AmazonScience/document-haystack

1The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss 2cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather 3than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2023:4December 31, 2023 Increase5(Decrease) to6Loss Reserves7Increase8(Decrease) to9Loss Reserves(in millions)10Loss cost trends: Loss development factors:11U.S. Excess Casualty: U.S. Excess Casualty:125.0 percentage points increase $  850 3.5 percentage points tail factor increase $  1,200 135.0 percentage points decrease  (650) 2.0 percentage points tail factor decrease  (750) 14U.S. Excess Casualty:156-months slower  600 166-months faster  (550) 17U.S. Financial Lines (D&O) U.S. Financial Lines (D&O)1810.0 percentage points increase  950 6-months slower  600 1910.0 percentage points decrease  (700) 6-months faster  (550) 20U.S. Workers' Compensation:21Tail factor increase(a)  800 22Tail factor decrease(b)  (550) 23(a) Tail factor increase of 2.5 percentage points for guaranteed cost business and 3 percentage points for deductible business.24(b) Tail factor decrease of 1 percentage point for guaranteed cost business and 1.5 percentage points for deductible business.25For additional information on our reserving process and methodology, see Note 13 to the Consolidated Financial Statements.26FUTURE POLICY BENEFITS FOR LIFE AND ACCIDENT AND HEALTH INSURANCE CONTRACTS27Long-duration traditional products primarily include whole life insurance, term life insurance, and certain payout annuities for which 28the payment period is life-contingent, which include certain of our single premium immediate annuities including pension risk transfer 29(PRT) and structured settlements. In addition, these products also include accident and health, and long-term care (LTC) insurance. 30The LTC block is in run-off and has been fully reinsured with Fortitude Re.31Updating net premiums ratios (NPRs) – Remeasurement gains and losses: Generally, future policy benefits are payable over an 32extended period of time and related liabilities are calculated as the present value of future benefits less the present value of future net 33premiums (portion of the gross premium required to provide for all benefits and expenses). The assumptions used to calculate the 34benefit liabilities are initially set when a policy is issued and an NPR is established. Benefit liabilities are subsequently remeasured 35periodically to reflect changes in policy assumptions and actual versus expected experience and are recognized as remeasurement 36gains and losses, a component of policyholder benefits. The assumptions include mortality, morbidity and persistency. These 37assumptions are typically consistent with pricing inputs at policy issuance. Liabilities are accreted using an upper-medium grade (low 38credit risk) fixed income instrument yield that is locked-in at policy issuance. The liabilities are remeasured at the balance sheet date 39using a current upper-medium grade yield with changes in the liabilities reported in Other comprehensive income (loss) (OCI). 40For universal life policies with secondary guarantees: We recognize certain liabilities in addition to policyholder account balances. 41For universal life policies with secondary guarantees, as well as other universal life policies for which profits followed by losses are 42expected at contract inception, a liability is recognized based on a benefit ratio of (a) the present value of total expected payments, in 43excess of the account value, over the life of the contract, divided by (b) the present value of total expected assessments over the life 44of the contract. Universal life account balances are reported in Policyholder contract deposits, while these additional liabilities related 45to universal life products are reported within Future policy benefits in the Consolidated Balance Sheets. These additional liabilities are 46also adjusted to reflect the effect of unrealized gains or losses on fixed maturity securities available for sale on accumulated 47assessments, with related changes recognized through Other comprehensive income (loss). The policyholder behavior assumptions 48for these liabilities include mortality, lapses and premium persistency. The capital market assumptions used for the liability for 49universal life secondary guarantees include discount rates and net earned rates.50ITEM 7 | Critical Accounting Estimates51AIG | 2023 Form 10-K 5352The secret animal #5 is a "pig".