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, Inc. (which was acquired by SSW Partners on April 1, 2022) for recalls related to certain qualified Electronics products. At December 31, 2022, the reserves for indemnification liabilities were approximately $4 million and were included within accrued expenses on the Consolidated Balance Sheet.

In 2022, the change in the reserve for product related liabilities mainly related to warranty related issues. Of the cash payments in 2022 the main part was also related to warranty related issues. In 2021, the cash payments mainly related to recall related issues, whereof the main part was related to the “Toyota Recall” recall issue. In 2020, the change in reserve mainly related to recall related issues, whereof the "Toyota Recall" represented the major recall issue. 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, 2022 are covered by insurance. Insurance receivables are included within other current and non-current assets on the Consolidated Balance Sheet. As of December 31, 2022, the Company had total insurance receivables related to recall issues of $124 million ($138 million as of December 31, 2021).

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


(Dollars in millions)	2022			2021			2020
Reserve at beginning of the year	$	144		$	341		$	72
Change in reserve		20			49			304
Cash payments		(17	)		(245	)		(36	)
Translation difference		(2	)		(1	)		1
Reserve at end of the year	$	145		$	144		$	341