beatandraise : Equity Research with AI and ChatGPT on SEC Edgar

1.0.0.3 false Unpaid losses and loss adjustment expenses false 1 $ false false Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 2 Unpaid losses and loss adjustment expenses [Abstract] 0 brka_UnpaidLossesAndLossAdjustmentExpensesAbstract brka false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 Unpaid losses and loss adjustment expenses 1 us-gaap_InsuranceDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <table cellpadding="0" style="BORDER-COLLAPSE: collapse" cellspacing="0" border="0" width="100%"> <tr> <td valign="top" align="left" width="4%">(14) </td> <td valign="top" align="left">Unpaid losses and loss adjustment expenses </td></tr></table> The liabilities for unpaid losses and loss adjustment expenses are based upon estimates of the ultimate claim costs associated with property and casualty claim occurrences as of the balance sheet dates including estimates for incurred but not reported (“IBNR”) claims. Considerable judgment is required to evaluate claims and establish estimated claim liabilities. A reconciliation of the changes in liabilities for unpaid losses and loss adjustment expenses of our property/casualty insurance subsidiaries is as follows (in millions).   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="76%"/> <td valign="bottom" width="3%"/> <td/> <td/> <td/> <td valign="bottom" width="3%"/> <td/> <td/> <td/> <td valign="bottom" width="3%"/> <td/> <td/> <td/></tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">2009</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">2008</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">2007</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Unpaid losses and loss adjustment expenses:</td> <td valign="bottom">  </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="top"> Gross liabilities at beginning of year</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">56,620</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">56,002</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">47,612</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Ceded losses and deferred charges at beginning of year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,133</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,126</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,833</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr> <td valign="top"> Net balance at beginning of year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,487</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">48,876</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42,779</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Incurred losses recorded during the year:</td> <td valign="bottom">  </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="top"> Current accident year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,156</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">17,399</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">22,488</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Prior accident years</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(905</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,140</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,478</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr> <td valign="top"> Total incurred losses</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18,251</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">16,259</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,010</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Payments during the year with respect to:</td> <td valign="bottom">  </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="top"> Current accident year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,207</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6,905</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6,594</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Prior accident years</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,315</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,486</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,865</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr> <td valign="top"> Total payments</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(15,522</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(15,391</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(15,459</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Unpaid losses and loss adjustment expenses:</td> <td valign="bottom">  </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="top"> Net balance at end of year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">52,216</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,744</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">48,330</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Ceded losses and deferred charges at end of year</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6,879</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,133</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,126</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr> <td valign="top"> Foreign currency translation adjustment</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">232</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(616</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">534</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"> <td valign="top"> Acquisitions</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">89</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">359</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td> </td></tr> <tr> <td valign="top"> Gross liabilities at end of year</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">59,416</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">56,620</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">56,002</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"/> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom"> </td> <td> </td></tr></table> Incurred losses “prior accident years” reflects the amount of estimation error charged or credited to earnings in each calendar year with respect to the liabilities established as of the beginning of that year. We reduced the beginning of the year net losses and loss adjustment expenses liability by $1,507 million in 2009, $1,690 million in 2008 and $1,793 million in 2007, which excludes the effects of prior years’ discount accretion and deferred charge amortization referred to below. In each year, the reductions in loss estimates for occurrences in prior years were primarily due to lower than expected severities and frequencies on reported and settled claims in primary private passenger and commercial auto lines and lower than expected reported reinsurance losses in both property and casualty lines. Accident year loss estimates are regularly adjusted to consider emerging loss development patterns of prior years’ losses, whether favorable or unfavorable. Incurred losses for prior accident years also include amortization of deferred charges related to retroactive reinsurance contracts incepting prior to the beginning of the year and the accretion of the net discounts recorded on certain workers’ compensation loss reserves. Amortization charges included in prior accident years’ losses were $504 million in 2009, $451 million in 2008 and $213 million in 2007. Net discounted workers’ compensation liabilities at December 31, 2009 and 2008 were $2,356 million and $2,403 million, respectively, reflecting net discounts of $2,473 million and $2,616 million, respectively. The accretion of discounted liabilities related to prior years’ incurred losses was approximately $98 million in 2009, $99 million in 2008 and $102 million in 2007. We are exposed to environmental, asbestos and other latent injury claims arising from insurance and reinsurance contracts. Loss reserve estimates for environmental and asbestos exposures include case basis reserves and also reflect reserves for legal and other loss adjustment expenses and IBNR reserves. IBNR reserves are determined based upon our historic general liability exposure base and policy language, previous environmental loss experience and the assessment of current trends of environmental law, environmental cleanup costs, asbestos liability law and judgmental settlements of asbestos liabilities. The liabilities for environmental, asbestos and latent injury claims and claims expenses net of reinsurance recoverables were approximately $10.6 billion at December 31, 2009 and $10.7 billion at December 31, 2008. These liabilities included approximately $9.1 billion at December 31, 2009 and $9.2 billion at December 31, 2008 of liabilities assumed under retroactive reinsurance contracts. Liabilities arising from retroactive contracts with exposure to claims of this nature are generally subject to aggregate policy limits. Thus, our exposure to environmental and latent injury claims under these contracts is, likewise, limited. We monitor evolving case law and its effect on environmental and latent injury claims. Changing government regulations, newly identified toxins, newly reported claims, new theories of liability, new contract interpretations and other factors could result in significant increases in these liabilities. Such development could be material to our results of operations. It is not possible to reliably estimate the amount of additional net loss or the range of net loss that is reasonably possible. In 2007, we entered into a reinsurance agreement with Equitas, a London based entity established to reinsure and manage the 1992 and prior years’ non-life insurance and reinsurance liabilities of the Names or Underwriters at Lloyd’s of London. Under the agreement as amended, we have agreed to provide up to $7 billion of reinsurance to Equitas in excess of its undiscounted loss and allocated loss adjustment expense reserves as of March 31, 2006. The agreement requires that we pay all claims and related costs that arise from the underlying insurance and reinsurance contracts of Equitas, subject to the aforementioned excess limit of indemnification. A significant amount of loss exposure associated with Equitas is related to asbestos, environmental and latent injury claims. (14)  Unpaid losses and loss adjustment expenses The liabilities for unpaid losses and loss adjustment expenses are based upon estimates of the ultimate false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true