10. Liability for Unpaid Claims

The liability for unpaid claims consists primarily of long-term disability claims and are reported in future contract benefits on our Consolidated Balance Sheets. Changes in the liability for unpaid claims (in millions) were as follows:



	For the Three
	Months Ended
	March 31,
	2019			2018
Balance as of beginning-of-year	$	5,335		$	2,222
Reinsurance recoverable		143			57
Net balance as of beginning-of-year		5,192			2,165
Incurred related to:
Current year		803			364
Prior years:
Interest		41			19
All other incurred (1)		(85	)		(58	)
Total incurred		759			325
Paid related to:
Current year		(215	)		(126	)
Prior years		(482	)		(213	)
Total paid		(697	)		(339	)
Net balance as of end-of-period		5,254			2,151
Reinsurance recoverable		143			56
Balance as of end-of-period	$	5,397		$	2,207

⁽¹⁾

All other incurred is primarily impacted by the level of claim resolutions in the period compared to that which is expected by the reserve assumption. A negative number implies a favorable result where claim resolutions were more favorable than assumed. Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the long-term life of the block of claims. It will vary from actual experience in any one period, both favorably and unfavorably.

The interest rate assumption used for discounting long-term claim reserves is an important part of the reserving process due to the long benefit period for these claims. Interest accrued on prior years’ reserves has been calculated on the opening reserve balance less one-half of the prior years’ incurred claim payments at our average reserve discount rate.

Long-term disability benefits may extend for many years, and claim development schedules do not reflect these longer benefit periods. As a result, we use longer term retrospective runoff studies, experience studies and prospective studies to develop our liability estimates.