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.

In 2023, the changes 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. In 2021, the cash payments mainly related to recall related issues, whereof the main part was related to the “Toyota 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, 2023 are covered by insurance. Insurance receivables are included within other current and non-current assets on the Consolidated Balance Sheet. As of December 31, 2023, the Company had total insurance receivables related to recall issues of $81 million ($142 million as of December 31, 2022).

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


(Dollars in millions)	2023			2022			2021
Reserve at beginning of the year	$	145		$	144		$	341
Change in reserve		25			20			49
Cash payments		(74	)		(17	)		(245	)
Translation difference		0			(2	)		(1	)
Reserve at end of the year	$	96		$	145		$	144