Unpaid losses and loss adjustment expenses

12 Months Ended

Dec. 31, 2024

Insurance [Abstract]

Unpaid losses and loss adjustment expenses

(16)Unpaid losses and loss adjustment expenses

Reconciliations of the changes in unpaid losses and loss adjustment expenses (“claim liabilities”), excluding liabilities under retroactive reinsurance contracts (see Note 17), for each of the three years ended December 31, 2024 follow (in millions). Net liabilities of acquired businesses in 2022 related to the acquisition of Alleghany’s insurance companies in October 2022.

	2024			2023			2022
Balance at the beginning of the year:
Gross liabilities	$	111,082		$	107,472		$	86,664
Reinsurance recoverable on unpaid losses		(4,893	)		(5,025	)		(2,960	)
Net liabilities		106,189			102,447			83,704
Losses and loss adjustment expenses incurred:
Current accident year		57,563			59,244			59,463
Prior accident years		(2,322	)		(3,541	)		(2,672	)
Total		55,241			55,703			56,791
Losses and loss adjustment expenses paid:
Current accident year		(24,139	)		(25,184	)		(27,236	)
Prior accident years		(26,436	)		(27,065	)		(23,083	)
Total		(50,575	)		(52,249	)		(50,319	)
Foreign currency effect		(297	)		288			(508	)
Net liabilities of acquired businesses		—			—			12,779
Balance at December 31:
Net liabilities		110,558			106,189			102,447
Reinsurance recoverable on unpaid losses		4,593			4,893			5,025
Gross liabilities	$	115,151		$	111,082		$	107,472

Our claim liabilities under property and casualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim events that have occurred as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. Losses and loss adjustment expenses incurred shown in the preceding table related to events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident years”). Losses and loss adjustment expenses incurred and paid are net of reinsurance recoveries. Current accident year incurred losses included losses from significant catastrophe events (losses exceeding $150 million per event) of approximately $1.5 billion in 2024, $925 million in 2023 and $3.1 billion in 2022. Current accident year incurred losses for private passenger auto insurance declined in 2024 compared to 2023, reflecting lower claims frequencies and higher average claims severities. Current accident year incurred losses in 2023 also reflected a decline in private passenger auto insurance losses and the impact of the Alleghany acquisition compared to 2022.

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

We recorded net reductions of estimated ultimate liabilities for prior accident years of $2.3 billion in 2024, $3.5 billion in 2023 and $2.7 billion in 2022, which produced corresponding reductions in losses and loss adjustment expenses incurred in those periods. These reductions, as percentages of the net liabilities at the beginning of each year, were 2.2% in 2024, 3.5% in 2023 and 3.2% in 2022.

Estimated ultimate liabilities for prior accident years of our primary insurance businesses declined $602 million in 2024, $2.1 billion in 2023 and $1.1 billion in 2022. The decline in estimated liabilities in 2024 reflected lower-than-expected private passenger auto, medical professional liability and property losses, partially offset by increased casualty losses. The estimated liability reductions in 2023 and 2022 were primarily from private passenger auto, medical professional liability and property coverages. Estimated ultimate liabilities for prior accident years of our reinsurance businesses were reduced $1.7 billion in 2024, $1.4 billion in 2023 and $1.6 billion in 2022. The reductions in 2024 and 2023 were primarily attributable to lower-than-expected property losses, while the reductions in 2022 were attributable to both property and casualty losses.

Estimated net claim liabilities for environmental and asbestos exposures, excluding liabilities under retroactive reinsurance contracts, were approximately $1.9 billion at December 31, 2024 and $2.0 billion at December 31, 2023. These liabilities are subject to change due to changes in the legal and regulatory environment, among other factors. We are unable to reliably estimate additional losses or a range of losses that are reasonably possible to arise from these factors.

Disaggregated information concerning our claim liabilities is provided below and in the pages that follow for GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). In this discussion, “claim-tail” refers to the period between the claim occurrence date and claim settlement or payment date. A reconciliation of the disaggregated net unpaid losses and allocated loss adjustment expenses (the latter referred to as “ALAE”) to our consolidated claim liabilities as of December 31, 2024 follows (in millions).

	GEICO				BH Primary				BHRG
	Physical Damage		Auto Liability		Medical Professional Liability		Workers’ Compensation/ Other Casualty		Property		Casualty		Total
Unpaid losses and ALAE, net	$	885	$	20,818	$	9,432	$	24,335	$	15,851	$	33,350	$	104,671
Reinsurance recoverable		3		884		29		1,473		634		1,369		4,392
Unallocated loss adjustment    expenses														2,414
Other losses and loss adjustment    expenses														3,674
Unpaid losses and loss adjustment    expenses													$	115,151

GEICO

GEICO’s claim liabilities predominantly relate to various types of private passenger auto liability and physical damage claims. For such claims, we establish and evaluate unpaid claim liabilities using standard actuarial loss development methods and techniques. The actuarial methods utilize historical claims data, adjusted when deemed appropriate to reflect perceived changes in loss patterns. Claim liabilities include average, case, case development and IBNR estimates.

Average liabilities are based on expected severities for newly reported physical damage and liability claims prior to establishing individual case reserves when insufficient time or information is available for specific claim estimates and for large volumes of minor physical damage claims that are quickly settled. Case loss estimates for liability claims, including estimates for loss adjustment expenses, are based on the facts and merits of the claim.

Claim estimates for liability coverages normally reflect greater uncertainty than for physical damage coverages, primarily due to the longer claim-tails, the greater chance of litigation and the time needed to evaluate facts at the time the case estimate is first established. Consequently, additional case development liabilities are established, which are usually percentages of the case liabilities. For unreported claims, IBNR claim liabilities are estimated by projecting the ultimate number of claims expected (reported and unreported) for each significant coverage based on historical data, from which reported claims are deducted to produce the estimated number of unreported claims. The product of the average cost per unreported claim and the number of unreported claims produces the IBNR liability estimate. We may record supplemental IBNR liabilities in certain situations when actuarial techniques are difficult to apply.

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

GEICO’s net auto physical damage and liability losses and ALAE incurred and paid are summarized by accident year below. IBNR and case development liabilities are as of December 31, 2024 and are net of estimated salvage and subrogation recoveries. Claim counts are established when accidents that could result in a liability are reported and are based on policy coverage. Each claim event may generate claims under multiple coverages and may result in multiple counts. The “Cumulative Number of Reported Claims” includes the combined number of reported claims for all auto policy coverages. Dollars are in millions.

Physical Damage

	Losses and ALAE Incurred through December 31,								Cumulative Number of
Accident Year		2023*		2024		IBNR and Case Development Liabilities			Reported Claims (in thousands)
2023		$	12,273	$	11,900	$	111			7,430
2024					11,095		(454	)		6,380
	Losses and ALAE incurred			$	22,995
	Cumulative Losses and ALAE Paid through December 31,
Accident Year		2023*		2024
2023		$	11,567	$	11,771
2024					10,495
	Losses and ALAE paid				22,266
	Net unpaid losses and ALAE for 2023 – 2024 accident years				729
	Net unpaid losses and ALAE for accident years before 2023				156
	Net unpaid losses and ALAE			$	885

Auto Liability

	Losses and ALAE Incurred through December 31,												Cumulative Number of
Accident Year	2020*		2021*		2022*		2023*		2024		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2020	$	14,637	$	14,024	$	13,697	$	13,593	$	13,462	$	382		2,127
2021				17,481		17,457		17,229		17,033		907		2,457
2022						19,645		18,903		18,818		2,065		2,387
2023								17,948		18,073		3,864		1,956
2024										17,081		4,730		1,694
	Losses and ALAE incurred								$	84,467
	Cumulative Losses and ALAE Paid through December 31,
Accident Year	2020*		2021*		2022*		2023*		2024
2020	$	5,395	$	9,839	$	11,794	$	12,608	$	12,946
2021				6,450		12,681		14,863		15,796
2022						7,614		13,838		16,031
2023								7,191		12,682
2024										7,084
	Losses and ALAE paid									64,539
	Net unpaid losses and ALAE for 2020 – 2024 accident years									19,928
	Net unpaid losses and ALAE for accident years before 2020									890
	Net unpaid losses and ALAE								$	20,818

* Unaudited required supplemental information

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

BH Primary

BH Primary’s liabilities for unpaid losses and loss adjustment expenses primarily derive from medical professional liability and workers’ compensation and other casualty insurance, which includes commercial auto and general liability insurance. Net losses and ALAE incurred and paid are summarized by accident year in the following tables, disaggregated by medical professional liability and workers’ compensation and other casualty coverages. IBNR and case development liabilities are as of December 31, 2024. The cumulative number of reported claims reflects the number of individual claimants and includes claims that ultimately resulted in no liability or payment. Dollars are in millions.

Medical Professional Liability

Estimates of the ultimate expected losses and loss adjustment expenses incurred for medical professional claim liabilities are based on a variety of commonly accepted actuarial methodologies, such as the paid and incurred development method and Bornhuetter-Ferguson based methods, as well as other techniques that consider insured loss exposures and historical and expected loss trends, among other factors. These methodologies produce loss estimates from which we determine our best estimate. In addition, we study developments in older accident years and adjust initial loss estimates to reflect recent developments based upon claim age, coverage and litigation experience.

	Losses and ALAE Incurred through December 31,																						Cumulative Number of
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2015	$	1,374	$	1,342	$	1,269	$	1,290	$	1,218	$	1,157	$	1,093	$	1,033	$	1,016	$	1,010	$	37		12
2016				1,392		1,416		1,414		1,394		1,341		1,288		1,216		1,188		1,172		78		15
2017						1,466		1,499		1,495		1,474		1,382		1,349		1,315		1,310		89		21
2018								1,602		1,650		1,659		1,580		1,616		1,606		1,583		140		24
2019										1,670		1,691		1,663		1,614		1,534		1,579		180		22
2020												1,704		1,751		1,698		1,631		1,606		369		33
2021														1,852		1,855		1,787		1,714		718		27
2022																1,927		1,912		1,846		981		25
2023																		1,964		1,918		1,428		27
2024																				2,004		1,793		22
	Losses and ALAE incurred																		$	15,742
	Cumulative Losses and ALAE Paid through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024
2015	$	23	$	108	$	218	$	382	$	543	$	663	$	719	$	799	$	843	$	879
2016				22		115		274		461		620		712		822		908		957
2017						27		128		300		457		582		739		877		977
2018								35		166		367		543		728		949		1,080
2019										39		160		314		536		757		963
2020												34		148		321		531		767
2021														36		136		333		548
2022																38		182		441
2023																		28		156
2024																				34
	Losses and ALAE paid																			6,802
	Net unpaid losses and ALAE for 2015 – 2024 accident years																			8,940
	Net unpaid losses and ALAE for accident years before 2015																			492
	Net unpaid losses and ALAE																		$	9,432

* Unaudited required supplemental information

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

Workers’ Compensation and Other Casualty

We evaluate ultimate loss and loss adjustment expense estimates for workers’ compensation and other casualty claims using a combination of commonly accepted actuarial methodologies such as the Bornhuetter-Ferguson and chain-ladder approaches using paid and incurred loss data. Paid and incurred loss data is segregated and analyzed by state due to the different state regulatory frameworks that may impact the duration and amount of loss payments. We also separately study the various components of liabilities, such as employee lost wages, medical expenses and the costs of claims investigations and administration. We establish case liabilities for reported claims based upon the facts and circumstances of the claim. The excess of the ultimate projected losses, including the case development estimates over the case-basis liabilities, is included in IBNR liabilities.

	Losses and ALAE Incurred through December 31,																						Cumulative Number of
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024		IBNR and Case Development Liabilities		Reported Claims (in thousands)
2015	$	2,580	$	2,539	$	2,455	$	2,426	$	2,428	$	2,402	$	2,408	$	2,393	$	2,358	$	2,367	$	178		120
2016				2,931		2,848		2,793		2,772		2,815		2,825		2,864		2,840		2,809		277		125
2017						3,473		3,337		3,299		3,310		3,322		3,320		3,321		3,357		395		143
2018								3,998		3,886		3,967		4,030		4,091		4,177		4,230		570		164
2019										4,584		4,623		4,692		4,763		4,847		4,919		691		185
2020												5,030		4,881		4,775		4,774		4,866		1,167		157
2021														5,899		5,856		5,882		5,983		1,923		318
2022																6,796		6,757		6,866		2,801		316
2023																		7,299		7,363		3,887		187
2024																				7,962		5,552		169
	Losses and ALAE incurred																		$	50,722
	Cumulative Losses and ALAE Paid through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024
2015	$	329	$	804	$	1,187	$	1,507	$	1,766	$	1,873	$	1,966	$	2,041	$	2,070	$	2,095
2016				373		908		1,359		1,765		1,998		2,140		2,303		2,377		2,420
2017						480		1,133		1,645		2,050		2,279		2,492		2,673		2,784
2018								583		1,340		1,902		2,324		2,746		3,120		3,396
2019										725		1,598		2,214		2,898		3,430		3,812
2020												736		1,498		2,066		2,598		3,138
2021														869		1,751		2,440		3,168
2022																962		2,012		2,905
2023																		1,056		2,152
2024																				1,245
	Losses and ALAE paid																			27,115
	Net unpaid losses and ALAE for 2015 – 2024 accident years																			23,607
	Net unpaid losses and ALAE for accident years before 2015																			728
	Net unpaid losses and ALAE																		$	24,335

* Unaudited required supplemental information

BHRG

We use a variety of methodologies to establish BHRG’s estimates for property and casualty claim liabilities. These methodologies include paid and incurred loss development techniques, incurred and paid loss Bornhuetter-Ferguson techniques and frequency and severity techniques, as well as ground-up techniques when appropriate.

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

Our claim liabilities are principally a function of reported losses from ceding companies, case development and IBNR liability estimates. Case loss estimates are reported either individually or in bulk as provided under the terms of the contracts. We may independently evaluate case losses reported by the ceding company, and if deemed appropriate, establish additional case liabilities based on our estimates.

Estimated IBNR liabilities are affected by expected case loss emergence patterns and expected loss ratios, which are evaluated as groups of contracts with similar exposures or on a contract-by-contract basis. Estimated case and IBNR liabilities for major catastrophe events are generally based on a per-contract assessment of the ultimate cost associated with the individual loss event. Claim count data is not provided consistently by ceding companies under our contracts or is otherwise considered unreliable.

BHRG’s net losses and ALAE incurred and paid are disaggregated and summarized by accident year based on losses that are expected to have shorter claim-tails (property) and losses expected to have longer claim-tails (casualty). Under certain contracts, the coverage can apply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the ceding company may not report loss data by such lines consistently, if at all. In those instances, we allocated losses to property and casualty coverages based on internal estimates. IBNR and case development liabilities are as of December 31, 2024. Dollars are in millions.

Property

	Losses and ALAE Incurred through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024		IBNR and Case Development Liabilities
2015	$	3,587	$	3,392	$	2,827	$	3,218	$	3,214	$	3,236	$	3,238	$	3,232	$	3,255	$	3,225	$	94
2016				3,905		4,492		4,170		4,134		4,132		4,121		4,099		4,088		4,091		30
2017						6,374		6,071		5,893		5,767		5,689		5,608		5,590		5,577		51
2018								5,456		5,542		5,402		5,260		5,267		5,218		5,238		207
2019										4,951		5,064		4,838		4,537		4,488		4,447		112
2020												6,914		7,188		6,825		6,620		6,450		376
2021														8,063		7,919		7,585		7,289		450
2022																8,852		8,412		7,916		1,102
2023																		7,953		7,379		1,632
2024																				7,750		4,225
Losses and ALAE Incurred																			$	59,362
	Cumulative Losses and ALAE Paid through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024
2015	$	669	$	1,793	$	2,196	$	2,414	$	2,522	$	2,705	$	2,791	$	2,843	$	2,917	$	2,966
2016				913		2,203		2,662		3,151		3,419		3,615		3,724		3,802		3,889
2017						1,346		3,494		4,564		4,915		5,150		5,343		5,432		5,456
2018								1,204		3,073		3,709		3,992		4,236		4,444		4,571
2019										1,009		2,826		3,532		3,856		4,018		4,082
2020												1,252		3,569		4,613		5,275		5,546
2021														1,621		4,070		5,377		6,073
2022																1,813		4,322		5,588
2023																		1,771		4,107
2024																				1,720
Losses and ALAE Paid																				43,998
Net unpaid losses and ALAE for 2015 – 2024 accident years																				15,364
Net unpaid losses and ALAE for accident years before 2015																				487
Net unpaid losses and ALAE																			$	15,851

* Unaudited required supplemental information

Notes to Consolidated Financial Statements

(16)Unpaid losses and loss adjustment expenses

Casualty

	Losses and ALAE Incurred through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024		IBNR and Case Development Liabilities
2015	$	3,409	$	3,615	$	3,655	$	3,568	$	3,426	$	3,388	$	3,351	$	3,298	$	3,300	$	3,276	$	311
2016				3,777		3,987		3,891		3,859		3,808		3,765		3,735		3,763		3,793		370
2017						4,028		4,462		4,339		4,232		4,164		4,154		4,211		4,214		432
2018								4,875		5,523		5,476		5,345		5,273		5,359		5,429		647
2019										5,559		6,025		5,885		5,718		5,678		5,751		1,002
2020												6,203		6,215		6,033		6,079		6,053		1,371
2021														6,300		6,270		5,942		5,959		1,838
2022																6,047		6,092		6,045		2,829
2023																		6,053		6,144		3,528
2024																				6,093		4,660
	Losses and ALAE incurred																		$	52,757
	Cumulative Losses and ALAE Paid through December 31,
Accident Year	2015*		2016*		2017*		2018*		2019*		2020*		2021*		2022*		2023*		2024
2015	$	445	$	990	$	1,425	$	1,724	$	1,996	$	2,190	$	2,338	$	2,473	$	2,582	$	2,678
2016				653		1,355		1,795		2,143		2,414		2,607		2,782		2,957		3,095
2017						605		1,306		1,823		2,472		2,720		2,938		3,164		3,350
2018								693		1,737		2,786		3,252		3,631		3,948		4,224
2019										839		1,865		2,414		3,181		3,727		4,094
2020												866		1,900		2,709		3,373		3,967
2021														765		1,781		2,654		3,225
2022																620		1,333		1,963
2023																		689		1,575
2024																				678
	Losses and ALAE paid																			28,849
	Net unpaid losses and ALAE for 2015 – 2024 accident years																			23,908
	Net unpaid losses and ALAE for accident years before 2015																			9,442
	Net unpaid losses and ALAE																		$	33,350

* Unaudited required supplemental information

Required supplemental unaudited average historical claims duration information based on the net losses and ALAE incurred and paid accident year data in the preceding tables follows. The percentages show the average portions of net losses and ALAE paid by each succeeding year, with year 1 representing the current accident year.

Average Annual Percentage Payout of Losses Incurred by Age, Net of Reinsurance
In Year	1	2	3	4	5	6	7	8	9	10
GEICO Physical Damage	97%	3%
GEICO Auto Liability	41%	31%	13%	7%	4%
BH Primary Medical Professional Liability	2%	8%	12%	14%	13%	12%	8%	8%	4%	4%
BH Primary Workers’ Compensation and Other Casualty	14%	17%	14%	12%	10%	7%	5%	3%	1%	1%
BHRG Property	22%	35%	15%	8%	4%	4%	2%	1%	2%	2%
BHRG Casualty	13%	17%	13%	11%	8%	6%	5%	4%	4%	3%