,965
Provision for unpaid losses and loss adjustment expenses
Current incurral year	5,195		5,145		4,853
Prior year's discount accretion	194		193		202
Prior incurral year development [1]	(561)		(502)		(381)
Total provision for unpaid losses and loss adjustment expenses [2]	4,828		4,836		4,674
Payments
Current incurral year	(2,735)		(2,575)		(2,456)
Prior incurral years	(2,189)		(2,156)		(2,268)
Total payments	(4,924)		(4,731)		(4,724)
Ending liabilities for unpaid losses and loss adjustment expenses, net	7,924		8,020		7,915
Reinsurance recoverables	282		254		245
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,206	$	8,274	$	8,160

[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 $175, $182 and $185 for the years ended December 31, 2024, 2023 and 2022, 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,
	2024						2023						2022
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	8,111					$	8,150					$	8,124
Amount of discount	(1,196)						(1,166)						(1,205)
Carrying value of liability for unpaid losses and loss adjustment expenses	$	6,915					$	6,984					$	6,919
Weighted average discount rate	3.3					%	3.2					%	3.2					%
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 of discounted reserves for the year times the weighted average discount rate.

2024 re-estimates of prior incurral year reserves

Group disability- Prior period reserve estimates decreased by approximately $483 largely driven by long-term disability claim incidence lower than prior assumptions and favorable recoveries on prior incurral year claims, as well as a favorable change in the recovery rate assumption.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $80 largely driven by favorable mortality emergence and continued low incidence in group life premium waiver.

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.

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses as of December 31, 2024


	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	$	14,365	$	(8,243)	$	1,400	$	193	$	(1,121)	$	6,594	$	270	$	6,864
Group life and accident, excluding premium waiver	6,213		(5,669)		145		5		(12)		682		4		686
Group short-term disability					173		10		—		183		—		183
Group life premium waiver					485		9		(63)		431		3		434
Group supplemental health					34		—		—		34		5		39
Total Employee Benefits	$	20,578	$	(13,912)	$	2,237	$	217	$	(1,196)	$	7,924	$	282	$	8,206

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	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		IBNR Reserves		Claims Reported
2015	$	1,595	$	1,442	$	1,422	$	1,420	$	1,401	$	1,385	$	1,380	$	1,380	$	1,380	$	1,385	$	—	32,589
2016			1,651		1,481		1,468		1,437		1,417		1,409		1,401		1,400		1,407		—		33,307
2017					1,597		1,413		1,358		1,316		1,304		1,296		1,289		1,294		—		30,929
2018							1,647		1,387		1,309		1,277		1,276		1,271		1,279		—		28,428
2019									1,650		1,424		1,327		1,284		1,287		1,277		—		27,467
2020											1,686		1,407		1,323		1,282		1,260		—		25,862
2021													1,768		1,521		1,417		1,351		1		27,156
2022															1,842		1,566		1,452		6		25,952
2023																	1,988		1,700		44		28,026
2024																			1,960		970		18,035
Total																			$	14,365


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
			For the years ended December 31,
			(Unaudited)
Incurral Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	108	$	460	$	687	$	806	$	891	$	962	$	1,025	$	1,078	$	1,125	$	1,164
2016			112		479		705		819		907		981		1,043		1,100		1,144
2017					109		452		658		757		842		911		970		1,017
2018							105		447		639		743		827		897		954
2019									101		454		650		751		832		895
2020											100		458		663		767		839
2021													101		493		720		820
2022															101		496		719
2023																	116		562
2024																			129
Total																			$	8,243

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	2022		2023		2024		IBNR Reserves		Claims Reported
2022	$	2,061	$	2,053	$	2,056	$	12	72,225
2023			2,108		2,092		25		74,958
2024					2,065		380		59,084
Total					$	6,213


Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Incurral Year	2022		2023		2024
2022	$	1,562	$	2,018	$	2,040
2023			1,572		2,053
2024					1,576
Total					$	5,669

Group life, disability and accident reserves, including IBNR

The majority of Employee 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	7.6	%	27.0	%	15.9	%	8.0	%	6.3	%	5.2	%	4.5	%	3.8	%	3.3	%	2.8	%
Group life and accident, excluding premium waiver	75.8	%	22.6	%	1.1	%

11. RESERVE FOR FUTURE POLICY BENEFITS


Rollforward of Reserve for Future Policy Benefits
	For the year ended December 31,
	2024						2023						2022
	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			$	49					$	47					$	58
Balance, ending of the period			$	45					$	49					$	47

Present Value of Expected Future Policy Benefits
Beginning balance at single-A rate	$	137	$	113	$	185	$	140	$	112	$	192	$	188	$	152	$	262
Beginning adjustment for changes in single-A rate	7		(11)		(32)		4		(14)		(39)		47		19		14
Beginning balance at original discount rate	130		124		217		136		126		231		141		133		248
Effect of changes in cash flow assumptions	2		2		—		(2)		—		—		—		—		—
Effect of actual variances from expected experience	1		3		(1)		1		7		(1)		—		5		—
Adjusted beginning balance	133		129		216		135		133		230		141		138		248
Interest accrual and other	7		20		7		7		20		8		8		17		7
Benefit Payments	(12)		(28)		(22)		(12)		(29)		(21)		(13)		(29)		(24)
Ending balance at original discount rate	128		121		201		130		124		217		136		126		231
Ending adjustment for changes in single-A rate	—		(15)		(33)		7		(11)		(32)		4		(14)		(39)
Ending balance at single-A rate	$	128	$	106	$	168	$	137	$	113	$	185	$	140	$	112	$	192

Net reserve for future policy benefits	$	128	$	61	$	168	$	137	$	64	$	185	$	140	$	65	$	192
Weighted-average duration of the reserve for future policy benefits (years)	9.2		11.0		6.3		9.0		12.2		6.4		9.2		11.4		6.4


Net Reserve for Future Policy Benefits
	As of December 31,
	2024		2023		2022
Payout Annuities	$	128	$	137	$	140
Life Conversions	61		64		65
Paid-up Life	168		185		192
Deferred Profit Liability	17		20		19
Other	74		78		86
Total	$	448	$	484	$	502


Undiscounted Expected Future Gross Premiums and Benefit Payments
	As of December 31,
	2024		2023		2022
Payout Annuities [1]
Expected future benefit payments	$	256	$	257	$	272
Life Conversions
Expected future gross premiums	$	106	$	114	$	120
Expected future benefit payments	$	198	$	204	$	212
Paid-up Life [1]
Expected future benefit payments	$	260	$	281	$	300

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


Weighted-Average Interest Rates
	As of December 31,
	2024		2023		2022
Payout Annuities
Interest accretion rate	5.6	%	5.6	%	5.6	%
Current discount rate	5.5	%	5.0	%	5.3	%
Life Conversions
Interest accretion rate	4.3	%	4.2	%	4.1	%
Current discount rate	5.6	%	5.1	%	5.3	%
Paid-up Life
Interest accretion rate	2.9	%	2.9	%	2.9	%
Current discount rate	5.3	%	5.0	%	5.2	%

The Company completed a review of cash flow assumptions in the third quarter 2024 and 2023, resulting in immaterial changes to the reserve for future policy benefits. For payout annuities, the net effect of updating cash flow assumptions was 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, 2024, 2023 and 2022 were immaterial.