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. For further information, see Note 17.

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.

Pursuant to the Spin-off Agreements, Autoliv is also required to indemnify Veoneer for recalls related to certain qualified Electronics products. At December 31, 2021, the reserves for indemnification liabilities were approximately $9 million and were included within accrued expenses on the Consolidated Balance Sheet.

Of the cash payments in 2021 the main part was related to the previously disclosed "Toyota Recall" issue. In 2020, the change in reserve mainly related to recall related issues, whereof the “Toyota Recall” represented the major recall issue. In 2019, the change in the reserve mainly related to other recall and warranty related issues. In 2020 and 2019, cash payments primarily relate to recall and warranty related issues. The reserve for product related liabilities is included in accrued expenses on the Consolidated Balance Sheet.

A majority of the Company’s recall related issues as of December 31, 2021 are covered by insurance. Insurance receivables are included within other current and non-current assets on the Consolidated Balance Sheet. As of December 31, 2021, the Company had total insurance receivables related to recall issues of $138 million ($343 million as of December 31, 2020).

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


(Dollars in millions)	2021			2020			2019
Reserve at beginning of the year	$	341		$	72		$	62
Change in reserve		49			304			39
Cash payments		(245	)		(36	)		(29	)
Translation difference		(1	)		1			(0	)
Reserve at end of the year	$	144		$	341		$	72