RESERVE FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

6 Months Ended

Jun. 30, 2023

RESERVE FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

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


	Six Months Ended June 30,
	2023		2022
(Dollars in millions)
Gross reserves beginning of period	$	22,065	$	19,009
Less reinsurance recoverables on unpaid losses	(2,105)		(1,946)
Net reserves beginning of period	19,960		17,063

Incurred related to:
Current year	3,927		3,668
Prior years	—		(2)
Total incurred losses and LAE	3,927		3,666

Paid related to:
Current year	1,307		979
Prior years	1,515		1,484
Total paid losses and LAE	2,822		2,462

Foreign exchange/translation adjustment	165		(259)

Net reserves end of period	21,229		18,007
Plus reinsurance recoverables on unpaid losses	2,175		1,986
Gross reserves end of period	$	23,405	$	19,993

(Some amounts may not reconcile due to rounding.)

Current year incurred losses were $3.9 billion and $3.7 billion for the six months ended June 30, 2023 and 2022, respectively. Gross and net reserves increased for the six months ended June 30, 2023, reflecting an increase in underlying exposure due to earned premium growth, year over year, and an increase of $317 million in 2023 current year attritional losses compared to 2022, partially offset by a decrease of $58 million in 2023 current year catastrophe losses. The Company has estimated and recognized $30 million of reinsurance recoveries related to Hurricane Ian.