Allstate 2013 Annual Report Download - page 165

IBNR net reserves decreased $39 million as of December 31, 2012 compared to December 31, 2011. As of
December 31, 2012 IBNR represented 57% of total net asbestos reserves, compared to 58% as of December 31, 2011.
IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current
and new policyholders and ceding companies.
Pending, new, total closed and closed without payment claims for asbestos and environmental exposures for the
years ended December 31 are summarized in the following table.
2012 2011 2010
Number of claims
Asbestos
Pending, beginning of year 8,072 8,421 8,252
New 492 507 788
Total closed (1,117) (856) (619)
Pending, end of year 7,447 8,072 8,421
Closed without payment 728 664 336
Environmental
Pending, beginning of year 4,176 4,297 4,114
New 402 351 498
Total closed (902) (472) (315)
Pending, end of year 3,676 4,176 4,297
Closed without payment 511 334 181
Property-Liability reinsurance ceded For Allstate Protection, we utilize reinsurance to reduce exposure to
catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength
ratings of certain subsidiaries such as Castle Key Insurance Company and Allstate New Jersey Insurance Company. We
purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and
terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process, along with whether
the price can be appropriately reflected in the costs that are considered in setting future rates charged to policyholders.
We also participate in various reinsurance mechanisms, including industry pools and facilities, which are backed by the
financial resources of the property-liability insurance company market participants, and have historically purchased
reinsurance to mitigate long-tail liability lines, including environmental, asbestos and other discontinued lines
exposures. We retain primary liability as a direct insurer for all risks ceded to reinsurers.
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