Anthem Blue Cross 2000 Annual Report Download - page 16

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14
Anthem Insurance Companies, Inc.
Notes to Consolidated Financial Statements (continued)
8. Unpaid Life, Accident and Health Claims
The following table provides a reconciliation of the beginning and ending balances for unpaid life, accident and health
claims:
2000 1999 1998
Balances at January 1, net of reinsurance $ 1,036.3 $ 734.6 $ 707.8
Business combinations 113.9 190.4 –
Incurred related to:
Current year 6,611.1 4,608.9 3,960.0
Prior years (60.1) (30.9) (32.8)
Total incurred 6,551.0 4,578.0 3,927.2
Paid related to:
Current year 5,381.2 3,785.1 3,245.4
Prior years 956.0 681.6 655.0
Total paid 6,337.2 4,466.7 3,900.4
Balances at December 31, net of reinsurance 1,364.0 1,036.3 734.6
Reinsurance recoverables at December 31 29.0 109.2 92.2
Reserve gross of reinsurance recoverables on
unpaid claims at December 31 $ 1,393.0 $ 1,145.5 $ 826.8
Amounts incurred related to prior years vary from previously estimated liabilities as the claims are ultimately settled.
Negative amounts reported for incurred related to prior years resulted from claims being settled for amounts less than
originally estimated.
9. Reinsurance
The Company reinsures certain of its risks with other companies and assumes risk from other companies and such
reinsurance is accounted for as a transfer of risk. The Company is contingently liable for amounts recoverable from the
reinsurer in the event that it does not meet its contractual obligations.
The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from
similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to
significant losses from reinsurer insolvencies.
The details of net premiums written and earned are as follows for the years ended December 31:
2000 1999 1998
Written Earned Written Earned Written Earned
Consolidated:
Direct $ 7,993.0 $ 7,961.5 $ 5,674.8 $ 5,693.7 $ 4,956.8 $ 4,945.6
Assumed 0.7 1.9 23.9 26.9 12.4 11.6
Ceded (229.2) (226.1) (305.6) (302.1) (218.6) (217.7)
Net Premiums $ 7,764.5 $ 7,737.3 $ 5,393.1 $ 5,418.5 $ 4,750.6 $ 4,739.5