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Reserve for Known and Incurred But Not Reported Claims | 12 Months Ended
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Dec. 31, 2021
Insurance Loss Reserves [Abstract] |
Reserve for Known and Incurred But Not Reported Claims | NOTE 12. Reserve for Known and Incurred But Not Reported Claims: Activity in the reserve for known and incurred but not reported claims is summarized as follows:
| December 31, |
| 2021 |  |  | 2020 |  |  | 2019 |
| (in millions) |
Balance at beginning of year | $ | 1,178 |  |  | $ | 1,063 |  |  | $ | 1,042 |
Provision related to: |  |  |  |  |  |  |  |  |  |  |
Current year |  | 570 |  |  |  | 532 |  |  |  | 436 |
Prior years |  | 19 |  |  |  | 48 |  |  |  | 10 |
|  | 589 |  |  |  | 580 |  |  |  | 446 |
Payments, net of recoveries, related to: |  |  |  |  |  |  |  |  |  |  |
Current year |  | 292 |  |  |  | 268 |  |  |  | 227 |
Prior years |  | 190 |  |  |  | 203 |  |  |  | 188 |
|  | 482 |  |  |  | 471 |  |  |  | 415 |
Other |  | (1 | ) |  |  | 6 |  |  |  | (10 | )
Balance at end of year | $ | 1,284 |  |  | $ | 1,178 |  |  | $ | 1,063 |
Current year payments, net of recoveries, include $264 million, $250 million and $211 million for the years ended December 31, 2021, 2020 and 2019, respectively, that relate to the Company’s specialty insurance segment. Prior year payments, net of recoveries, include $64 million, $57 million and $42 million for the years ended December 31, 2021, 2020 and 2019, respectively, that relate to the Company’s specialty insurance segment. Payments and recoveries on reinsured losses for the Company’s property and casualty insurance business were immaterial for the year December 31, 2021. Payments on reinsured losses for the Company’s property and casualty insurance business totaled $4 million, and $21 million, and recoveries totaled $3 million, and $10 million for the years ended December 31, 2020 and 2019, respectively. Payments and recoveries on reinsured losses for the Company’s title insurance business were immaterial during the years ended December 31, 2021, 2020 and 2019. The provision for title insurance losses, expressed as a percentage of title insurance premiums and escrow fees, was 4.0%, 5.0%, and 4.0% for the years ended December 31, 2021, 2020, and 2019, respectively. The current year loss rate of 4.0% reflects the ultimate loss rate for the current policy year and no change in the loss reserve estimates for prior policy years. The 2020 loss rate of 5.0% reflected an ultimate loss rate of 4.5% for policy year 2020 and a net increase in the loss reserve estimates for prior policy years of 0.5%, or $26 million. The 2019 loss rate of 4.0% reflected the ultimate loss rate for policy year 2019 and no change in the loss reserve estimates for prior policy years. A summary of the Company’s loss reserves is as follows:
(dollars in millions) |  | December 31, 2021 |  |  | December 31, 2020 |
Known title claims |  | $ | 67 |  |  |  | 5.2 | % |  | $ | 64 |  |  |  | 5.4 | %
IBNR title claims |  |  | 1,143 |  |  |  | 89.0 | % |  |  | 1,026 |  |  |  | 87.1 | %
Total title claims |  |  | 1,210 |  |  |  | 94.2 | % |  |  | 1,090 |  |  |  | 92.5 | %
Non-title claims |  |  | 74 |  |  |  | 5.8 | % |  |  | 88 |  |  |  | 7.5 | %
Total loss reserves |  | $ | 1,284 |  |  |  | 100.0 | % |  | $ | 1,178 |  |  |  | 100.0 | %
Short-Duration Insurance Contracts Specialty Insurance Segment The following reflects information as of December 31, 2021 about incurred and paid claims development, net of reinsurance, as well as cumulative claims frequency by claims event, and the total of incurred but not reported claims plus expected development on reported claims included with the net incurred claims amounts. The information below about incurred and paid claims development for the years ended December 31, 2012 to 2020, is presented as supplementary information.
|  | Incurred claims and allocated claim adjustment expenses, net of reinsurance |  | December 31, 2021 |
Accident |  | Years ended December 31, |  |  | Total of IBNR liabilities plus expected development on reported |  |  | Cumulative number of reported |
Year |  |  | 2012* |  |  | 2013* |  |  | 2014* |  |  | 2015* |  |  | 2016* |  |  | 2017* |  |  | 2018* |  |  | 2019* |  |  | 2020* |  |  | 2021 |  |  | claims |  |  | claims |
|  | (in millions) |
2012 |  | $ | 157 |  |  | 159 |  |  | 160 |  |  | 161 |  |  | 161 |  |  | 161 |  |  | 162 |  |  | 162 |  |  | 162 |  | $ | 162 |  | $ | — |  |  | 0.7 |
2013 |  |  |  |  |  | 183 |  |  | 184 |  |  | 185 |  |  | 185 |  |  | 185 |  |  | 185 |  |  | 185 |  |  | 185 |  |  | 185 |  |  | — |  |  | 0.8 |
2014 |  |  |  |  |  |  |  |  | 191 |  |  | 191 |  |  | 191 |  |  | 191 |  |  | 191 |  |  | 191 |  |  | 191 |  |  | 191 |  |  | — |  |  | 0.8 |
2015 |  |  |  |  |  |  |  |  |  |  |  | 222 |  |  | 226 |  |  | 226 |  |  | 227 |  |  | 227 |  |  | 227 |  |  | 227 |  |  | — |  |  | 0.9 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 246 |  |  | 249 |  |  | 252 |  |  | 253 |  |  | 254 |  |  | 253 |  |  | — |  |  | 1.0 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 267 |  |  | 275 |  |  | 278 |  |  | 279 |  |  | 279 |  |  | — |  |  | 1.0 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 264 |  |  | 269 |  |  | 270 |  |  | 267 |  |  | 1 |  |  | 1.1 |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 251 |  |  | 268 |  |  | 266 |  |  | 4 |  |  | 1.1 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 293 |  |  | 303 |  |  | 5 |  |  | 1.2 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 307 |  |  | 16 |  |  | 1.2 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | $ | 2,440 |  |  |  |  |  |  |
*Amounts unaudited.
|  |  | Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance |  |
Accident |  |  | Years ended December 31, |  |
Year |  |  | 2012* |  |  |  | 2013* |  |  |  | 2014* |  |  |  | 2015* |  |  |  | 2016* |  |  |  | 2017* |  |  |  | 2018* |  |  |  | 2019* |  |  |  | 2020* |  |  |  | 2021 |  |
|  | (in millions) |  |
2012 |  | $ | 131 |  |  |  | 154 |  |  |  | 157 |  |  |  | 159 |  |  |  | 160 |  |  |  | 160 |  |  |  | 161 |  |  |  | 162 |  |  |  | 162 |  |  | $ | 162 |  |
2013 |  |  |  |  |  |  | 151 |  |  |  | 180 |  |  |  | 183 |  |  |  | 184 |  |  |  | 184 |  |  |  | 185 |  |  |  | 185 |  |  |  | 185 |  |  |  | 185 |  |
2014 |  |  |  |  |  |  |  |  |  |  | 157 |  |  |  | 186 |  |  |  | 188 |  |  |  | 190 |  |  |  | 190 |  |  |  | 191 |  |  |  | 191 |  |  |  | 191 |  |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 181 |  |  |  | 218 |  |  |  | 223 |  |  |  | 225 |  |  |  | 226 |  |  |  | 226 |  |  |  | 226 |  |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 206 |  |  |  | 243 |  |  |  | 248 |  |  |  | 251 |  |  |  | 252 |  |  |  | 253 |  |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 220 |  |  |  | 267 |  |  |  | 271 |  |  |  | 272 |  |  |  | 275 |  |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 223 |  |  |  | 256 |  |  |  | 262 |  |  |  | 264 |  |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 207 |  |  |  | 252 |  |  |  | 259 |  |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 243 |  |  |  | 293 |  |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 260 |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  |  | $ | 2,368 |  |
|  |  |  |  |  |  |  |  |  |  | All outstanding liabilities before 2012, net of reinsurance |  |  |  | — |  |
|  |  |  |  |  |  |  |  |  |  | Liabilities for claims and claims adjustment expenses, net of reinsurance |  |  | $ | 72 |  |
*Amounts unaudited. A reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expense at December 31, 2021, is as follows:
|  | December 31, 2021 |
| (in millions) |
Liability for unpaid claims and claim adjustment expenses, net of reinsurance: |  |  |
Specialty insurance | $ | 72 |
Unallocated claims adjustment expenses: |  |  |
Specialty insurance |  | 2 |
Insurance lines other than short-duration: |  |  |
Title insurance |  | 1,210 |
Liability for unpaid claims and claims adjustment expenses | $ | 1,284 |
Supplementary information about average historical claims duration for the Company’s specialty insurance segment as of December 31, 2021, is as follows:
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited) |  |
Years |  |  | 1 |  |  |  | 2 |  |  |  | 3 |  |  |  | 4 |  |  |  | 5 |  |  |  | 6 |  |  |  | 7 |  |  |  | 8 |  |  |  | 9 |  |  |  | 10 |  |
Annual |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
payout |  |  | 83.0 | % |  |  | 13.6 | % |  |  | 1.6 | % |  |  | 0.8 | % |  |  | 0.5 | % |  |  | 0.1 | % |  |  | 0.1 | % |  |  | 0.1 | % |  |  | 0.0 | % |  |  | 0.0 | % |

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- References No definition available. + Details
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