Policy Claims and Benefits

12 Months Ended

Dec. 31, 2022

Insurance [Abstract]

Short-Duration Insurance and Deposit Contracts [Text Block]

Liabilities for Unpaid Claims and Claim Expense

The Company uses several actuarial methods to compute incurred-but-not reported liabilities. These methods use historical claim reporting patterns to develop a triangle of reported claim amounts. The claim triangle is then used to develop the ultimate claims amount and the incurred-but-not reported liabilities. Expected claim methods use exposure data such as premiums to develop the ultimate claim amount. The final method blends the estimates from the development and the expected claim methods. There were no significant changes in methodologies during 2022.

The following tables provide information on incurred and paid claims development, net of retrocession, for short-duration reinsurance contracts for the Company’s U.S. and Latin America and Asia Pacific Traditional segments, which primarily relate to group life and health (including disability) business. The short-duration business for the Company’s other segments is immaterial. Liabilities for claims and claims adjustment expenses, net of reinsurance equals total incurred claims less cumulative paid claims plus outstanding liabilities prior to 2013.

The Company provides reinsurance on large quota share transactions. It is common industry practice for cedants to provide loss information on a bulk basis without comprehensive claim details. Additionally, a claim under aggregate stop loss coverage may be the result of thousands of claims, but the Company only pays the excess amount. Therefore, it is impractical to provide meaningful claim count detail by accident year in the tables shown below.

U.S. and Latin America																					As of
(dollars in millions)																					December 31, 2022
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)																					Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	For the Years Ended December 31,
	2013		2014		2015		2016		2017		2018		2019		2020		2021		2022
2013	$	349	$	333	$	339	$	337	$	336	$	336	$	337	$	335	$	336	$	336	—
2014			408		411		396		397		396		399		399		401		401		—
2015					460		461		465		462		462		463		463		464		—
2016							501		500		501		497		497		498		499		—
2017									485		514		509		504		503		504		—
2018											538		538		524		517		520		1
2019													491		473		456		453		2
2020															469		426		415		5
2021																	509		492		27
2022																			519		227
																	Total		$	4,603

Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident Year	For the Years Ended December 31,
	2013		2014		2015		2016		2017		2018		2019		2020		2021		2022
2013	$	114	$	249	$	277	$	286	$	292	$	297	$	302	$	305	$	309	$	311
2014			129		305		337		349		356		364		368		374		378
2015					146		361		407		422		431		437		441		446
2016							185		393		437		451		460		467		472
2017									190		403		448		462		468		474
2018											183		415		465		479		489
2019													180		372		418		428
2020															159		356		388
2021																	177		414
2022																			182
													Total						3,982
					All outstanding claims prior to 2013, net of reinsurance														108
			Liabilities for claims and claim adjustment expense, net of reinsurance																$	729

(1)2013 – 2021 unaudited.

Asia Pacific																					As of
(dollars in millions)																					December 31, 2022
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)																					Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident Year	For the Years Ended December 31,
	2013		2014		2015		2016		2017		2018		2019		2020		2021		2022
2013	$	282	$	302	$	293	$	291	$	303	$	317	$	319	$	318	$	319	$	323	4
2014			267		290		257		262		275		277		277		276		275		4
2015					269		249		242		258		258		259		258		258		6
2016							220		199		206		213		212		209		210		5
2017									205		208		207		210		198		196		3
2018											245		262		256		245		239		9
2019													245		253		260		251		19
2020															145		141		142		23
2021																	67		61		12
2022																			93		57
																	Total		$	2,048

Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident Year	For the Years Ended December 31,
	2013		2014		2015		2016		2017		2018		2019		2020		2021		2022
2013	$	48	$	139	$	202	$	228	$	253	$	273	$	285	$	294	$	300	$	306
2014			33		131		171		199		221		234		244		251		255
2015					47		115		162		196		214		226		235		240
2016							37		94		129		148		161		172		180
2017									34		84		111		132		147		160
2018											31		103		142		171		191
2019													37		99		136		174
2020															22		53		80
2021																	8		23
2022																			11
															Total				1,620
					All outstanding claims prior to 2013, net of reinsurance														79
					Liabilities for claims and claim adjustment expense, net of reinsurance														$	507

(1)2013 – 2021 unaudited.

The following is unaudited supplementary information about average historical claims duration as of December 31, 2022:

Average Annual Payout of Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9		10
U.S. and Latin America	35.7	%	44.1	%	9.0	%	2.7	%	1.7	%	1.4	%	1.1	%	1.3	%	1.1	%	0.8	%
Asia Pacific	14.8	%	27.1	%	16.6	%	11.1	%	7.6	%	5.4	%	3.7	%	2.5	%	2.0	%	1.7	%

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claims Adjustment Expenses

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expense in the consolidated balance sheet as of December 31, 2022 is as follows (dollars in millions):

	2022
Liabilities for claims and claim adjustment expense, net of reinsurance:
U.S. and Latin America	$	729
Asia Pacific	507
Liabilities for claims and claim adjustment expense, net of reinsurance	1,236
Adjustments to reconcile to total policy claims and future policy benefits:
Reinsurance recoverable	10
Effect of discounting	(97)
Unallocated claims adjustment expense	7
Total adjustments	(80)
Other short-duration contracts:
Canada	309
Europe, Middle East and Africa	768
Other	259
Liability for unpaid claims and claim adjustment expense – short-duration	2,492
Liability for unpaid claims and claim adjustment expense – long-duration	5,152
Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and other policy-related balances)	$	7,644

Rollforward of Claims and Claim Adjustment Expenses

The liability for unpaid claims is reported in future policy benefits and other policy-related balances within the Company’s consolidated balance sheets. Activity associated with unpaid claims is summarized below (dollars in millions):

	2022		2021		2020
Balance, beginning of period	$	8,053	$	7,556	$	6,786
Less: reinsurance recoverable	(556)		(641)		(564)
Net balance, beginning of period	7,497		6,915		6,222
Incurred:
Current year	11,018		13,181		11,195
Prior years	(143)		(377)		123
Total incurred	10,875		12,804		11,318
Payments:
Current year	(4,282)		(6,284)		(5,617)
Prior years	(6,634)		(5,810)		(5,204)
Total payments	(10,916)		(12,094)		(10,821)
Other changes:
Interest accretion	34		31		36
Foreign exchange adjustments	(285)		(159)		160
Total other changes	(251)		(128)		196
Net balance, end of period	7,205		7,497		6,915
Plus: reinsurance recoverable	439		556		641
Balance, end of period	$	7,644	$	8,053	$	7,556

Incurred claims associated with prior periods are primarily due to events, related to long-duration business, which were incurred in prior periods but were reported in the current period, and to a lesser extent, the development of short-duration business claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.