The Hartford 2012 Annual Report Download - page 58

Table of Contents
The following table displays gross asbestos and environmental reserves by category as of December 31, 2012:

  

Direct $1,722 $ 246 $ 1,968
Assumed Reinsurance
310
33
343
London Market
262
55
317
Total
2,294
334
2,628




   
[1] The one year gross paid amount for total asbestos claims is $231, resulting in a one year gross survival ratio of 9.9. The three year average gross
paid amount for total asbestos claims is $289, resulting in a three year gross survival ratio of 7.9.
[2] The one year gross paid amount for total environmental claims is $51, resulting in a one year gross survival ratio of 6.6. The three year average
gross paid amount for total environmental claims is $56, resulting in a three year gross survival ratio of 5.9.
The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that may be uncollectible in
the future due to reinsurers’ unwillingness or inability to pay. During the second quarters of 2012, 2011 and 2010, the Company completed its annual
evaluations of the collectability of the reinsurance recoverables and the adequacy of the allowance for uncollectible reinsurance associated with older, long-term
casualty liabilities reported in the Property & Casualty Other Operations. In conducting this evaluation, the Company used its most recent detailed evaluations
of ceded liabilities reported in the segment. The Company analyzed the overall credit quality of the Company’s reinsurers, recent trends in arbitration and
litigation outcomes in disputes between cedants and reinsurers, and recent developments in commutation activity between reinsurers and cedants. The
evaluation in the second quarters of 2012, 2011, and 2010 resulted in no adjustments to the allowance for uncollectible reinsurance. As of December 31, 2012,
2011, and 2010, the allowance for uncollectible reinsurance for Property & Casualty Other Operations totaled $203, $207, and $207. The Company
currently expects to perform its regular comprehensive review of Property & Casualty Other Operations reinsurance recoverables annually. Due to the inherent
uncertainties as to collection and the length of time before reinsurance recoverables become due, particularly for older, long-term casualty liabilities, it is
possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required.
Consistent with the Company’s long-standing reserving practices, the Company will continue to review and monitor its reserves in the Property & Casualty
Other Operations segment regularly and, where future developments indicate, make appropriate adjustments to the reserves. The Company will complete both
its annual ground-up asbestos and environmental reserve studies during the second quarter of 2013.
57