Liability for Policy and Contract Claims

6 Months Ended

Jun. 30, 2024

Liability for Policy and Contract Claims

(13) Liability for Policy and Contract Claims

The following table presents the balances of our liability for policy and contract claims as of the dates indicated:


(Amounts in millions)	June 30, 2024		December 31, 2023


Enact segment	$	508	$	518
Life and Annuities segment (1)		135		126
Other mortgage insurance business		6		8

Total liability for policy and contract claims	$	649	$	652

(1)	Primarily includes balances related to our universal and term universal life insurance products.

The following table sets forth changes in our liability for policy and contract claims as of and for the periods indicated:


	Six months ended June 30,
(Amounts in millions)	2024			2023
Beginning balance as of January 1	$	652		$	683
Less reinsurance recoverable		(16	)		(23	)

Net beginning balance		636			660

Incurred related to insured events of:
Current year		452			417
Prior years		(118	)		(120	)

Total incurred		334			297

Paid related to insured events of:
Current year		(252	)		(257	)
Prior years		(85	)		(90	)

Total paid		(337	)		(347	)

Foreign currency translation		—			1

Net ending balance		633			611
Add reinsurance recoverable		16			17

Ending balance as of June 30	$	649		$	628

The liability for policy and contract claims represents our current best estimate; however, there may be future adjustments to this estimate and related assumptions. Such adjustments, reflecting any variety of new and adverse trends, could be significant and result in increases in reserves by an amount that could be material to our results of operations, financial condition and liquidity. In addition, loss reserves recorded on new delinquencies in our Enact segment have a high degree of estimation due to the uncertain macroeconomic environment and the level of uncertainty regarding whether delinquencies will ultimately cure or result in a claim payment, as well as the timing and severity of those payments. Given the extended period of time that may exist between the reporting of a delinquency and the claim payment, and changes in economic conditions and the real estate market, significant uncertainty and variability exist on amounts actually paid.

During the six months ended June 30, 2024, our Enact segment recorded reserve releases of $131 million primarily related to insured events of prior years, largely driven by favorable cure performance on early 2023 and prior delinquencies. As part of these reserve releases, Enact also decreased its assumptions for the rate at which delinquencies go to claim

primarily resulting from sustained favorable cure performance and lessening uncertainty in the economic environment, impacting both current and prior year delinquencies. The favorable development related to insured events of prior years for the six months ended June 30, 2023 was largely attributable to

133

million of reserve releases in our Enact segment primarily related to favorable cure performance on delinquencies from 2021 and earlier, including those related to COVID-19. A portion of the reserve releases during the six months ended June 30, 2023 was also related to delinquencies from the first half of 2022 as uncertainty in the economic environment had not negatively impacted cure performance as expected.