The Hartford 2014 Annual Report Download - page 200

Table of Contents



Insurance Revenues
The effect of reinsurance on property and casualty premiums written and earned is as follows:

   
Direct $ 10,571 $ 10,564 $ 10,405
Assumed 275 247 230
Ceded (602) (882) (788)
      

Direct $ 10,531 $ 10,494 $ 10,484
Assumed 264 241 205
Ceded (699) (871) (796)
      
The reduction in ceded premium for the year ended December 31, 2014 was driven by the Company's decision to exit unprofitable programs, including
captive programs where the Company ceded direct premiums to insured captive insurance companies. Ceded losses, which reduce losses and loss adjustment
expenses incurred, were $502, $459, and $512 for the years ended December 31, 2014, 2013, and 2012, respectively.
The effect of reinsurance on life insurance earned premiums and fee income is as follows:

  
Gross earned premiums, fees and other considerations $ 6,029 $ 6,435 $ 6,905
Reinsurance assumed 193 138 137
Reinsurance ceded (1,720) (1,780) (524)
      
The Company reinsures certain of its risks to other reinsurers under yearly renewable term, coinsurance, and modified coinsurance arrangements, and
variations thereto. Yearly renewable term and coinsurance arrangements result in passing all or a portion of the risk to the reinsurer. Generally, the reinsurer
receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of
all benefit payments. Modified coinsurance is similar to coinsurance except that the cash and investments that support the liabilities for contract benefits are
not transferred to the assuming company, and settlements are made on a net basis between the companies. Coinsurance with funds withheld is a form of
coinsurance except that the investment assets that support the liabilities are withheld by the ceding company.
The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with
those used to account for the underlying policies. Insurance recoveries on ceded reinsurance agreements, which reduce death and other benefits, were $863,
$913 and $285 for the years ended December 31, 2014, 2013, and 2012, respectively.
In addition, the Company has reinsured a portion of the risk associated with variable annuities and the associated GMDB and GMWB riders.
F-64