Autoliv is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues including recall, product liability and warranty issues. The reserve for product related liabilities is included in accrued expenses on the Consolidated Balance Sheet. For further information, see Note 18.

The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Changes in reserve for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and the mix and volume of the products sold. The changes in reserve are recorded on an accrual basis.

In 2024, the additions to the reserve mainly related to warranty related issues. The reversal of the reserve was related to certain recall issues that were settled with a favorable outcome. Cash payments were evenly related to warranty and recall related issues. None of these matters were individually material during 2024.

In 2023, the change in reserve and cash payments mainly related to the Andrews litigation settlement with the reserve partly offset by reversal of recall related issues. In 2022, the changes in reserve and cash payments mainly related to warranty related issues. None of which were individually material.

A majority of the Company’s recall related issues as of December 31, 2024 are covered by insurance. Insurance receivables are included within other current and non-current assets on the Consolidated Balance Sheet. As of December 31, 2024, the Company had total insurance receivables related to recall issues of $54 million ($81 million as of December 31, 2023).

The table below summarizes the change in the balance sheet position of the product related liabilities (dollars in millions).


	December 31,
(Dollars in millions)	2024			2023			2022
Reserve at beginning of the year	$	96		$	145		$	144
Addition to reserve		16			28			21
Reversal of preexisting reserve		(16	)		(3	)		(1	)
Cash payments		(30	)		(74	)		(17	)
Translation difference		(2	)		0			(2	)
Reserve at end of the year	$	65		$	96		$	145