The Hartford 2010 Annual Report Download - page 52

52
Impact of Re-estimates
The establishment of property and casualty insurance product reserves is an estimation process, using a variety of methods, assumptions
and data elements. Ultimate losses may vary significantly from the current estimates. Many factors can contribute to these variations
and the need to change the previous estimate of required reserve levels. Subsequent changes can generally be thought of as being the
result of the emergence of additional facts that were not known or anticipated at the time of the prior reserve estimate and/or changes in
interpretations of information and trends.
The table below shows the range of annual reserve re-estimates experienced by The Hartford over the past ten years. The amount of
prior accident year development (as shown in the reserve rollforward) for a given calendar year is expressed as a percent of the
beginning calendar year reserves, net of reinsurance. The percentage relationships presented are significantly influenced by the facts
and circumstances of each particular year and by the fact that only the last ten years are included in the range. Accordingly, these
percentages are not intended to be a prediction of the range of possible future variability. See “Impact of key assumptions on reserve
volatility” within this section for further discussion of the potential for variability in recorded loss reserves.
Property & Casualty
Commercial
Consumer
Markets
Corporate and
Other
Total Property and
Casualty Insurance
Range of prior accident year unfavorable
(favorable) development for the ten years
ended December 31, 2010 [1] [2[ (3.1) – 1.5 (5.2) – 5.1 2.9 – 67.5 (1.2) – 21.5
[1] Excluding the reserve strengthening for asbestos and environmental reserves, over the past ten years reserve re-estimates for total property and
casualty insurance ranged from (3.0)% to 1.6%.
[2] Development for Corporate is included in Property & Casualty Commercial and Consumer Markets in 2007 and prior.
The potential variability of the Company’ s property and casualty insurance product reserves would normally be expected to vary by
segment and the types of loss exposures insured by those segments. Illustrative factors influencing the potential reserve variability for
each of the segments are discussed above.
A table depicting the historical development of the liabilities for unpaid losses and loss adjustment expenses, net of reinsurance, follows.
Loss Development Table
Loss And Loss Adjustment Expense Liability Development – Net of Reinsurance
For the Years Ended December 31, [1]
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Liabilities for unpaid losses
and loss adjustment
expenses, net of
reinsurance $12,316 $12,860 $13,141 $16,218 $16,191 $16,863 $17,604 $18,231 $18,347 $18,210 $17,948
Cumulative paid losses
and loss expenses
One year later 3,272 3,339 3,480 4,415 3,594 3,702 3,727 3,703 3,771 3,882
Two years later 5,315 5,621 6,781 6,779 6,035 6,122 5,980 5,980 6,273
Three years later 6,972 8,324 8,591 8,686 7,825 7,755 7,544 7,752 —
Four years later 9,195 9,710 10,061 10,075 9,045 8,889 8,833 — —
Five years later 10,227 10,871 11,181 11,063 9,928 9,903 — — —
Six years later 11,140 11,832 12,015 11,821 10,798 — — — —
Seven years later 11,961 12,563 12,672 12,601 — — — — —
Eight years later 12,616 13,166 13,385 — — — — — —
Nine years later 13,167 13,829 — — — — — — —
Ten years later 13,779 — — — — — — — —
Liabilities re-estimated
One year later 12,459 13,153 15,965 16,632 16,439 17,159 17,652 18,005 18,161 18,014
Two years later 12,776 16,176 16,501 17,232 16,838 17,347 17,475 17,858 18,004
Three years later 15,760 16,768 17,338 17,739 17,240 17,318 17,441 17,700 —
Four years later 16,584 17,425 17,876 18,367 17,344 17,497 17,439 — —
Five years later 17,048 17,927 18,630 18,554 17,570 17,613 — — —
Six years later 17,512 18,686 18,838 18,836 17,777 — — — —
Seven years later 18,216 18,892 19,126 19,063 — — — — —
Eight years later 18,410 19,192 19,373 — — — — — —
Nine years later 18,649 19,452 — — — — — — —
Ten years later 18,922 — — — — — — — —
Deficiency (redundancy),
net of reinsurance $6,606 $6,592 $6,232 $2,845 $1,586 $ 750 $ (165) $(531) $(343) $(196)
[1] The above table excludes Hartford Insurance, Singapore as a result of its sale in September 2001; Hartford Seguros as a result of its sale in
February 2001; and Zwolsche as a result of its sale in December 2000.