A reconciliation of the changes in claim liabilities, excluding liabilities under retroactive reinsurance contracts (see Note 16), for each of the three years ending December 31, 2018 is as follows (in millions).

 

		2018				2017				2016
Balances – beginning of year:
Gross liabilities		$	61,122			$	53,379			$	50,519
Reinsurance recoverable on unpaid losses			(3,201	)			(3,338	)			(3,307	)
Net liabilities			57,921				50,041				47,212
Incurred losses and loss adjustment expenses:
Current accident year events			39,876				37,702				30,636
Prior accident years’ events			(1,406	)			(544	)			(1,443	)
Total incurred losses and loss adjustment expenses			38,470				37,158				29,193
Paid losses and loss adjustment expenses:
Current accident year events			(18,391	)			(17,425	)			(14,898	)
Prior accident years’ events			(15,452	)			(12,507	)			(10,929	)
Total payments			(33,843	)			(29,932	)			(25,827	)
Foreign currency translation adjustment			(331	)			654				(537	)
Business acquisition			3,181				—				—
Balances – end of year:
Net liabilities			65,398				57,921				50,041
Reinsurance recoverable on unpaid losses			3,060				3,201				3,338
Gross liabilities		$	68,458			$	61,122			$	53,379

 

Supplemental unaudited average historical claims duration information based on the net losses and ALAE incurred and paid accident year data in the preceding tables follows. The percentages show the average portions of net losses and ALAE paid by each succeeding year, with year 1 representing the current accident year.

 

Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
In Year		1				2				3				4				5				6				7				8				9				10
GEICO			61.7%				19.6%				8.1%				4.9%				2.8%
BHRG Property			19.0%				36.1%				18.3%				7.9%				4.3%				3.0%				1.5%				1.0%				0.2%				0.1%
BHRG Casualty			10.4%				17.8%				11.5%				8.5%				7.4%				5.1%				3.0%				1.9%				1.8%				1.4%
BH Primary Medical Professional Liability			1.6%				7.3%				11.5%				14.5%				14.1%				12.4%				8.4%				6.0%				4.1%				2.3%
BH Primary Workers’ Compensation and Other Casualty			15.8%				21.5%				16.5%				12.0%				7.6%				4.6%				2.9%				1.5%				1.0%				0.7%

GEICO’s incurred and paid losses and ALAE, net of reinsurance, are summarized by accident year below. IBNR and case development liabilities are as of December 31, 2018. Claim counts are established when accidents that may result in a liability are reported and are based on policy coverage. Each claim event may generate claims under multiple coverages, and thus may result in multiple counts. The “Cumulative Number of Reported Claims” includes the combined number of reported claims for all policy coverages and excludes projected IBNR claims. Dollars are in millions.

 

Accident    Year		Incurred Losses and ALAE through December 31,																								IBNR and Case Development Liabilities				Cumulative Number of Reported Claims (in thousands)
		2014*				2015*				2016*				2017*								2018
2014		$	14,680			$	14,572			$	14,559			$	14,589							$	14,651				$                148				7,976
2015							16,887				16,875				16,993								17,039				319				8,926
2016											19,106				19,390								19,364				823				9,633
2017															22,675								22,257				2,208				10,816
2018																							24,120				4,659				10,968
			Incurred losses and ALAE																			$	97,431
Accident    Year		Cumulative Paid Losses and ALAE through December 31,
		2014*				2015*				2016*				2017*								2018
2014		$	9,199			$	12,036			$	13,140			$	13,850							$	14,273
2015							10,606				13,858				15,285								16,186
2016											12,020				15,862								17,493
2017															13,878								18,249
2018																							14,498
			Paid losses and ALAE																				80,699
Net unpaid losses and ALAE for 2014 – 2018 accident years																							16,732
Net unpaid losses and ALAE for accident years before 2014																							586
Net unpaid losses and ALAE																						$	17,318

* Unaudited supplemental information

BHRG’s disaggregated incurred and paid losses and ALAE are summarized by accident year, net of reinsurance. IBNR and case development liabilities are as of December 31, 2018. Dollars are in millions.

BHRG Property

 

Accident   Year		Incurred Losses and ALAE through December 31,																																								IBNR and Case Development Liabilities
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	2,366			$	2,037			$	2,232			$	2,154			$	2,058			$	2,031			$	1,990			$	1,985				$1,984			$	1,984				$                7
2010							2,523				2,380				2,408				2,274				2,180				2,145				2,126				2,106				2,114				23
2011											4,300				4,084				3,810				3,720				3,719				3,689				3,666				3,652				52
2012															3,144				2,833				2,629				2,389				2,336				2,333				2,315				65
2013																			3,196				3,039				2,695				2,604				2,584				2,524				105
2014																							2,621				2,427				2,315				2,171				2,115				120
2015																											3,244				3,088				2,531				2,938				136
2016																															3,267				3,906				3,625				583
2017																																			5,248				4,958				600
2018																																							4,373				2,125
Incurred losses and ALAE																																						$	30,598
Accident   Year		Cumulative Paid Losses and ALAE through December 31,
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	402			$	1,110			$	1,613			$	1,777			$	1,846			$	1,916			$	1,950			$	1,959			$	1,961			$	1,963
2010							336				1,024				1,506				1,772				1,931				1,987				2,033				2,058				2,065
2011											701				2,282				2,931				3,200				3,310				3,398				3,440				3,485
2012															266				1,222				1,801				1,939				2,028				2,103				2,123
2013																			516				1,427				1,866				2,063				2,184				2,264
2014																							465				1,244				1,569				1,708				1,773
2015																											569				1,590				1,940				2,135
2016																															703				1,792				2,187
2017																																			1,026				2,713
2018																																							910
Paid losses and ALAE																																							21,618
Net unpaid losses and ALAE for 2009 – 2018 accident years																																							8,980
Net unpaid losses and ALAE for accident years before 2009																																							415
Net unpaid losses and ALAE																																						$	9,395

 

*	Unaudited supplemental information

BHRG Casualty

 

Accident    Year		Incurred Losses and ALAE through December 31,																																								IBNR and Case Development Liabilities
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	2,375				$2,687			$	2,546			$	2,476			$	2,414			$	2,339			$	2,292			$	2,231				$2,192				$    2,209			$	213
2010							2,301				2,387				2,322				2,258				2,139				2,090				2,044				1,883				1,963				228
2011											2,609				2,696				2,567				2,508				2,418				2,327				2,320				2,282				363
2012															2,789				2,964				2,799				2,864				2,793				2,682				2,615				514
2013																			2,130				2,259				2,290				2,134				2,082				2,028				544
2014																							1,867				2,061				2,029				1,991				1,905				611
2015																											1,875				2,072				2,099				2,000				647
2016																															1,903				2,107				2,014				818
2017																																			2,189				2,676				1,141
2018																																							2,917				1,856
Incurred losses and ALAE																																							$  22,609
Accident    Year		Cumulative Paid Losses and ALAE through December 31,
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009			$    247			$	852			$	940			$	1,211			$	1,430			$	1,586			$	1,622			$	1,658				$1,684				$    1,716
2010							118				546				838				1,026				1,278				1,374				1,437				1,482				1,531
2011											292				817				1,160				1,400				1,489				1,581				1,659				1,698
2012															309				749				1,140				1,370				1,527				1,651				1,750
2013																			291				521				807				935				1,039				1,140
2014																							150				478				644				753				875
2015																											196				491				714				834
2016																															253				556				734
2017																																			231				568
2018																																							267
Paid losses and ALAE																																							11,113
							Net unpaid losses and ALAE for 2009 – 2018 accident years																																11,496
							Net unpaid losses and ALAE for accident years before 2009																																8,470
							Net unpaid losses and ALAE																																$  19,966

 

*	Unaudited supplemental information

BH Primary Medical Professional Liability

We estimate the ultimate expected incurred losses and loss adjustment expenses for medical professional claim liabilities using commonly accepted actuarial methodologies such as the paid and incurred development method, Bornhuetter-Ferguson based methods, hindsight outstanding severity method, trended severity method and trended pure premium method. Using a combination of these methodologies produces a range of loss estimates from which we determine our best estimate. Periodically, we study developments in older accident years and adjust initial loss estimates to reflect recent development based upon claim age, coverage and litigation experience. As previously noted, MLMIC was acquired on October 1, 2018. MLMIC’s incurred and paid losses and ALAE are included for all years presented retrospectively.

 

Accident Year		Incurred Losses and ALAE through December 31,																																								IBNR and Case Development Liabilities				Cumulative Number of Reported Claims (in thousands)
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	1,423			$	1,349			$	1,294			$	1,251			$	1,153			$	1,060			$	988			$	941			$	922			$	904				$     22				13
2010							1,399				1,346				1,348				1,329				1,234				1,140				1,085				1,031				1,006				43				13
2011											1,346				1,334				1,321				1,262				1,173				1,115				1,050				1,004				71				13
2012															1,336				1,306				1,277				1,223				1,168				1,078				1,035				108				13
2013																			1,328				1,296				1,261				1,195				1,127				1,086				160				12
2014																							1,370				1,375				1,305				1,246				1,218				296				13
2015																											1,374				1,342				1,269				1,290				450				14
2016																															1,392				1,416				1,414				641				14
2017																																			1,466				1,499				1,011				18
2018																																							1,602				1,410				15
											Incurred losses and ALAE																											$	12,058
Accident Year		Cumulative Paid Losses and ALAE through December 31,
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	5			$	90			$	203			$	350			$	480			$	619			$	699			$	753			$	789			$	810
2010							15				95				224				377				526				654				745				810				853
2011											16				82				200				356				517				632				711				767
2012															15				93				218				377				522				642				725
2013																			15				90				219				368				518				635
2014																							21				106				238				396				540
2015																											23				108				218				382
2016																															22				115				274
2017																																			27				128
2018																																							35
											Paid losses and ALAE																												5,149
							Net unpaid losses and ALAE for 2009 – 2018 accident years																																6,909
							Net unpaid losses and ALAE for accident years before 2009																																379
							Net unpaid losses and ALAE																															$	7,288

 

*	Unaudited supplemental information

BH Primary Workers’ Compensation and Other Casualty

We periodically evaluate ultimate loss and loss adjustment expense estimates for the workers’ compensation and other casualty claims using a combination of commonly accepted actuarial methodologies such as the Bornhuetter-Ferguson and chain-ladder approaches using paid and incurred loss data. Paid and incurred loss data is segregated and analyzed by state due to the different state regulatory frameworks that may impact certain factors including the duration and amount of loss payments. We also separately study the various components of liabilities, such employee lost wages, medical expenses and the costs of claims investigations and administration. We establish case liabilities for reported claims based upon the facts and circumstances of the claim. The excess of the ultimate projected losses, including the expected development of case estimates, and the case-basis liabilities is included in IBNR liabilities.

 

Accident Year		Incurred Losses and ALAE through December 31,																																								IBNR and Case Development Liabilities				Cumulative Number of Reported Claims (in thousands)
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	732			$	673			$	676			$	632			$	609			$	595			$	589			$	585			$	576			$	562			$	40				46
2010							715				675				644				609				589				584				576				562				553				42				47
2011											786				706				709				657				653				647				632				622				72				51
2012															907				887				876				828				815				792				779				105				63
2013																			1,339				1,310				1,257				1,210				1,173				1,148				188				83
2014																							1,866				1,737				1,716				1,641				1,572				287				112
2015																											2,314				2,244				2,156				2,124				445				133
2016																															2,656				2,561				2,475				833				127
2017																																			3,262				3,122				1,395				143
2018																																							3,761				2,459				142
											Incurred losses and ALAE																											$	16,718
Accident Year		Cumulative Paid Losses and ALAE through December 31,
		2009*				2010*				2011*				2012*				2013*				2014*				2015*				2016*				2017*				2018
2009		$	99			$	228			$	328			$	389			$	434			$	464			$	488			$	499			$	503			$	507
2010							106				250				327				393				437				465				479				484				491
2011											114				222				344				415				470				498				512				522
2012															101				301				422				515				576				607				627
2013																			193				452				650				776				842				887
2014																							247				581				837				1,046				1,155
2015																											297				715				1,044				1,328
2016																															332				792				1,181
2017																																			467				1,078
2018																																							570
											Paid losses and ALAE																												8,346
							Net unpaid losses and ALAE for 2009 – 2018 accident years																																8,372
							Net unpaid losses and ALAE for accident years before 2009																																322
							Net unpaid losses and ALAE																															$	8,694

 

*	Unaudited supplemental information