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Unpaid Claims and Claim Expense Short Duration Contracts
 12 Months Ended
Dec. 31, 2024
Insurance [Abstract]  
Short-Duration Insurance and Deposit Contracts [Text Block] UNPAID CLAIMS AND CLAIM EXPENSE – SHORT DURATION CONTRACTS
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 2024.
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 2015.
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 AmericaAs of
(dollars in millions)December 31, 2024
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident YearFor the Years Ended December 31,
2015201620172018201920202021202220232024
2015$460 $461 $465 $462 $462 $463 $463 $464 $464 $464 $— 
2016501 500 501 497 497 498 499 500 501 — 
2017485 514 509 504 503 504 503 503 — 
2018538 538 524 517 520 519 519 — 
2019491 473 456 453 453 452 — 
2020469 426 415 415 415 1 
2021509 492 493 492 2 
2022519 480 475 5 
2023543 535 43 
2024536 233 
 Total$4,892 
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident YearFor the Years Ended December 31,
2015201620172018201920202021202220232024
2015146 361 407 422 431 437 441 446 450 452 
2016185 393 437 451 460 467 472 477 480 
2017190 403 448 462 468 474 478 482 
2018183 415 465 479 489 494 497 
2019180 372 418 428 432 435 
2020159 356 388 394 399 
2021177 414 454 469 
2022182 395 444 
2023179 437 
2024177 
Total4,272 
All outstanding claims prior to 2015, net of reinsurance108 
Liabilities for claims and claim adjustment expense, net of reinsurance$728 
(1)2015 – 2023 unaudited.
Asia PacificAs of
(dollars in millions)December 31, 2024
Incurred Claims and Allocated Claim Adjustments, Net of Reinsurance (1)
Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims
Accident YearFor the Years Ended December 31,
2015201620172018201920202021202220232024
2015244 226 220 235 234 235 235 235 235 $235 $3 
2016200 181 187 193 193 190 191 191 192 2 
2017186 188 188 191 180 178 180 180 1 
2018223 238 233 222 217 217 219 2 
2019223 230 236 228 230 229 4 
2020132 128 129 131 133 8 
202161 56 56 55 4 
202284 88 92 11 
2023119 124 28 
2024116 67 
Total$1,575 
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance (1)
Accident YearFor the Years Ended December 31,
2015201620172018201920202021202220232024
201543 104 147 178 195 205 213 218 221 $223 
201634 86 117 134 147 156 164 170 174 
201731 76 101 120 133 145 153 158 
201828 94 129 155 174 187 197 
201933 90 123 158 176 187 
202020 48 72 87 95 
20217 21 31 37 
202210 38 54 
202320 53 
202417 
Total1,195 
All outstanding claims prior to 2015, net of reinsurance91 
Liabilities for claims and claim adjustment expense, net of reinsurance$471 
(1)2015 – 2023 unaudited.
The following is unaudited supplementary information about average historical claims duration as of December 31, 2024:
Average Annual Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
U.S. and Latin America36.0 %45.1 %9.2 %2.6 %1.5 %1.1 %0.8 %1.0 %0.7 %0.6 %
Asia Pacific14.8 %26.2 %16.7 %11.6 %7.3 %5.4 %4.2 %2.6 %1.7 %1.1 %
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, 2024, is as follows (dollars in millions):
2024
Liabilities for claims and claim adjustment expense, net of reinsurance:
U.S. and Latin America$728 
Asia Pacific471 
Liabilities for claims and claim adjustment expense, net of reinsurance1,199 
Adjustments to reconcile to total policy claims:
Reinsurance recoverable8 
Effect of discounting(102)
Unallocated claims adjustment expense8 
Total adjustments(86)
Other short-duration contracts not included in the tables above:
U.S. and Latin America198 
Canada381 
Europe, Middle East and Africa880 
Asia Pacific115 
Corporate and Other6 
Total liability for unpaid claims and claim adjustment expense$2,693 
Rollforward of Claims and Claim Adjustment Expenses
The liability for unpaid claims is reported in other policy claims and benefits on the Company’s consolidated balance sheets. Activity associated with unpaid claims is summarized below (dollars in millions):
20242023
Balance, beginning of year$2,730 $2,480 
Less: reinsurance recoverable(80)(57)
Net balance, beginning of year2,650 2,423 
Incurred:
Current year1,459 1,561 
Prior years(37)(111)
Total incurred1,422 1,450 
Payments:
Current year(438)(473)
Prior years(902)(804)
Total payments(1,340)(1,277)
Other changes:
Interest accretion35 39 
Foreign exchange adjustments(127)15 
Total other changes(92)54 
Net balance, end of period2,640 2,650 
Plus: reinsurance recoverable53 80 
Balance, end of period$2,693 $2,730 
Incurred claims associated with prior periods are primarily due to the development of 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.