The Company uses several actuarial methods to compute incurred-but-not reported liabilities. These methods use historical claim reporting patterns to develop a triangle of reported claim amounts. The claim triangle is then used to develop the ultimate claims amount and the incurred-but-not reported liabilities. Expected claim methods use exposure data such as premiums to develop the ultimate claim amount. The final method blends the estimates from the development and the expected claim methods. There were no significant changes in methodologies during 2023.

The following tables provide information on incurred and paid claims development, net of retrocession, for short-duration reinsurance contracts for the Company’s U.S. and Latin America and Asia Pacific Traditional segments, which primarily relate to group life and health (including disability) business. The short-duration business for the Company’s other segments is immaterial. Liabilities for claims and claims adjustment expenses, net of reinsurance, equals total incurred claims less cumulative paid claims plus outstanding liabilities prior to 2014.

The Company provides reinsurance on large quota share transactions. It is common industry practice for cedants to provide loss information on a bulk basis without comprehensive claim details. Additionally, a claim under aggregate stop loss coverage may be the result of thousands of claims, but the Company only pays the excess amount. Therefore, it is impractical to provide meaningful claim count detail by accident year in the tables shown below.


U.S. and Latin America																					As of
(dollars in millions)																					December 31, 2023
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)																					Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	For the Years Ended December 31,
	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	408	$	411	$	396	$	397	$	396	$	399	$	399	$	401	$	401	$	402	$	—
2015			460		461		465		462		462		463		463		464		464		—
2016					501		500		501		497		497		498		499		500		—
2017							485		514		509		504		503		504		503		—
2018									538		538		524		517		520		519		—
2019											491		473		456		453		453		2
2020													469		426		415		415		3
2021															509		492		493		4
2022																	519		480		33
2023																			543		240
																	Total		$	4,772


Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident Year	For the Years Ended December 31,
	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	129	$	305	$	337	$	349	$	356	$	364	$	368	$	374	$	378	$	382
2015			146		361		407		422		431		437		441		446		450
2016					185		393		437		451		460		467		472		477
2017							190		403		448		462		468		474		478
2018									183		415		465		479		489		494
2019											180		372		418		428		432
2020													159		356		388		394
2021															177		414		454
2022																	182		395
2023																			179
													Total						4,135
					All outstanding claims prior to 2014, net of reinsurance														110
			Liabilities for claims and claim adjustment expense, net of reinsurance																$	747


Asia Pacific																					As of
(dollars in millions)																					December 31, 2023
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)																					Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	For the Years Ended December 31,
	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	267	$	290	$	257	$	262	$	275	$	277	$	277	$	276	$	275	$	276	$	3
2015			269		249		242		258		258		258		258		258		259		4
2016					220		199		206		213		212		209		210		211		3
2017							205		207		207		210		198		196		198		2
2018									245		262		256		245		239		239		4
2019											245		253		260		251		253		8
2020													145		141		142		145		14
2021															67		61		61		7
2022																	93		96		21
2023																			131		76
																	Total		$	1,869


Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident Year	For the Years Ended December 31,
	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	33	$	131	$	171	$	199	$	221	$	234	$	244	$	251	$	255	$	259
2015			47		115		162		195		214		226		235		240		243
2016					37		94		129		148		161		172		180		187
2017							34		84		111		132		147		160		169
2018									31		103		142		171		191		206
2019											37		99		136		174		194
2020													22		53		80		95
2021															8		23		34
2022																	11		42
2023																			22
															Total				1,451
					All outstanding claims prior to 2014, net of reinsurance														91
					Liabilities for claims and claim adjustment expense, net of reinsurance														$	509


Average Annual Payout of Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
U.S. and Latin America	35.8	%	44.6	%	8.9	%	2.6	%	1.6	%	1.3	%	1.0	%	1.2	%	0.8	%	1.0	%
Asia Pacific	14.9	%	27.3	%	16.3	%	11.5	%	7.6	%	5.4	%	4.0	%	2.6	%	1.4	%	1.2	%

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claims Adjustment Expenses

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expense in the consolidated balance sheet as of December 31, 2023, is as follows (dollars in millions):


	2023
Liabilities for claims and claim adjustment expense, net of reinsurance:
U.S. and Latin America	$	747
Asia Pacific	509
Liabilities for claims and claim adjustment expense, net of reinsurance	1,256
Adjustments to reconcile to total policy claims:
Reinsurance recoverable	11
Effect of discounting	(103)
Unallocated claims adjustment expense	9
Total adjustments	(83)
Other short-duration contracts not included in the tables above:
U.S. and Latin America	221
Canada	378
Europe, Middle East and Africa	833
Asia Pacific	119
Corporate and Other	6
Total liability for unpaid claims and claim adjustment expense	$	2,730

The liability for unpaid claims is reported in other policy claims and benefits on the Company’s consolidated balance sheets. Activity associated with unpaid claims is summarized below (dollars in millions):


	2023		2022
Balance, beginning of year	$	2,480	$	2,110
Less: reinsurance recoverable	(57)		(81)
Net balance, beginning of year	2,423		2,029
Incurred:
Current year	1,561		1,778
Prior years	(111)		(125)
Total incurred	1,450		1,653
Payments:
Current year	(473)		(440)
Prior years	(804)		(800)
Total payments	(1,277)		(1,240)
Other changes:
Interest accretion	39		34
Foreign exchange adjustments	15		(53)
Total other changes	54		(19)

Net balance, end of period	2,650		2,423
Plus: reinsurance recoverable	80		57
Balance, end of period	$	2,730	$	2,480

Incurred claims associated with prior periods are primarily due to the development of claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.