INSURANCE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2021

Claims Development [Line Items]

Schedule of reconciliation of activity in the liability for unpaid claims and claims adjustment expense

The following table presents the rollforward of activity in Loss Reserves:

	Three Months Ended
	March 31,
(in millions)		2021		2020
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	77,720	$	78,328
Reinsurance recoverable		(34,431)		(31,069)
Initial allowance upon CECL adoption		-		164
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		43,289		47,423
Losses and loss adjustment expenses incurred:
Current year		3,925		4,111
Prior years, excluding discount and amortization of deferred gain		16		(1)
Prior years, discount charge (benefit)		(18)		76
Prior years, amortization of deferred gain on retroactive reinsurance(a)		(72)		(75)
Total losses and loss adjustment expenses incurred		3,851		4,111
Losses and loss adjustment expenses paid:
Current year		(328)		(342)
Prior years		(3,584)		(4,351)
Total losses and loss adjustment expenses paid		(3,912)		(4,693)
Other changes:
Foreign exchange effect		244		(230)
Allowance for credit losses		-		-
Retroactive reinsurance adjustment (net of discount)(b)		89		22
Total other changes		333		(208)
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		43,561		46,633
Reinsurance recoverable		35,271		31,114
Total	$	78,832	$	77,747

(a)Includes $17 million and $8 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended March 31, 2021 and 2020, respectively.(b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $39 million and $72 million for the three-month periods ended March 31, 2021 and 2020, respectively.

Schedule of components of the loss reserve discount

	March 31, 2021						December 31, 2020
	North						North
	America			Other			America			Other
	Commercial			Operations			Commercial			Operations
(in millions)	Insurance			Run-Off(b)		Total	Insurance			Run-Off(b)		Total
U.S. workers' compensation	$	1,668	$	-	$	1,668	$	1,636	$	-	$	1,636
Retroactive reinsurance		(872)		-		(872)		(911)		-		(911)
Total reserve discount(a)	$	796	$	-	$	796	$	725	$	-	$	725

(a)Excludes $158 million and $151 million of discount related to certain long tail liabilities in the UK at March 31, 2021 and December 31, 2020, respectively.(b)Excludes $513 million and $493 million, respectively, of discount which was 100 percent ceded to Fortitude Re at March 31, 2021 and December 31, 2020. On June 2, 2020, we completed the Majority Interest Fortitude Sale. For additional information see Note 1 to the Condensed Consolidated Financial Statements.

Schedule of loss reserve discount and loss reserve discount benefit (charge)

Three Months Ended March 31,	2021						2020
	North						North
	America		Other				America		Other
	Commercial		Operations				Commercial		Operations
(in millions)	Insurance		Run-Off			Total	Insurance		Run-Off			Total
Current accident year	$	14	$	-	$	14	$	20	$	-	$	20
Accretion and other adjustments to prior year discount		18		-		18		(67)		(9)		(76)
Effect of interest rate changes		-		-		-		-		-		-
Net reserve discount benefit (charge)		32		-		32		(47)		(9)		(56)
Change in discount on loss reserves ceded under
retroactive reinsurance		39		-		39		72		-		72
Net change in total reserve discount*	$	71	$	-	$	71	$	25	$	(9)	$	16

*Excludes $7 million and $(2) million discount related to certain long tail liabilities in the UK for the three-month periods ended March 31, 2021 and 2020, respectively.