Reserves for Insurance Losses and Loss Adjustment Expenses Reserves for Insurance Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2019

Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net [Abstract]

Short-duration insurance contracts, claims development

The following table shows incurred claims and allocated loss adjustment expenses, net of reinsurance.

	For the years ended December 31, ($ in millions)															December 31, 2019 ($ in millions)
Accident year (a)	2012 (b)		2013 (b)		2014 (b)		2015 (b)		2016		2017		2018	2019		Total of incurred-but-not-reported liabilities plus expected development on reported claims (c)		Cumulative number of reported claims (c)
2012	$	435	$	430	$	423	$	423	$	423	$	422	422	$	421	$	—	772,549
2013			376		365		370		370		369		368	368		—		672,278
2014					390		389		388		388		388	388		—		525,298
2015							274		271		272		272	272		—		342,267
2016									326		327		328	328		—		476,034
2017											310		314	315		—		481,646
2018													271	272		—		505,982
2019														303		23		515,689
Total														$	2,667

(a) Due to the discontinuation of various product lines and sale of certain international operations, information prior to 2012 has been excluded from the table in order to appropriately reflect the number of years for which claims are typically outstanding. In addition, given the short tail of our insurance contracts, the table above reflects the combined presentation of all business lines.

(b) Information presented for the years 2012 through 2015 is unaudited supplementary information.

(c) Claims are reported on a claimant basis. Claimant is defined as one vehicle for GAP products, one repair for VSCs and VMCs, one dealership for dealer inventory products, and per individual/coverage for run-off personal automotive products.

The following table shows cumulative paid claims and allocated loss adjustment expenses, net of reinsurance.

	For the years ended December 31, ($ in millions)
Accident year (a)	2012 (b)		2013 (b)		2014 (b)		2015 (b)		2016		2017		2018		2019
2012	$	391	$	412	$	416	$	418	$	419	$	421	$	421	$	421
2013			347		364		366		368		368		368		368
2014					369		388		388		388		388		388
2015							252		272		272		272		272
2016									302		327		328		328
2017											289		315		315
2018													245		273
2019															278
Total															$	2,643
All outstanding liabilities for loss and allocated loss adjustment expenses before 2012, net of reinsurance															8
Reserves for insurance losses and allocated loss adjustment expenses, net of reinsurance															$	32

(a) Due to the discontinuation of various product lines and sale of certain international operations, information prior to 2012 has been excluded from the table in order to appropriately reflect the number of years for which claims are typically outstanding. In addition, given the short tail of our insurance contracts, the table above reflects the combined presentation of all business lines.

(b)

Information presented for the years 2012 through 2015 is unaudited supplementary information.

Short-duration insurance contracts, schedule of historical claims duration

The following table shows the average annual percentage payout of incurred claims by age, net of reinsurance. The information presented is unaudited supplementary information.

Year	1		2		3		4		5		6		7		8
Percentage payout of incurred claims	92.6	%	6.6	%	0.4	%	0.2	%	0.1	%	0.1	%	0.1	%	—	%

Short-duration insurance contracts, reconciliation of claims development to liability

The following table shows a reconciliation of the disclosures of incurred and paid claims development to the reserves for insurance losses and loss adjustment expenses.

December 31, ($ in millions)	2019		2018		2017
Reserves for insurance losses and loss adjustment expenses, net of reinsurance	$	32	$	35	$	30
Total reinsurance recoverable on unpaid claims	88		96		108
Unallocated loss adjustment expenses	2		3		2
Total gross reserves for insurance losses and loss adjustment expenses	$	122	$	134	$	140

Short-duration insurance and deposit contracts

The following table shows a rollforward of our reserves for insurance losses and loss adjustment expenses.

($ in millions)	2019			2018			2017
Total gross reserves for insurance losses and loss adjustment expenses at January 1,	$	134		$	140		$	149
Less: Reinsurance recoverable	96			108			108
Net reserves for insurance losses and loss adjustment expenses at January 1,	38			32			41
Net insurance losses and loss adjustment expenses incurred related to:
Current year	321			291			332
Prior years (a)	—			4			—
Total net insurance losses and loss adjustment expenses incurred	321			295			332
Net insurance losses and loss adjustment expenses paid or payable related to:
Current year	(295		)	(263		)	(309		)
Prior years	(30		)	(26		)	(32		)
Total net insurance losses and loss adjustment expenses paid or payable	(325		)	(289		)	(341		)
Net reserves for insurance losses and loss adjustment expenses at December 31,	34			38			32
Plus: Reinsurance recoverable	88			96			108
Total gross reserves for insurance losses and loss adjustment expenses at December 31,	$	122		$	134		$	140

(a)

There have been no material adverse changes to the reserve for prior years.