The Hartford 2008 Annual Report Download - page 187

Table of Contents
Other Operations
• During the third quarter of 2008, the Company completed its annual ground up environmental reserve evaluation. As
part of this evaluation, the Company reviewed all of its open direct domestic insurance accounts exposed to
environmental liability as well as assumed reinsurance accounts and its London Market exposures for both direct
insurance and assumed reinsurance. The Company found estimates for individual cases changed based upon the
particular circumstances of each account. These changes were case specific and not as a result of any underlying
change in the current environment. In addition, the decline in the reporting of new accounts and sites has been slower
than anticipated in our previous review. The net effect of these changes resulted in a $53 increase in net environmental
reserves.
• During the second quarter of 2008, the Company completed its annual ground up asbestos reserve evaluation. As part
of this evaluation, the Company reviewed all of its open direct domestic insurance accounts exposed to asbestos
liability as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and
assumed reinsurance. The Company found estimates for individual cases changed based upon the particular
circumstances of each account. These changes were case specific and not as a result of any underlying change in the
current environment. The net effect of these changes resulted in a $50 increase in net asbestos reserves.
• Among other net reserve re-estimates for Other Operations in 2008, the Company recognized favorable prior
year development of $30 on its HartRe assumed reinsurance liabilities as the result of lower than expected
reported losses and $25 of adverse development for assumed reinsurance obligations of the Company’s
Bermuda operations.
A rollforward of liabilities for unpaid losses and loss adjustment expenses by segment for Property & Casualty for the year
ended December 31, 2007 follows:
For the year ended December 31, 2007
Personal Small Middle Specialty Ongoing Other Total
Lines Commercial Market Commercial Operations Operations P&C
Beginning liabilities for
unpaid losses and loss
adjustment
expenses-gross $ 1,959 $ 3,421 $ 4,536 $ 6,359 $ 16,275 $ 5,716 $ 21,991
Reinsurance and other
recoverables 134 214 479 2,260 3,087 1,300 4,387
Beginning liabilities for
unpaid losses and loss
adjustment
expenses-net 1,825 3,207 4,057 4,099 13,188 4,416 17,604
Provision for unpaid losses
and loss adjustment
expenses
Current accident year
before catastrophes 2,576 1,594 1,561 961 6,692 — 6,692
Current accident year
catastrophes 125 28 15 9 177 — 177
Prior accident years (4) (209) (16) 84 (145) 193 48
Total provision for unpaid
losses and loss
adjustment expenses 2,697 1,413 1,560 1,054 6,724 193 6,917
Payments (2,503) (1,222) (1,248) (720) (5,693) (597) (6,290)
Reallocation of reserves for
unallocated loss
adjustment expenses [1] (58) (105) (86) 124 (125) 125 —
Ending liabilities for
unpaid losses and loss
adjustment
expenses-net 1,961 3,293 4,283 4,557 14,094 4,137 18,231
Reinsurance and other
recoverables 81 177 414 2,316 2,988 934 3,922
Ending liabilities for
unpaid losses and loss
adjustment
expenses-gross $ 2,042 $ 3,470 $ 4,697 $ 6,873 $ 17,082 $ 5,071 $ 22,153
Earned premiums $ 3,889 $ 2,736 $ 2,420 $ 1,446 $ 10,491 $ 5 $ 10,496
Loss and loss expense paid
ratio [2] 64.4 44.7 51.5 49.8 54.3
Loss and loss expense
incurred ratio 69.3 51.6 64.5 73.0 64.1
Prior accident year
development (pts.) [3] (0.1) (7.6) (0.7) 5.8 (1.4)
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009